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- ๐Who dominated 2024?
๐Who dominated 2024?
Explore 2024's top franchise dominators, and why cross-industry franchising is booming.
Welcome ๐ to Franzy Five by Franzy.com! ๐
From multi-unit dominators to cross-industry success stories, we're unpacking franchising's biggest shifts. Discover why major operators are reshaping the industry, smart exit strategies, and how diversification is becoming a key to sustainable growth.
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.
This weeks' Franzy Five:
๐ฅ Multi-unit Operators Reshape Franchising
Key Highlights:
Multi-unit operators now control 56% of all franchised units in the U.S., with 42,891 operators managing 241,380 units. The average ownership has increased to 5.5 units per operator, showing significant consolidation in the industry.
Franchise transfers are increasing at a 4.8% compound annual growth rate over the past decade, indicating a more fluid market for buying and selling existing units.
Major QSR operators are facing financial difficulties, with some filing for Chapter 11 bankruptcy. The shift to remote work has particularly impacted locations dependent on office workers and downtown traffic.
Certain franchisees have established strong regional dominance, such as Flynn Group controlling 900 units in the South and The Dhanani Group operating 843 units in the same region, demonstrating the growing influence of large-scale operators.
๐๏ธ Why It Matters:
The evolution of multi-unit operators demonstrates the growth potential within franchising, showing how single-unit owners can scale into larger operations over time. Despite challenges like rising costs and changing consumer patterns, major investment firms continue to bet on franchising, suggesting the industry remains profitable at various levels of ownership. The increasing ownership transfers point to both opportunities and risks for buyers and sellers in the franchise market.
๐ Cross-Industry Franchising: Why It Works
Key Highlights:
When one industry faces challenges (like restaurant slowdowns during lockdowns), investments in other sectors (like healthcare) can offset losses and maintain steady income streams.
Multi-industry franchise owners create efficiencies by sharing administrative resources, cross-training staff, and developing joint marketing strategies across their different businesses.
Operating across multiple franchise systems provides owners with diverse insights, allowing them to test strategies in one sector and apply successful approaches to others, leading to smarter expansion decisions.
๐๏ธ Why It Matters:
As economic uncertainty grows, cross-industry franchising offers a proven strategy to build sustainable growth through diversification. Rather than putting all resources into one sector, franchise owners can create a more stable business model by spreading risk across industries while leveraging shared resources and knowledge to increase profitability across their entire portfolio.
๐ 5 Trends Impacting Foodservice in 2025
Key Highlights:
Health-conscious menus and plant-based items are expected to dominate.
Labor-saving technologies like AI-powered kiosks are becoming standard.
Consumer focus is shifting toward localized and ethical sourcing.
๐๏ธ Why It Matters:
Understanding these trends is essential for preparing growth strategies. Operators can align their offerings and operational models to match evolving consumer demands, ensuring resilience in a shifting market.
๐ฐ Fast-Growing Freddyโs Explores Sale
Key Highlights:
Freddyโs CEO confirms discussions about a potential sale.
The fast-casual chain has expanded rapidly, adding over 150 units recently.
Private equity interest highlights Freddyโs strong growth trajectory.
๐๏ธ Why It Matters:
For investors and competitors, this potential sale reflects confidence in the fast-casual sector's growth. It also demonstrates how scalable models with strong consumer loyalty can attract premium valuation.
๐ธ Your Exit Strategy
Key Highlights:
Success in selling a franchise depends on recognizing key exit indicators, including financial performance plateaus, personal life changes, favorable market conditions, and operator burnout levels.
VMaximizing sale value requires meticulous preparation across three key areas - financial housekeeping (clean records, consistent profitability), operational excellence (documented procedures, trained teams), and performance documentation (growth metrics, KPIs).
Critical mistakes that hurt franchise sales include emotional pricing, incomplete financial documentation, waiting too long to prepare, and attempting to sell without professional guidance or understanding franchisor transfer requirements.
๐๏ธ Why It Matters:
Every franchise owner will eventually exit their business, whether through a planned sale or unexpected circumstances. A well-prepared exit strategy not only ensures maximum value at sale but also protects the investment of time and resources owners have committed to building their business.
๐๏ธ Snippets
๐ฆ The UPS Store Tops Rankings
The UPS Store is named #1 in its category by Entrepreneur, highlighting its proven business model and consistent support for franchisees.
๐ฎ Franchise Trends to Watch in 2025
FranchiseGuru predicts 2025 trends, including tech integration, eco-friendly operations, and global expansion as key drivers of growth.
๐ Donatos Pizza Eyes Major Growth
The Donatos Pizza will expand aggressively in 2024, leveraging technology and innovation to enhance customer experiences and delivery systems.
๐ Franchise Incentives Drive Growth
Franchises are sweetening the deal for entrepreneurs, offering things like fee cuts for veterans, help with building out locations, and more flexible payment structures. These incentives, like Melting Pot's program which helps with costs and risks, are designed to make franchising easier and more successful in the long run.