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Analytics
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2023 Franchise Sales Index: Navigating Growth and Challenges in a Dynamic Market

The franchise industry has shown remarkable resilience and adaptability in the face of recent economic challenges. The 2023 Franchise Sales Index, compiled by FranConnect, offers an in-depth analysis of the industry’s performance based on anonymized data from participating FranConnect customers. This comprehensive report provides invaluable benchmarks and year-over-year comparisons across various verticals, making it the most extensive and authoritative data source on franchise sales.

Market Overview

Despite the lingering effects of the pandemic, the franchise industry has continued to grow. According to the International Franchise Association (IFA), the franchise industry reached $826.6 billion in economic output by the end of 2023, a 4.2% increase from 2022. The industry was also projected to add over 257,000 new jobs, bringing the total franchise employment to 8.5 million.

Key Findings

1. Leads Volume: Most franchise sectors experienced a significant increase in leads compared to the previous period. Commercial & Residential Services saw the highest growth at 60.77%, likely due to the increased demand for home-based services and the rise of remote work. The Automotive sector, however, saw a modest decline of 3.90%, possibly due to the ongoing chip shortage and supply chain disruptions affecting the industry.

2. Deals Volume: The Personal Services sector had the highest growth in closed deals at 54.09%, reflecting the strong consumer demand for health, wellness, and beauty services post-pandemic. Automotive and Retail Products and services experienced significant declines of 55.34% and 41.95%, respectively, possibly due to the challenges mentioned above and the shift in consumer spending habits.

3. Speed to Lead: Brands that contacted leads within 4 hours of inquiry had a higher close rate (74%) compared to the average (58%). This finding underscores the importance of prompt follow-up and efficient lead management in converting prospects into franchisees.

4. Lead Sources: Existing franchise leads, although lower in volume, had the highest conversion rate at 40.9%, indicating that current franchisees are the most valuable source of high-quality, convertible leads. Franchisors should focus on nurturing relationships with existing franchisees and leveraging their networks for referrals.

5. Units: Locations transferred increased by 92.7% to 2,058, while locations terminated rose by 8.3% to 6,823. This trend suggests a dynamic market with franchisees exiting underperforming units and new owners stepping in to revitalize them.

Vertical-Specific Insights

1. Quick Service Restaurants (QSR): The QSR sector continued to dominate unit openings (25.56%) and transfers (45.68%), reflecting the strong demand for convenient and affordable dining options. However, the sector also accounted for a significant portion of terminations (27.85%), possibly due to increased competition and the challenges of operating in a high-turnover industry.

2. Commercial & Residential Services: This sector saw the highest growth in leads (60.77%) and accounted for the largest share of unit openings (29.47%) and terminations (30.40%). The growth in leads and openings can be attributed to the increased demand for home-based services, while the high termination rate may reflect the challenges of managing a geographically dispersed workforce.

3. Personal Services: The Personal Services sector experienced the highest growth in closed deals (54.09%) and accounted for a significant portion of unit openings (22.35%) and transfers (23.32%). This trend reflects the strong consumer demand for health, wellness, and beauty services post-pandemic and the relatively lower capital requirements for starting a personal services franchise.

Conclusion

The 2023 Franchise Sales Index provides valuable insights into the state of the franchise industry and the factors driving its growth and challenges. By leveraging these insights, franchisors can optimize their sales strategies, improve lead conversion rates, and make data-driven decisions to thrive in an ever-evolving market. As the industry continues to adapt to new consumer preferences and economic realities, franchisors that prioritize innovation, efficiency, and customer-centricity will be best positioned for long-term success. 

For more information, including the full webinar recording of the report, visit our 2023 Sales Index Report here.  

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How Businesses Can Benefit From Using Business Analytics

Understanding your company’s performance is vital for business owners since it helps them make critical decisions for the future. That’s where business analytics comes in. Business analytics provide detailed insights that make it easier to measure your company’s performance, establish actionable steps to achieve your business goals and solve reoccurring problems within your business. This post will explain how data analytics helps your business expand and thrive in a competitive market.

What Is Business Analytics?

Business analytics is a method of interpreting data to find valuable performance patterns and insights. Examples of business analytics tools and techniques include machine learning, predictive analytics, and natural language processing. These tools transform data analytics into usable insights to determine your website’s performance. You can use these insights to make decisions and improve your marketing strategies to reach more people.

Analytic tools need clear and accessible data to provide real-time, accurate business analytics. Several tools and cloud storage software platforms exist to access and process your vital data to provide valuable business insights.

How Can Businesses Benefit From Using Analytics?

Identifying patterns and trends in your business data helps you find ways to change your business practices for a more favorable outcome. Here are a few specific benefits of business analytics:

Improve Customer Insights

Your goal as a business is to improve your customers’ experience when they use your products or services. However, it may be challenging to enhance their experience if you know how they feel. Business analytics tools analyze data to create detailed customer profiles, allowing you to understand individuals’ behavior to provide tailored services to meet their unique needs and preferences.

Track KPIs

Key performance indicators (KPIs) are quantifiable measurements that evaluate your company’s long-term performance and can determine your strategic, financial, and operational achievements compared to other companies in the same industry. Business analytics track your company’s performance metrics by collecting data and converting it into measurable insights you can display on charts and dashboards.

Simplify Decision-Making

As a business owner, you have many decisions to make every day. Business analytics can provide insights that guide you in making informed decisions. Business analytic tools use predictive analytics to suggest the best responses to changes in your business. These tools can use sales data to determine the chance of success, helping you decide on your company’s right course of action.

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Mitigate Business Risks

You are likely no stranger to business risks. Legal liabilities, employee safety, and delayed deliveries are just some risks your business may experience. Business analytics models can evaluate business data, such as your location, product demands, and current inventory, to predict potential risks and allow you to prevent them. Business analytics can also help you recover from setbacks by recommending a suitable solution.

Enhance Data Security

In addition to mitigating risks, business analytics tools can also identify security vulnerabilities and help you protect your data. Some data analytics models can use information from previous data breaches to strengthen security and prevent recurrence. Investing in business analytics solutions will help you protect your company’s sensitive information and maintain compliance with privacy regulations.

How Can FranConnect Benefit Your Business?

At FranConnect, we offer analytics solutions for franchises and multi-location businesses. FranConnect’s Analytics includes a catalog of pre-built analytics to provide your company’s development, operations, and finance teams with valuable insights that streamline decision-making. We use scorecards, benchmarks, and dashboards to represent your company’s performance, allowing you to increase profitability and strengthen your brand.

FranConnect’s Analytics catalog has a user-friendly design to ensure you get the most out of our tool. We have optimized the catalog’s dashboard and scorecard to be mobile-friendly so you can access your data no matter where you are. Experience all the benefits of business analytics with our comprehensive and innovative solutions.

Contact FranConnect for Analytics Software You Can Trust

Would you like to know more about FranConnect’s Analytics and other catalog solutions coming soon? Our experts are happy to assist you with a tailored solution to expand your units. Feel free to request a demo or contact us directly to speak to a member of our sales team.

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10 Ways to Leverage Unit-Level Performance Data for Franchise Growth

With constant change the only certainty, harnessing the power of data for growth amid shrinking resources and shifting consumer behavior is critical for franchise brands of all sizes. Advanced point-of-sale and customer relationship systems offer franchisors the digital footprints to engage, garner feedback, track trends, try new products, and create unmatched customer experiences. Analytic data, swiftly served up, can also be a powerful ally to predict the success of local marketing and franchise development tactics and drive growth-focused operations and franchise relations decisions.

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The 15 Most Important Restaurant Franchise KPIs

The majority of restaurants are franchised. According to the U.S. Economic Census, an estimated 122,042 limited-service franchise restaurants make up approximately 54% of all fast-food restaurants in the United States.

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Unit Level Economics for Franchise Businesses

We have all heard that Unit Level Economics is important in franchising but going from understanding it in theory to transforming it into action is a big step.  According to QSR Magazine, “the success or failure of a franchise concept can pivot off of how well unit economics are tracked, managed, and improved.” After working with over 900 brands a common practice among them is working together with their franchisees to improve their unit-level economics: not only their top-level sales but also their bottom line. If you’re not doing this today, you will have trouble selling franchises in the future.

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Introducing FranConnect Franchise Scorecards – a snapshot of your franchise’s health!

We recently launched Franchise Scorecards and are excited to share the news! The franchise scorecards, part of FranConnect’s Operations platform, equip brands with a complete view of the health of a unit at your fingertips helping franchisees drive unit-level economics. Anyone involved with franchise field visits likely agrees that the prep work for a visit can be daunting. It seems to take hours, pulling information from different systems to end up with questionable economic insights. Additionally, comparing one unit against the average of their peers is nearly impossible without having key performance metrics identified.

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Leadership Spotlight: Meet Gabby Wong, CEO of FranConnect, during this month’s Take the Lead Tuesdays - November 18, 2025 at 12:00 PM ET
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