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Franchise Update Media released its 2026 Annual Franchise Development Report.
We have been researching franchise lead generation and franchise recruitment processes for more than a decade. An annual in-depth online survey queries franchise development professionals about a variety of issues related to their lead generation and recruitment strategies. The results are presented each year in the Annual Franchise Development Report (AFDR).
The AFDR report is a valuable resource that can provide crucial insights into franchise development, lead generation, and recruitment best practices. It’s the kind of information that can help brands assess what they are doing right and what needs improvement.
The project seeks to identify what’s new and innovative in franchise lead generation, recognize the methods and approaches yielding the best results, and gain insights into franchisors’ perspectives on current and future business performance.
Survey participants were franchisors who completed an in-depth questionnaire online. Responses were aggregated and analyzed to produce a detailed view into the recruitment and development practices, budgets, spending allocations, and strategies of a wide cross-section of franchisors. The data, along with accompanying commentary and analysis, provided the basis for the 2026 AFDR.
The in-depth report draws on insights from dozens of organizations that are actively expanding their franchise systems. Carefully researched and data-rich, it highlights the latest trends and sheds light on how brands are generating leads and closing franchise sales today. The AFDR reflects input from companies representing tens of thousands of franchise units across dozens of industry categories.
Franchise Update Media creates this report annually and shares its findings with franchise development teams to give them an edge in their lead generation and recruitment efforts.
Earlier this year, Franchise Update looked at how franchises are using AI in recruitment and in the fran dev process. The latest AFDR also asked respondents how they are using artificial intelligence in other areas, such as chatbots, lead scoring systems, and personalized marketing campaigns.
We asked respondents if they are currently using or planning on implementing AI chatbots on their franchise opportunity websites to qualify leads in real time. The report analyzed the responses across several categories, beginning with the general business industry. Most groups are not using AI chatbots on their websites. However, the main exception is with retail food franchises, where all responded that they are using the technology. Thirty-three percent of retail (non-food) franchises are also using AI chatbots on their franchise websites.
A greater variety of responses came when looking at responses by investment level. The highest percentage of franchises using AI chatbots came in the middle level of investment. That included franchises with investment levels of $101,000 to $250,000 (54 percent), $250,001 to $500,000 (47 percent), and $50,001 to $100,000 (40 percent). None of the franchises with the lowest investment levels use AI chatbots, and the majority of the two highest investment levels also do not.
Responses to the question about chatbots were evenly mixed when viewing by number of franchise units. Four different categories ranged between 44 and 53 percent affirmative in using chatbots. Two of the groups with the lowest percentage of responses regarding the use of chatbots were franchises with 251 to 500 units (27 percent) and 501 to 1,000 units (17 percent).
We also asked franchise executives if they used an AI-powered lead-scoring system to gauge a candidate’s likelihood to close. Every retail food franchise surveyed said it uses such a system. In every other business category, 17 percent or fewer respondents said they do not. When looking at responses by investment level, at least 90 percent of four of the five groups also said they do not use a lead scoring system. The exception was with franchises with an investment level of $101,001 to $250,000, where 31 percent said they use such a system.
Most franchises, regardless of the number of units, did not use lead scoring systems. When looking at franchise size, no group responded with more than 17 percent that they used a lead-scoring system to gauge a candidate’s likelihood to close.
Finally, we asked survey respondents if they are using AI tools to personalize email marketing campaigns or to follow up with franchise candidates. When looking at business category, generally, about one-third of most groups use personalized email to respond to candidates. Once again, the exception was retail food franchises, with all respondents saying they use that system to follow up with franchise prospects.
The report showed similar results when analyzing responses by franchise investment level, with approximately one-third of most groups using AI to personalize messages to communicate with candidates. None of the respondents from the smallest investment group ($25,000 to $50,000) used that type of system.
Responses were more varied when viewed by number of franchise units. Sixty percent of franchises with fewer than 25 locations used AI tools to personalize messages, while half of two groups, 101 to 250 units and 2,501 to 5,000 units, used the technology.
For more information about the 2026 AFDR and how you can purchase the report, please scan the QR code below or click afdr.franchiseupdate.com.