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.
As global markets grapple with economic uncertainty, what impact do you expect this to have on franchisors in the coming 12 months?
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?
“We’ve got to stay engaged with each other about our challenges. These are long-term relationships between franchisors, franchisees, and suppliers, and most people want those relationships to last”
What can we be doing collectively, as an industry, to help mitigate these challenges?
In times of uncertainty, people really value community. And franchising has built-in advantages in that area. We have strong associations worldwide – like the IFA and others – that give us platforms to share best practices and have meaningful discussions.
This collaboration happens both between brands and within systems. Franchise businesses have a strong sense of community, not just between franchisors and franchisees, but with suppliers too. Maintaining open and constructive dialogue is key. You’ve got to have franchisees at the table for those conversations. It can’t be a one-way conversation where it’s the franchisor’s way or the highway.
I always point to Gary Robins, one of my officers on the IFA Board. He says, if you’re just looking at a map and not staying in touch with the people on the ground, you’ve probably got a problem. You need to be out there. How are economic pressures showing up in real life – IRL, as the kids say – not just on a spreadsheet?
How is the IFA advocating for franchising right now, especially around tariffs and policymaking?
We don’t have a formal advocacy position on the President’s tariff policy. What we’ve done is highlight the real-world impact of that policy to our members and share that with the White House and Congress, both through written materials and private conversations.
It’s the topic everyone’s talking about in Washington and, frankly, around the world right now. But we’re not saying it’s wrong or bad in a heavy-handed way because that’s just not the approach that works with this administration.
You’ve got to pick your battles. Some folks would like us to be louder, but we focus on policy issues that directly impact franchising: things like the franchisor-franchisee relationship, or regulatory changes like joint employer rules that we’ve dealt with over the past decade.
Are there any opportunities to come of this for franchising?
We’ve got to stay engaged with each other about our challenges. These are long-term relationships between franchisors, franchisees, and suppliers, and most people want those relationships to last.
One of the biggest opportunities right now is that people are looking for more control over their own destiny. From a franchise development standpoint, if you’re a brand looking to grow and attract people who want to grow with you, now’s the time to lean into that sense of community and stability.
There’s no guarantee of success in any business, but franchising gives people access to proven systems and strong support networks. The strongest brands and the best business models are going to stand out. It’s about communicating your value proposition and your differentiator clearly because that’s what people are looking for in times of uncertainty.
Interview by Charlotte Smith
