March Franchise Discovery Newsletter: Where to Invest in 2025

Personal services, retail food, product and services are all expected to grow in 2025. Where should you focus your investments?

Read more in our March Issue of The Franchise Discovery Newsletter. Brought to you by the YOU Network. Then make an appointment with me to find out more!

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The Franchise Discovery

Vol. 20

Learn Where to Invest in 2025 and Why

In its latest projections, FRANdata forecasts another year of substantial expansion for franchised businesses. Key highlights for 2025 include:

• Total franchise establishments to rise by 2.5%, surpassing 851,000 units.

• Franchise employment to grow by 2.4%, adding 213,000+ new jobs and exceeding 9 million total employees.

• Franchising output to expand by 4.4%, crossing the $900 billion mark by year-end.

• Franchise GDP increasing by 5%, reaching an estimated $578 billion.

Among the leading industries, personal services is expected to see the highest expansion in 2025 at 4.3%, followed closely by retail food, products, and services at 3.5%. Employment gains in these segments will account for most of the new franchise jobs, a direct result of consumers’ continued willingness to spend on personal services and retail offerings.

Let me know if you'd like this in a different format or combined with Volumes 17 and 19 for a full newsletter digest.

While widespread labor shortages have eased somewhat, rising labor costs remain a key concern—particularly in the 21 states set to raise their minimum wage, putting added pressure on quick-service restaurants (QSRs) and other lower-wage sectors.

Overall, franchise output is on track to reach $936.4 billion, bolstered by moderating inflation and stronger disposable incomes. Continued investment in automation and AI will help boost efficiency, while improved lending conditions encourage further system-wide expansion.

Top 10 States for Franchise Growth

1. Georgia

2. North Carolina

3. Virginia

4. Arizona

5. South Carolina

6. Pennsylvania

7. Tennessee

8. Florida

9. Colorado

10. Maryland

Why Georgia and North Carolina Lead the Pack

Georgia consistently ranks at the top thanks to a winning combination of pro-business policies, a strong talent pipeline, and robust population growth—particularly in the Atlanta metro area. Statewide initiatives streamline licensing and reduce red tape, making it easier for new franchise units to launch.

In North Carolina, thriving urban centers like Raleigh and Charlotte drive much of the state's momentum. Technology, healthcare, and education sectors create a diversified economy that supports multiple franchise concepts, from retail and food to professional services. Meanwhile, the state's comparatively low tax burden and consistent in-migration provide an ideal foundation for franchise expansion, appealing to entrepreneurs looking for manageable operating costs alongside a growing pool of consumers.

Franchising’s Top 5 Categories for 2025

As consumer demand evolves and new opportunities arise, five key franchise sectors stand out for their significant growth potential, resilience, and ability to adapt to changing economic conditions. Below is an overview of why these categories hold top spots in 2025 and how they plan to maintain their momentum.

1. Personal Services

Why It’s a Leader:

• High Demand for Wellness & Convenience: Whether it’s beauty, fitness, spa treatments, or childcare, consumers increasingly view these services as essential.

• Recurring Revenue Models: Membership-based or subscription-style offerings stabilize cash flow and build loyal clientele.

• Room for Specialization: From IV therapy to niche fitness studios, businesses can differentiate by honing in on specific consumer needs.

Success Factors:

• Tech Integration: (e.g., mobile apps, automated booking) to enhance customer convenience.

• Skilled Staffing & Training: to deliver consistently high-quality, personalized experiences.

Example:The Exercise Coach — A fitness franchise using cutting-edge tech and personalized programs for 20-minute, results-driven workouts.

2. Retail Food, Products, & Services

Why It’s a Leader:

• Steady Consumer Spending: Moderating inflation and rising disposable incomes support grocery, specialty retail, and neighborhood convenience stores.

• Omnichannel Retailing: Blending in-store shopping with online platforms meets consumers wherever they prefer to buy.

Success Factors:

• In-Store Experience: Attractive layouts, quick checkout, friendly staff.

• Click-and-Collect or Delivery: Flexible pickup and shipping options widen the customer base.

3. Quick-Service Restaurants (QSR)

Why It’s a Leader:

• Demand for Convenience & Value: As more workers return to offices, quick meal solutions — especially breakfast and lunch — thrive.

• Tech-Driven Efficiency: AI-powered ordering, loyalty apps, and automation offset rising labor costs and speed up service.

Success Factors:

• Menu Innovation: Limited-time offers, plant-based options, or healthier twists attract new demographics.

• Location Strategy: High-traffic areas near workplaces and highways support steady foot traffic.

4. Healthcare & Technology

Why It’s a Leader:

• Expanding Demographics: Aging populations require more home healthcare, physical therapy, and specialized clinics. Telehealth and IT support also rise.

• Recurring Revenue: Subscriptions, retainer services, and insurance reimbursements ensure consistent income streams.

Example:American Family Care (AFC) — An urgent care franchise bridging gaps between primary care and ERs with neighborhood clinics and flexible hours.

5. Commercial & Residential Services

Why It’s a Leader:

• Home Improvement Boom: Demand for renovations and repairs stays strong, even in slower housing markets.

• Business Maintenance: Offices and commercial facilities rely on contract services like cleaning and security.

Success Factors:

• Reliability & Trust: Word-of-mouth and repeat business drive success.

• Smart Scheduling & Workforce Management: Efficient routes, booking, and skilled labor help operators stand out.

Example: CertaPro Painters — A top brand offering high-quality painting services with strong branding and streamlined project management that foster repeat business.

Interest Rates and Small Business Lending

In 2025, the lending environment is expected to be more predictable and favorable for small businesses. After prior rate hikes, the Federal Reserve has implemented incremental cuts, creating stable borrowing costs. Banks are increasingly open to extending credit, supporting franchise development and expansion. While rates aren’t at early 2020s lows, they remain manageable for entrepreneurs looking to open or grow franchises.

Moving Forward

The 2025 franchise outlook is strong:

• 851,000+ establishments expected.

• $900B+ in economic output.

• Consumer demand remains solid.

• Focus has shifted from labor shortages to managing labor costs.

Top opportunities: Georgia and North Carolina lead the way. Personal services, retail, QSRs, healthcare/tech, and commercial/residential services align with shifting consumer trends.

Need Guidance?Explore these opportunities or others with a free consultation.