🚀 Next-Gen Franchise Revolution

How young leaders reshape franchising culture.

Author

Chris Wright
June 05, 2025

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🎯 Gen Z Transforms Franchise Leadership Culture

The franchise industry is experiencing a generational shift as Gen Z brings fresh perspectives and community-focused approaches to business ownership.

Key Highlights:

  • Palm Beach Atlantic University's Titus Center for Franchising has graduated over 120 Gen Z students with franchise concentrations since 2017

  • Ten graduates are already franchisees in service businesses, with others launching supplier companies or joining franchisor teams

  • Maxwell Fulton acquired seven Jimmy John's stores in his early 20s and has since expanded to 15 units across Maryland and Pennsylvania

  • Gen Z franchisees prioritize giving back to communities, offering competitive benefits, and maintaining work-life balance for employees

  • Brands like Mr. Rooter are hosting "next-gen" meetings where younger franchisees share ideas and receive guidance

👉️ Why It Matters:

Gen Z's entrance into franchising signals a fundamental shift toward authenticity, community engagement, and employee-centric operations. As Professor John Hayes notes, "They are not going to go to work for you if they don't believe you're doing something good for society." Franchisors who adapt to these values will tap into what will soon be the largest generation of business leaders.

📊 What 27% Confidence Drop Means for Franchisees

Consumer sentiment has dropped to its fifth-lowest point in five years, creating headwinds for franchise operators across all sectors. The WalletHub Economic Index reveals a sharp decline in consumer optimism, driven by economic uncertainty, trade concerns, and job security fears. This is the steepest yearly drop since December 2020.

Key Highlights:

  • Consumers are 32% less likely to buy a car in the next six months compared to May 2024

  • Home-buying interest decreased nearly 30% year-over-year, the largest drop since December 2020

  • Consumer willingness to make major purchases fell 22% compared to last year

  • Confidence in job stability dropped 16% year-over-year, affecting discretionary spending

  • Consumer optimism about financial improvement declined 14% compared to 2024

👉️ Why It Matters:

Reduced consumer confidence directly impacts franchise performance across sectors. Restaurant franchisees may see decreased dining frequency, while retail and service franchises could experience longer sales cycles. Franchisees should prepare by focusing on value propositions, strengthening local marketing efforts, and maintaining operational efficiency during this challenging period.

🤖 Donatos Opens Fully Autonomous Pizza Restaurant

Donatos Pizza launched its first fully autonomous restaurant at Columbus Airport, partnering with robotics company Appetronix to create a 24/7 robot-operated dining experience. The location operates without human staff, using AI-powered robotics to prepare made-to-order pizzas for travelers. Customers can watch their pizzas being freshly prepared in real-time through the engaging visual experience the technology provides.

Key Highlights:

  • Located before security at Concourse B of John Glenn Columbus International Airport, operated by HMS Host

  • Uses state-of-the-art robotics and data science technologies for efficient ordering and pizza preparation

  • Operates 24/7 to serve travelers with fast, consistent service during busy travel periods

  • Technology designed for scalability to airports, hospitals, college campuses, and industrial environments

  • Maintains Donatos' signature Edge to Edge® toppings and premium quality through automated precision

👉️ Why It Matters:

This fully autonomous restaurant represents a significant leap in franchise technology adoption, addressing labor challenges while maintaining food quality and consistency. The airport location serves as a testing ground for future expansion into environments where traditional kitchens aren't feasible, potentially revolutionizing how franchises operate in high-traffic, space-constrained locations.

🍔 Why Chili's Beat Applebee's: The Franchise

For the first time, Chili's has overtaken Applebee's in U.S. systemwide sales, highlighting the operational advantages of company-owned versus franchised restaurant models. Chili's grew from $3.6 billion to $4.6 billion in sales between 2021-2024, while Applebee's remained flat at $4.1 billion. The performance gap illustrates how ownership structure affects turnaround speed and execution.

Key Highlights:

  • Chili's reported 31% same-store sales growth while Applebee's declined 2.2% in recent quarters

  • Chili's increased labor spending by 34% and restaurant expenses by 28% in 2024 for system-wide improvements

  • Chili's executed a swift system-wide turnaround thanks to its majority company-owned structure

  • Dine Brands must incentivize rather than mandate changes, slowing renovation and improvement timelines

  • Applebee's plans to remodel all locations over three years, offering financial incentives to early adopter franchisees

👉️ Why It Matters:

You'll see the ups and downs of the franchise model in this case study. While franchising offers capital efficiency and reduced risk for franchisors, it can limit speed of execution during turnarounds. Franchisees should recognize the importance of staying aligned with brand initiatives and investing in necessary improvements to remain competitive.

✂️ Snippets

🏠 Homebuyers Keep Buying Despite High Rates

Mortgage applications to buy homes increased 2% from last week and are 18% higher year-over-year, even as 30-year rates hit 6.98%. New homeowners typically need immediate assistance with cleaning, painting, plumbing, and repairs, creating strong demand for home service franchises. (Source: 1851 Franchise)

🧠 Ellie Mental Health Sells All Corporate Clinics

The mental health franchise finalized a deal to sell its 25 Minnesota corporate clinics to Nystrom & Associates amid ongoing franchisee disputes. Multiple franchisees have left the system and rebranded their clinics, leading to lawsuits over breach of franchise agreements and unfair competition. (Source: FranchiseTimes)

🌮 Chronic Tacos Founders Share 23-Year Growth Strategy

Randy Wyner and franchisee Caleb Walker discuss their relationship-driven approach to building 33+ locations while maintaining authentic partnerships over rapid expansion. The brand's "aha moment" came when newspaper coverage created lines around the corner. (Source: Networld Media Group)

📋 SBA Reinstates Franchise Directory Requirement

Franchisors must be listed in the SBA Franchise Directory by July 31, 2025, or their franchisees will lose access to SBA-backed loans. The agency reversed its 2023 policy shift and now requires stricter documentation, with lenders taking more responsibility for verifying franchise eligibility. (Source: Entrepreneur)