Impact of Labor Shortages on Franchising

Despite the current level of concern on inflationary pressure, the U.S. economy appears robust by almost any measure. Especially considering the amount of job openings and the current unemployment rate – which stands at the lowest level in decades, 3.6%. Things are going so well that one of the biggest problems facing business owners is where to find qualified labor.


Thankfully, the franchising industry is uniquely equipped to meet this challenge, as noted in the recent study results from the International Franchise Association (IFA) and market researcher FRANdata. The duo recently published their joint report, “A 2022 Study on the Impact of Labor Shortages in Franchising”, conducted through interviews with more than 200 franchise executives, 197 individual brands, and 90,000 establishments. Here are the key takeaways:

Widespread Labor Shortage

The survey found that four out of five franchisors, 87.6%, reported that recruiting qualified candidates is the top challenge for their franchisees. The problem has become an obstacle to growth, with 80% reporting a lack of workers is holding up expansion plans.

Doors Open, Lights On, Wages Up

The report highlights that a majority of franchise establishments have still been able to maintain – and in some cases, increase – their operating hours over the past six months. More than half of the brands revealed that they’ve increased wage rates for their workers, with two-thirds of them anticipating another jump in the foreseeable future.

Where Training and Support Kick In

Although the biggest problem facing franchisors at the moment is finding adequate labor, one of their biggest strengths is mitigating the negative effects. With such a strong emphasis on initial training and ongoing support, a majority of franchisors have been able to function accordingly. The report’s authors pin this on the technical and career-enhancing skills provided by the franchisors in both recruiting and retaining workers. And this robust pipeline of accrued talent should only grow stronger, as many brands have doubled down on assistance, training, the recognition of top talent, and improved recruiting efforts. Thanks to the technology and communicative abilities of brands serving their franchisees, they’ve been able to provide owners in their systems with actionable initiatives, and fast.

The proven business models of franchising are purpose-built, designed to meet today’s workplace challenges such as recruiting and retention. In many cases, these business models have been perfected over the years, dramatically increasing the operational efficiencies on behalf of their franchisee family. But you don’t typically see the value in such stark terms, until faced with a pressing issue such as finding enough workers to fill a shift.

There’s a lot more to love about the unique business models found in every franchise organization, where the collective success of each franchisee in the system is of equal importance. If you’d like to explore the full-range of possibilities that come with small business ownership through franchising, let FranNet of DFW & Oklahoma be your guide. Our no-cost, no-obligation consultations have helped hundreds of entrepreneurs in North Texas and Oklahoma secure a future that belongs to them and them alone. If you’d like to get started on your own entrepreneurial journey, we’d love to introduce you to a whole new world of possibilities through franchise ownership.

May 3, 2022