Tag: Franchise Expansion

RESTAURANT FRANCHISE BOOM: SOARING CONSUMER SENTIMENT AND SMART TARIFF STRATEGY FUEL U.S. DINING GROWTH. REPORT JULY 2025

Posted on by Contributing Writer

Photo By Wade Austin Ellis

As of July 27, 2025, surging consumer sentiment now at 61.8 has ignited growth across the restaurant franchise sector. Operators are seeing same store sales rise by 2.0 percent, benefiting from easing inflation, resilient consumer spending, and strategic tariff management. These factors have combined to create a powerful foundation for franchise growth and record-breaking food industry profits.

RESTAURANT FRANCHISE BOOM: SOARING CONSUMER SENTIMENT AND SMART TARIFF STRATEGY FUEL U.S. DINING GROWTH.  REPORT JULY 2025

By Gary Occhiogrosso, Founder, Franchise Growth Solutions

Franchise My Business | Franchise Growth Solutions
Whether you’re looking to expand a current franchise or start franchising your business, Franchise Growth Solutions has an expert team to support you.

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As of July 27, 2025, the U.S. consumer sentiment recovery is a linchpin in the ongoing strength of the restaurant industry. With inflation easing, costs of goods falling, and Wall Street at all‑time highs, consumer appetite for dining out is fueling upward momentum for restaurant operators and franchisees.

  1. Consumer Confidence Rebound Clears the Path for Franchise Expansion

The University of Michigan’s Consumer Sentiment Index climbed to 61.8 in July 2025, up from 60.7 in June, signaling renewed optimism among U.S. consumers.

Further, 12 month inflation expectations fell to 4.4 percent, while long term expectations eased to 3.6 percent, their lowest levels since February 2025.

For restaurant franchises, this rebound is pivotal. Positive consumer sentiment translates into increased discretionary spending, stronger foot traffic, and higher average check sizes, laying the groundwork for aggressive unit growth in the second half of the year.

  1. Restaurant Franchise Growth Fueled by Same Store Sales Momentum

According to Black Box Intelligence, same store sales increased by 2.0 percent in June 2025, marking the strongest monthly performance since January. Although traffic dipped slightly by 0.9 percent, improved guest spend more than offset the slowdown.

A report from the National Restaurant Association supports this trend, revealing that 49 percent of restaurant operators experienced higher same store sales year over year in June, compared with just 36 percent reporting improved traffic.

For franchise owners, these numbers mean higher per unit revenue, healthier margins, and an attractive financial model for scaling operations.

  1. Inflation Rate in 2025 Cooling and Supporting Profits

The inflation rate 2025 shows steady cooling. Recent consumer price index data indicates that year over year price growth slowed to 2.4 percent, with monthly increases limited to 0.1 percent .

For restaurant operators, particularly franchisees, lower inflation means better control over food costs, operational expenses, and menu pricing. This environment provides room to preserve profitability while offering value-driven promotions that strengthen competitive positioning.

  1. Tariff Impact Transformed into Strategic Advantage

Although tariffs remain higher than in previous years, their impact on consumer spending has been far less disruptive than predicted. After peaking near 27 percent in early 2025, average effective tariff rates eased to around 15.8 percent by June.

Budget Lab data shows that tariffs have increased consumer prices by an estimated 2.3 percent, costing the average household $3,800 in purchasing power but generating $3.1 trillion in federal revenue.

Rather than hurting sales, many restaurant franchises have absorbed the incremental costs. Chipotle, for example, announced it would manage tariff-related increases internally to maintain its value proposition.

Strong operational scale, efficient supply chain strategies, and loyalty driven pricing have turned potential tariff challenges into a franchise advantage.

  1. Promotions, Takeout Trends, and In Store Experience Innovations

Value promotions are driving success for franchises:

McDonald’s cut combo meal prices by approximately 15 percent, positioning itself as a value leader. Taco Bell introduced Luxe Cravings Boxes priced between $5 and $9, achieving record sell-through rates.

Chili’s “3 for Me” campaign boosted same store sales by 31 percent.

Applebee’s leveraged its “2 for $25” menu to achieve a 4.9 percent same store sales increase in Q2 2025.

Simultaneously, top restaurant brands are improving in store experiences to reconnect with customers seeking comfort, quality, and community: Starbucks reintroduced ceramic mugs and warmer interiors.Cava enhanced design aesthetics, adding greenery and better lighting.Dave and Buster’s invested in immersive entertainment features to elevate experiential dining.

For franchises, these moves address takeout trends while enhancing loyalty and boosting long term profitability.

  1. Consumer Spending Stays Resilient

Despite widespread reports that consumers are “cutting back,” data reveals the opposite. A recent Business Insider study found that restaurant spending rose 2.1 percent between March and June 2025, compared with just a 0.1 percent increase for grocery spending.

Consumers are clearly prioritizing experiential dining and convenience, reinforcing the durability of the restaurant franchise model.

  1. The Franchise Outlook for the Second Half of 2025

All indicators point to a strong second half for restaurant franchises:

Consumer sentiment at 61.8 supports continued spending growth.Same store sales momentum and innovative promotions are improving per unit performance.

Inflation control is lowering cost pressures, supporting reinvestment.Tariffs are being managed proactively, minimizing consumer impact.Takeout and loyalty infrastructure continues to dominate, aligning with evolving consumer expectations.

Franchises that embrace value, innovate guest experiences, and scale strategically are positioned to outperform independents and capitalize on franchise growth opportunities.

  1. Action Plan for Restaurant Franchise Operators

Leverage Consumer Sentiment Data: Align expansion strategies with regions demonstrating the strongest recovery.

Prioritize Value Bundles and Loyalty Programs: Win traffic without sacrificing margins. Invest in Guest Experience: Enhance in-store aesthetics to complement digital convenience.

Optimize Supply Chains: Use centralized buying power to mitigate tariff and commodity volatility. Target Delivery and Takeout Channels: With 75 percent of restaurant traffic involving off-premises orders, capitalize on infrastructure that supports consumer demand.

Conclusion

July 2025 marks an inflection point for the restaurant franchise industry. Rising consumer confidence, easing inflation, smart tariff strategies, and consistent same store sales growth are creating an environment primed for profitability.

Franchises have proven their ability to weather economic shifts, adapt pricing models, and deliver value at scale. The result is a thriving segment of the U.S. economy, where operators can grow margins, expand units, and increase food industry profits in the months ahead.

News Highlights

Verified Sources and Websites

    Website
Consumer Sentiment and Inflation Expectations Reuters https://www.reuters.com
Same Store Sales Growth Black Box Intelligence https://blackboxintelligence.com
CPI Inflation Data Bureau of Labor Statistics https://www.bls.gov
Restaurant Spending Trends Business Insider https://www.businessinsider.com
Tariff Impact and Resilience Budget Lab, Yale https://budgetlab.yale.edu
Promotions and Takeout Value Times Union https://www.timesunion.com
In Store Experience Innovation MarketWatch https://www.marketwatch.com
Off Premises Dining Trends Food & Wine, NRA Report https://www.foodandwine.com

Key Stats Summary

Indicator Value / Change
Consumer Confidence (Conference Board) 93 in June with modest July rebound
Inflation Expectation (12‑mo) 4.4% (down from 5.0%)
Long-run Inflation Expectation 3.6% (lowest since Feb ’25)
Retail Sales (June) +0.6%, including restaurants
Unemployment Rate 4.2%, historically low
Tariff Incidence
(on consumers) 49% of tariff cost passed to consumers
Imported good price rise 3% March‑July
Chipotle same-store sales – 4% in Q2
McDonald’s same-store U.S. sales – 3.6% in Q1
S&P 500 & Nasdaq at record highs

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This article was researched, outlined and edited with the support of A.I.

FRANCHISING, NOT JUST FOR RESTAURANTS – THE KEY TO SCALABLE SUCCESS

Posted on by Contributing Writer

Image created with canva 

Franchising isn’t just for fast food anymore. From fitness centers to home services, businesses across various industries are leveraging the power of franchising to scale efficiently and sustainably.

FRANCHISING, NOT JUST FOR RESTAURANTS – THE KEY TO SCALABLE SUCCESS

By FMM Contributor

Franchising Beyond Restaurants: A Strategic Expansion Model for Diverse Industries

Franchising is often synonymous with fast-food chains and coffee shops, thanks to its early success in the restaurant industry. However, over the past few decades, this business model has transformed into a dynamic and adaptable strategy that is now employed across a wide range of industries. What was once predominantly associated with food and beverage chains has evolved into a robust expansion model that includes everything from fitness centers, health and wellness franchises, and education services, to home services like cleaning, landscaping, and pest control.

This diversification highlights the scalability of franchising, which offers a structured and efficient pathway for businesses looking to expand their reach while maintaining a high level of consistency and quality across all locations. For many businesses, franchising provides the opportunity to grow faster and more effectively than they could through traditional expansion models. Instead of relying solely on the capital and management resources of the parent company, franchisors can harness the investments and local expertise of franchisees, reducing financial risk while gaining access to new markets.

As more industries realize the potential benefits of franchising, its appeal continues to grow. It allows businesses to scale quickly, tap into local knowledge, and mitigate risks, all while maintaining a strong, recognizable brand. Franchising is no longer limited to one industry but has become a universal growth engine for companies across a variety of sectors.

  1. Capital Efficiency and Accelerated Growth

Franchising allows businesses to expand without the substantial capital investment typically associated with opening new company-owned locations. By leveraging franchisees’ investments, companies can accelerate their growth trajectory while mitigating financial risks. This model is particularly advantageous for businesses seeking rapid expansion across regions or internationally.​

  1. Replicable Business Systems and Brand Consistency

A successful franchise model is built on standardized systems and processes that ensure consistency across all locations. This uniformity not only enhances operational efficiency but also strengthens brand identity, making it easier for customers to recognize and trust the brand regardless of location.​

  1. Shared Risk and Localized Expertise

Franchisees assume a portion of the operational risks, which can be particularly beneficial during economic downturns or market fluctuations. Additionally, franchisees often bring valuable local market knowledge and connections, enabling the business to tailor its offerings to specific regional preferences and demands.​

  1. Scalable Support Infrastructure

Franchisors typically provide comprehensive training, marketing support, and operational guidance, creating a robust support system for franchisees. This infrastructure enables franchisees to operate efficiently and effectively, reducing the learning curve and increasing the likelihood of success.​

  1. Strategic Market Penetration

Franchising facilitates entry into new markets with reduced risk and investment. By partnering with local entrepreneurs who understand the regional landscape, businesses can navigate cultural nuances and regulatory requirements more effectively, leading to smoother market penetration and acceptance.​

Conclusion

While franchising is often associated with the restaurant industry, its principles are adaptable to a wide array of businesses. By embracing franchising, companies can achieve scalable growth, maintain brand consistency, and expand into new markets with efficiency and reduced risk. This strategic approach not only benefits the franchisor but also empowers franchisees to build successful businesses within a proven framework.

Sources:

  • “The Franchise Industry Beyond Restaurants” – T2BB Solutions.
  • “Franchising in America: Not Just Fast-Food Restaurants” – U.S. Census Bureau.
  • “Franchise Opportunities Beyond Fast-Food” – International Franchise Professionals Group (IFPG).
  • “2025 Franchising Economic Outlook” – International Franchise Association (IFA).
  • “2025 Economic Outlook for Franchises” – PBMares.
  • “Franchise Experts Are Diversifying Beyond Food — So Should You” – Entrepreneur.
  • “Cross-Industry Franchising As An Investment: Why It Can Work For You” – Forbes.

 

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This article was researched, outlined and edited with the support of A.I.

THE BENEFITS OF TAKING YOUR RESTAURANT

Posted on by Contributing Writer

Image created with canva

Franchising your restaurant isn’t just about scaling, it’s about transforming a proven local business into a powerful, revenue-generating brand with national or even global reach. In this article, Gary Occhiogrosso breaks down the strategic benefits of turning your restaurant into a franchise, from leveraging franchisees for expansion and improving economies of scale to commanding higher EBITDA multiples from private equity firms. Discover why franchising can unlock exponential growth and why partnering with an experienced firm like Franchise Growth Solutions, with 40+ years of expertise and hundreds of franchise success stories, is the smartest move you can make.

THE BENEFITS OF TAKING YOUR RESTAURANT 

By Gary Occhiogrosso, Founder Franchise Growth Solutions ™️

Transforming your restaurant into a franchise brand can be a strategic move to accelerate growth, enhance brand recognition, and optimize operational efficiencies. By franchising, you leverage the entrepreneurial spirit of franchisees to expand your footprint without bearing the full financial and managerial burdens of opening new locations.

Proven Business Model

Franchising allows you to replicate a successful business model across multiple locations. Franchisees adopt your established systems, recipes, and operational procedures, ensuring the consistency and quality that customers expect. This replication reduces the risks of opening new outlets, as the model has already been tested and refined.

Rapid Expansion with Reduced Capital Investment

Expanding through franchising enables growth without requiring substantial capital investment from the franchisor. Franchisees provide the necessary funds to open and operate new locations, allowing for quicker market penetration and brand presence. This strategy accelerates expansion while mitigating financial risk.

Enhanced Brand Recognition

Each new franchise location serves as a beacon for your brand, increasing visibility and fostering customer loyalty. As the number of outlets grows, so does public awareness, which can lead to a stronger market position and a competitive edge over independent establishments.

Economies of Scale

A larger network of restaurants can negotiate better terms with suppliers due to increased purchasing power. Lower inventory costs benefit all franchisees, leading to improved profit margins and a more robust bottom line. Additionally, shared marketing expenses across the franchise system can result in more effective advertising campaigns at a reduced per-unit cost.

Comprehensive Training and Support

Franchisors typically provide extensive training programs to ensure franchisees understand the business model, operational procedures, and customer service standards. Ongoing support helps maintain consistency across locations and assists franchisees in overcoming challenges, contributing to the overall success of the brand.

Increased Revenue Streams

Franchising introduces new revenue channels through initial franchise fees and ongoing royalties based on sales. These funds can be reinvested into the business to support further growth initiatives, research and development, and enhanced support systems for franchisees.

Local Market Penetration

Franchisees often possess in-depth knowledge of their local markets, enabling them to tailor marketing efforts and community engagement strategies effectively. This localized approach can lead to increased customer satisfaction and loyalty, as the restaurant resonates more closely with the community’s preferences and values.

Higher EBITDA Multiples from Private Equity Exits

One of the most overlooked, but powerful, financial advantages of building a franchise brand is the increased valuation multiple at the time of sale. Private equity firms are drawn to franchise companies because of their asset-light structure, recurring royalty revenue, and scalable business model.

Independent restaurant groups might sell at a 3x to 5x multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). In contrast, well-run franchisors often command multiples ranging from 8x to 15x EBITDA, and in some cases even higher, depending on unit count, system-wide sales, franchisee validation, and brand strength. This means franchisors are positioned to create significantly more enterprise value and attract institutional buyers who see predictable cash flow and growth potential.

Ready, Set, GO!

When you’re ready to take the leap and transform your restaurant into a franchise brand, choosing the right partner can make all the difference. Franchise Growth Solutions ™️ brings over 40 years of hands-on experience in franchise development, operations, and sales. With hundreds of successful franchises launched under our belt, we know what it takes to build, scale, and position your brand for long-term success. From assisting you with your Franchise Disclosure Document (FDD) to designing your franchise sales process and building your national presence, our team of seasoned experts works with you every step of the way. If you’re serious about growth and want to do it right, Franchise Growth Solutions™️ is the team to trust.

 

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This article was researched, outlined and edited with the support of A.I.

SCALING YOUR FRANCHISE COMPANY SUCCESSFULLY

Posted on by Franchise Strategist

Photo by Randy Tarampi on Unsplash

One of the key franchise expansion strategies is to perfect your business model. Your business must be operationally sound, financially successful, and replicable in different markets. It must possess a unique selling proposition that can outshine the competition.

Scaling Your Franchise Business Successfully

Successful franchise expansion is the golden goose for every small business owner, offering an avenue to scale operations, reach new markets, and significantly increase profits. The dream of seeing your brand in multiple cities or countries is exciting, but the road to successful franchising is fraught with unique challenges. Thus, adopting strategic expansion techniques is paramount to ensuring sustainable growth.

One of the key franchise expansion strategies is to perfect your business model. Your business must be operationally sound, financially successful, and replicable in different markets. It must possess a unique selling proposition that can outshine the competition. A proof of concept is also crucial. This may involve operating one or more successful outlets before considering franchising.

Market research is another vital aspect of the expansion. It involves understanding consumer behavior, competitive landscapes, and the economic climate of potential locations. Studying market demographics and purchasing trends enables you to tailor your services to meet market demand, thus maximizing your franchise’s potential for success.
Invest in a comprehensive franchise disclosure document (FDD). An FDD provides potential franchisees with essential information about the franchisor’s business, including financial performance, legal issues, and operational procedures. This document is a legal requirement in many jurisdictions and aids franchisees in making informed decisions about investing in your franchise.

Pricing your franchise correctly is another critical strategy. The franchise fee should be competitive yet profitable, reflecting the value of your brand and the support you offer to franchisees. Carefully consider ongoing fees, such as royalty and marketing fees, as these will impact your franchisees’ profitability and, in turn, the attractiveness of your franchise.

The training and support you offer franchisees can significantly influence your franchise’s growth. Comprehensive training programs and ongoing support systems foster successful franchise units, enhancing your brand’s overall reputation. This includes offering operational training, marketing support, assistance in site selection, and ongoing business advice.

Lastly, your expansion should be strategic in its pace and location. Grow at a rate that your resources can handle to avoid overextension. Start in areas close to your original location, as this allows for easier management and support. Also, consider area development or master franchise agreements where one franchisee operates multiple units or an entire region. This can hasten your expansion while minimizing management complexities.

Franchise expansion is an exciting but challenging venture. The key lies in meticulous planning, diligent execution, and ongoing franchise support. By perfecting your business model, conducting rigorous market research, and providing comprehensive training, you can maximize the potential for success in your franchise expansion journey.
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Article written with the support of AI