Emerging trends and critical insights shaping the future of franchising in the year ahead.
It’s no secret that the business climate is changing today at a faster pace than ever before, and the franchise sector is not immune.
In fact, because franchising is a business structure within which the franchisor is responsible for setting up and helping franchisees do business better, it can be said franchise groups should be leaders in embracing the best in new business trends. The best and most successful franchise groups certainly do.
So, what are these trends and how will they impact on the everyday business of franchising in Australia.
Embracing Technology: AI, Automation, and Digital Transformation
This is probably top of the list. We have been chatting about the need for franchisors to embrace a digital way of doing business for several years now. Adopted intelligently, digitisation means the group and your franchisees in particular can more easily and consistently run their side of the business, giving them time to focus on what matters, serving your customers and bringing in the money.
In 2025 this must include AI, and automation must work to make the job easier for customers and franchisees. From customer service chatbots to supply chain management, technology will continue to streamline processes, reduce costs, and enhance customer experience. AI-driven data analytics will also provide valuable insights, enabling franchise owners to make smarter decisions.
And yes, this means investment in cybersecurity will be crucial to protect sensitive data.
Those who embrace these advancements early will gain a competitive edge, while those who lag may struggle to stay relevant in an increasingly digital marketplace.
(We had a blunt reminder about security recently when Brian suffered Identify Theft engineered through a very clever MyGov interception. That smart that it fooled the ATO as well. A chance discovery stopped the fraud – but took nine, yes nine hours to attend to. So be warned.)
Evolving customer expectations: personalization and convenience
Hand in hand with the increasingly digital business world, customer expectations are evolving rapidly, with personalization and convenience becoming top priorities. Don’t let the digital world mean you forget the human touch.
Face to face is still important so leave room for that to happen. But also recognise that within the digital world people must feel they are unique. Leverage data you have on each customer to offer a tailored experience, such as personalised promotions and localised products. Even Amazon, Subway and Maccas recognise that need by offering different services and products in different markets.
Customers also look for improved service such as great speed of service, easy payment options, and omnichannel accessibility, which will become more critical.
And things such as loyalty programs need to feel personal and meaningful.
By focusing on customer-centric trends, franchisees can focus on developing deeper connections with their clientele, boosting retention and long-term loyalty in a competitive landscape.
Sustainability as a core value
Sustainability is no longer optional—it’s a competitive necessity.
In 2025, franchises must prioritize eco-friendly practices, from sourcing sustainable materials to reducing waste and energy consumption. Consumers are increasingly supporting brands that align with their values, and franchisors must set clear environmental goals.
Implement green initiatives, such as packaging alternatives or carbon-neutral strategies, can also enhance brand image.
It’s important though to be true to these values. Customers are sophisticated and can see through slick marketing without substance. Painting the service centre forecourt green will no longer count as having a green business.
So, don’t be shy or modest, shout about it by letting everyone know what you’re doing. Transparency in sustainability efforts will build trust and loyalty, attracting increasingly environmentally conscious consumers.
Workforce dynamics: retention, upskilling, and employee well-being
Franchise success in 2025 hinges on retaining and developing a skilled workforce. Both franchisees and staff (theirs and yours) need to be looked after. And if the digital environment is to work, franchisors must focus on upskilling everyone to meet the demands of a tech-driven environment as it sweeps forward at an alarming pace.
Employee well-being will also be a critical factor, with mental health support and a strong workplace culture enhancing retention. Investing in people is not just a moral imperative but a strategic advantage in maintaining operational excellence.
Offering flexible work options, competitive benefits, and robust training programs will continue to be essential.
There’s also a growing trend towards avoiding “heart sinkers”—the employees who drain energy and dampen morale. The US calls it a “No Jerks Policy,” the UK calls it “No Arseholes,” and in Australia… well, let’s just say we’ve come up with something a bit blunter.
- Regulatory shifts: staying compliant and agile
It is no secret that the franchise sector has been the subject of significant change over the past few years with Parliamentary Committees examining the way business is run and reflecting their deliberations in changes to the Franchise Code of Conduct. Other business legislation has also changed, look at the Fair Work Act which puts more responsibility on franchisors to see their requirements are met.
Change at this level will not go away. Franchise businesses must stay vigilant as regulatory landscapes evolve.
In 2025, more changes in labour laws, tax policies, and data protection regulations could significantly impact operations. Franchisors and franchisees must stay informed and agile, adapting their practices to remain compliant. Engaging legal and compliance experts will help navigate complex regulations. Membership of a leading industry body such as the Franchise Council of Australia (FCA) can keep you well informed on this front. Building flexibility into franchise agreements and staying proactive in addressing policy changes will position franchises for sustainable growth amidst an ever-changing legal environment.
Conclusion: Setting the Course for Success
The future of franchising in 2025 is brimming with both challenge and opportunity. Franchisors that embrace digital transformation, personalise customer experiences, commit to sustainability, support their workforce, and stay ahead of regulatory change will be the ones to watch.
These trends aren’t just “nice ideas”—they’re essential for success. By staying agile, future-focused, and people-centred, franchise groups can do what they do best – thrive in a rapidly evolving world. The most successful will be those who lead the way, not follow it.
Brian Keen has been involved in the franchise industry for more than 30 years and Prue has been involved with systems and business for as long. Together they founded Franchise Simply, Systems2Grow and Microloan Foundation Australia. Brian’s on-the-ground business experience as a multi-unit franchisee, franchisor and consultant helping many of the big names create their own franchise systems and growth over the years combined with Prue’s structured approach has been fed into Franchise Simply, helping today’s SMEs and Franchisors grow their business by franchising.