On November 19th, our CEO and Co-Founder Steve Buors, spoke at a Lunch & Learn with the International Franchise Association. He shared franchise development trends for 2024, expectations for the year ahead, and franchisee acquisition strategies. Continue reading for a summary of the webinar, or for a more in-depth look into this topic, watch the full recording of the webinar in the video below.
Franchise Development Trends in 2024
Our data shows fluctuating interest in franchise development searches from 2022 through the first quarter of 2024. Specifically, we saw a steep decline in interest between May and July this year, with a 7% decrease compared to 2023 and 10% compared to 2022. Following the drop in market interest, we observed a strong recovery in Q3, with interest levels aligning with those of Q3 2023 and surpassing those from 2022.
As expected, political and economic factors have continued to heavily influence interest in franchise development. At the start of Q3, the Feds reduced interest rates for the first time in four years, leading to a noticeable spike in franchise inquiries. While interest rates, inflation, and other political or economic events do not directly dictate franchise interest, they act as indicators of potential behaviour. For instance, high inflation or major events like elections often discourage people from taking on significant debt or making major life changes.
For the remainder of Q3, we saw a consistent increase in click-through rates (CTR), with September achieving the highest CTR in two years. However, despite this strong CTR, conversion rates remained relatively low. This suggests that while individuals actively search for franchise opportunities and engage with ads, they are not following through with conversions. Interestingly, cost per lead remained low, despite the low conversion rates. We believe this indicates a high level of interest, tempered by hesitation due to ongoing economic and political uncertainties.
Our Expectations for 2025
We believe that interest in franchise development will continue to grow into Q4 and 2025. Our data and market experience suggest there is significant pent-up demand from those interested in franchising. With further reductions in interest rates and inflation expected, we anticipate sustained interest in franchise opportunities. We project that Q1 2025 will perform similarly to, or surpass, Q1 2022 in terms of click-through rates (CTR), conversion rates, and cost per lead.
We’ve also noted an increase in franchise marketing budgets throughout Q4, a trend we expect to persist into Q1 2025. Along with this growth, we foresee heightened competition for franchisee leads. While the timing will be favourable for those looking to enter the franchise industry, the market is likely to remain competitive.
Franchise Acquisition Strategies
Franchise acquisition is increasingly driven by digital channels. Prospective franchisees are more self-reliant, researching your brand and competitors long before they reach out. Understanding this shift in behaviour is key to effectively engaging and converting these leads.
To capture potential leads, we suggest you start with search advertising. Focus on organic search (SEO) by optimizing your website with valuable content that attracts qualified leads. Once you are confident in your organic search, you can begin to integrate paid search ads to target specific, high-conversion keywords related to your franchise. Both strategies work well together to drive traffic and generate leads. Ensure your landing pages are optimized for conversion. Make sure they are mobile-friendly, with a clear, concise headline, a visible call-to-action, and a simple form to capture leads. Keep the content scannable and visually engaging, as most visitors will skim rather than read in detail.
Once search advertising is in place, consider expanding to social advertising. Platforms like Meta, LinkedIn, and TikTok are effective for raising awareness and generating leads. Authentic content, such as real images of your franchisees, works best. Video ads are also highly effective and should be used both in social campaigns and on your website.
Lastly, don’t underestimate the power of influencer marketing. Your most valuable influencers are your current franchisees. Their testimonials and experiences can build trust and credibility, making prospects more confident in their decision.
