What Franchise - Issue 21.2

“PERSONAL-SERVICE FRANCHISE GROWTH IS SPILLING INTO PROFESSIONAL SERVICES” Katie Bullon, CEO, activ Marketing Franchise “INVEST IN YOUR FRANCHISEES TO BOOST RECRUITMENT” Rebecca Newenham, Franchise Consultant and Founder of Get Ahead “THE FUTURE OF FRANCHISING BELONGS TO TECH-LED, INVESTOR-READY BRANDS” Dani Peleva, Founder & CEO, Franchise Fame “Potential to be a strong year for franchisee recruitment” David Paulson, Global Franchise Development Manager, ERA Prospects come in with high expectations around tech and data solutions, so franchisors need to stay at the leading edge of AI and emerging technologies. While AI can create real efficiencies, we shouldn’t lose sight of the fact that we’re people first, both in howwe work and howwe deliver client services. With growing competition and a challenging economic and geopolitical climate, franchise recruitment remains a challenge. It’s about embracing tech and data-driven solutions, investing in the right recruitment channels, and staying focused on the people behind the process – all supported by a proven, resilient business model. The latest BFA survey shows “personal services” remains the fastest-growing area of UK franchising, with a 53% rise in the number of systems since 2018. These include tutoring, wellbeing and other people-focused services. Alongside, ONS data continues to show more than four million owner- operated businesses across the UK, reflecting a long-standing appetite for independent working. In the US, the trend has already moved further. Forbes highlighted the rapid rise of micro franchises not only in personal services, but across consultancy, coaching, and professional sectors. These models thrive because one person can deliver the quality, structure and consistency of a much larger organisation, often with lower setup costs and the ability to operate from home. UK economic conditions are creating similar momentum. The 2025 Budget places additional pressure on many small limited-company owners. Employment costs continue to rise, making traditional staffing models more challenging. Micro service franchises avoid many of these pressures, enabling individuals to operate without employees and sidestep payroll risk, HR overhead and recruitment strain. They also benefit from the broader franchise sector’s strong performance, with the BFA reporting low commercial failure rates and 89% of franchise units being profitable. My prediction is that 2026 will be the year this shift accelerates. The growth currently centred in personal- service franchising will extend further into professional service sectors. Skilled individuals will look for independence with a safety net, and micro franchises offering structured, staff-free models will meet that need. I believe the US provides a clear blueprint for where the UK is heading. Ongoing economic pressures mean that prospects are struggling to find the funds to invest in a franchise and prefer the regularity of employment income. Competition is also fierce, with so many franchises available across a myriad of sectors. Despite a slightly more positive picture for the British economy, economic pressures look set to continue. Franchisors need to focus on the value of their existing franchise network and not rest on their laurels. At Get Ahead, we’re implementing several initiatives to nurture existing franchisees.We are providing bespoke 90-day coaching plans and have created an HR service for franchisees to sell to their clients, with tiered packages.We’re constantly evaluating how AI can help us work more efficiently and build robust platforms for long-term resilience. It’s also about keeping up to date with what customers wants, so that franchisees have everything at their fingertips to provide the best support to their clients. Not only is that good for franchise retention and income, but it also boosts franchise recruitment. Your existing franchisees are your ambassadors and the gateway to franchise success. On the technology and operations side, automation is going to take centre stage. Tech-enabled models will be highly sought- after, and brands that embed strong automation, AI-powered marketing and SaaS tools into their systems will have a real edge. It’s all about cutting labour costs and streamlining operations, whether that’s through smarter diagnostics in QSR or more efficient digital workflows. Franchisors will also need to pay closer attention to Generative Engine Optimization to stay visible and properly cited within AI search. When it comes to investment and ownership, models designed with investors in mind will continue to surge. Systems that offer real scalability and flexibility are already being rewarded by the market. Expect further growth in semi- passive and absentee-ownership opportunities, as well as wider adoption of the FICOmodel. Meanwhile, demand for low-cost, low-labour concepts such as vending franchises will continue to boom. Wellness and health-focused brands focused on physical and mental optimisation look set for growth, from cryotherapy to services supporting neurodiversity. Sectors that prove consistently recession-resistant, particularly home services and maintenance, especially those with green credentials, will remain attractive. Franchisors need operational efficiency, investor readiness, and strict regulatory compliance to win in this new environment. 51 WHAT-FRANCHISE.COM Interv iew | FEATURE