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Last year, Franchise Update Media released its 2025 Annual Franchise Marketing Leadership Report. The AFMR is a survey of top franchise marketing executives that provides insights into the latest consumer behavior trends, innovative marketing strategies, technology, and the impact of digital transformation on franchise businesses.
The AFMR is the first and only report dedicated to B2B and B2C franchise marketing leaders. It includes perspectives from industry experts about the evolving market dynamics and how franchises can stay ahead of the competition. This report delivers data collected from franchisors across the franchise community with responses organized by industry, marketing budget, system-wide sales, and more.
The annual report provides franchisors with the ideal resource for studying their marketing investments, benchmarking their sales and advertising budgets against their own industry categories, as well as setting goals and budgets for the year ahead. The AFMR also includes research into digital advertising practices, the growing investment in mobile and social platforms, and best practices in building marketing teams.
Over the last several years, the AFMR was expanded to include more information about online reputation management and the use of artificial intelligence (AI). It starts by identifying how many franchises are using AI and in which ways, along with their confidence in using the technology. It also looks at how the integration of AI has impacted the customer experience, its challenges and limitations, and their plans for future investment in AI. The report also explores franchisee involvement, franchisee training and support, and feedback from customers regarding the use of AI.
Many franchise brands have implemented customer loyalty programs. The purpose of these programs is twofold: to reward frequent customers with discounted items or services and to keep those same customers engaged and motivated to return.
In the latest AFMR, Franchise Update asked marketing officials about their loyalty programs, what was offered to the customer, and how they managed the platforms and gauged their success. It should be noted that across all franchise categories in the survey, most of these programs were managed electronically and in-house.
It is probably not surprising that the franchise categories that are most highly visible to customers had the highest percentage of loyalty programs. That included food (89 percent), and retail food (78 percent). Half of retail (non-food) franchises had loyalty programs, followed by a drop-off with service, brick-and-mortar (21 percent), and service, territory/non-brick-and-mortar (7 percent).
The survey also asked franchises if the reward for customers in these programs was a discount or a free product/service. The majority of franchise categories said they offer both. Below is a breakdown.
We also asked franchise executives how they determined if the program was profitable, and we provided eight potential answers. Their answers varied, but here were the primary findings:
Generally speaking, franchise brands with larger numbers of units most often have customer loyalty programs. The majority of franchises grouped by unit size offered both discounts and free products/services as part of their loyalty programs. Those results also generally skewed more toward the larger franchise brands.
We again received various responses to the question of how the franchise determined the profitability of its customer loyalty program. Here are some of the top results:
The AFMR also broke down the responses by systemwide revenue. Many of the groupings were split on having a customer loyalty program, although the majority of franchises with lower revenues did not have loyalty programs. That includes 100 percent of franchises with revenue levels between $250,000 and $501,000, and 80 percent of those between $1 million and $5 million.
When grouped by systemwide revenue, the vast majority of franchises offered both discounts and free products/services with their loyalty programs. We also asked survey respondents if loyalty programs replaced other forms of marketing, or are supplemental, in addition to other marketing. With the exception of two revenue groupings, all other groups said loyalty programs were supplemental to other marketing programs.
For more information about the 2025 AFMR and how you can purchase the report, read more HERE.