Global Franchise Issue 10.1

GF: You’ve been on the ground over the last couple of weeks, speaking to representatives from across the franchising world.What’s the mood like right now (April 2025)? MH: I think franchising is still an exciting opportunity. Brands are still seeing a lot of lead flow coming in, despite the noise coming out of the U.S. around tariffs, trade, and broader economic volatility. I think there was a bit of a post-election high that’s now come back down to earth, and the uncertainty created by the tariff situation has given some potential franchisees, who were already looking for a reason to wait, yet another excuse to hold off on growth and expansion. Some of this uncertainty just needs to work its way through the system before people make decisions. But I’m still hearing from brands that lead flow remains very strong. In periods of economic turbulence, franchising tends to be something more people consider – you have more control over your future than in a corporate job, or with money tied up in the stock market. So those are some of the things I’m hearing from our members and on my travels. But it’s a fluid situation and we’re watching it every day. Q: As global markets grapple with economic uncertainty, what impact do you expect this to have on franchisors in the coming 12 months? A: Good franchisors are going to batten down the hatches and focus on their existing operations, because the best way to sell a new franchise is to ensure your current franchisees are successful. If your franchisees are demonstrating strong unit-level economics, they’ll be your best ambassadors for future growth. This year, we’ll see franchises double down on data, and some may look to address cost pressures from tariffs, whether directly or through the ripple effect on consumers. If you can demonstrate six to nine months from now that you’ve maintained profitability at the unit level, that becomes your best sales tool. Smart franchisors are focused on that. If you’re exposed to this issue – and right now, it’s largely a China conversation, but that could change quickly – you need to be thinking:What are the alternatives?Where else can you source materials, equipment, or products that your system relies on? Q: What can we be doing collectively, as an industry, to help mitigate these challenges? A: In times of uncertainty, people really value community. And franchising has built-in advantages in that area.We have “Smart franchisors are focused on the field” As franchise leaders navigate economic headwinds and uncertainty in 2025, IFA President Matthew Haller urges them to stay close to operations, keep in touch with franchisees, and build resilience through data and relationships Interview by CHARLOTTE SMITH Q & A 48 GLOBAL FRANCHISE Issue 10.1