- The Franzy Five
- Posts
- π° Potential Impact of Tariffs on Franchises
π° Potential Impact of Tariffs on Franchises
How will tariffs reshape the franchising landscape?
Welcome to Franzy Five, the 5-minute weekly summary of franchise news π.
At Franzy, we match aspiring owners with their ideal franchises through personalized recommendations and transparent metrics. Think match-making, but for your business future. Our platform shows you opportunities you'll actually care about, complete with the numbers that matter.
We officially launched Franzy on 1/29. Check out our CEO Alex discussing Franzy live from the floor of the NYSE.
π§ Watch here β
This Week's Franzy Five:
π How Tariffs Will Hit Franchises
While tariffs against Mexico and Canada have been deferred, a new 10% tariff will affect Chinese imports starting this week. This hike and any future increases in tariffs will affect a wide range of goods and potentially pressure franchiseeβs bottomline
Key Highlights:
Many businesses including franchises source supplies, from agricultural goods to electronics, from China, Mexico, and Canada
Franchise systems will need to be nimble and adjust their model to maintain franchisee relations, customer service quality, and profit margins
Trade policy uncertainty will complicate long term planning, potentially affecting expansion, investment, and hiring.
ποΈ Why It Matters:
As new tariffs on imports are implemented, cost pressures may affect business profits. Both franchisors and franchisees need to stay abreast of trade policy changes and work hard to mitigate the impact to their business model.
π― Ready to Franchise?
Most business owners dream of expansion but fear losing control. Franchising offers a proven path to scale without losing your brand's soul.
Key Highlights:
One profitable location and teachable systems are all you need to start franchising.
With 10 franchises at 5% royalty, you could generate $500,000 in annual royalties.
You'll need about $100,000 to launch your franchise. That would pay for legal and marketing the first year.
ποΈ Why It Matters:
While franchising isn't the only path to growth, it offers unique advantages over traditional expansion. The franchise model lets you scale your brand without managing every location's daily operations. With U.S. franchises expected to add 15,000 new units in 2025, the opportunity is real. But success requires careful planning, strong systems, and the right mindset about control versus growth.
πΊ Small-Town Entrepreneur Builds Franchise Empire
Meet the franchise owner who's proving small towns are where the big opportunities hide.
Key Highlights:
Dee Wells started as a 15-year-old carhop, converted a gas station into a hybrid A&W restaurant for her first location, and now owns six A&W locations across small-town America.
Her growth hack? Converting failed restaurants instead of building new onesβher latest was an old Hardee's.
She faced fierce local resistance but won towns over with a community focus and root beer float diplomacy.
Now, she's building a family franchise legacy: her daughter owns three Culver's, and Dee is targeting 10 A&Ws before semi-retirement.
ποΈ Why It Matters:
Contrary to the common franchisee focus on large cities, Wells' success proves smaller towns can be viable locations for major brands. As chains struggle to find growth in saturated urban markets, Wells' success shows there's gold in those small-town streets - if you know how to become part of the community.
βοΈ Snippets
Levine Leichtman Capital Partners acquires Synergy HomeCare, betting big on the growing in-home care market. With 240 franchisees across 42 states, the company represents a strategic play in an expanding healthcare services sector. (Source: Franchise Times)
Slim Chickens charts aggressive growth trajectory, achieving 70 percent restaurant expansion in three years through strategic blend of technology, quality food, and robust franchisee support. The brand's approach combines AI-driven operations with Southern hospitality, positioning it as a leading player in the competitive quick-service restaurant market. (Source: QSR Magazine)
Nozzleman Pizza secures breakthrough Walmart partnership, planning 300 nationwide locations with celebrity investor Snooki. The franchise offers unique community-focused model targeting first responders and everyday consumers. (Source: Franchise Times)
Franchise Times honors 12 standout players transforming franchise landscape, with highlights including Blackstone's Tropical Smoothie acquisition and K9 Resorts' $10 million strategic investment. The annual awards recognize most innovative merger and acquisition strategies driving franchise growth. (Source: Franchise Times)