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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.
Getting leads for qualified candidates and turning them into a sale comes at a considerable expense for franchises. In the latest AFDR, Franchise Update asked respondents if they track each of these two categories. We also wanted to know their average cost per lead and per sale. Results for each varied across business sector, investment level, and franchise size, but they provided interesting takeaways about how franchisors approach sales and leads in the development process.
Starting with the general business sector, franchises that track costs per lead varied by industry. None of the retail food franchises said they track costs per lead, but 71 percent of service (non-brick-and-mortar) and 70 percent of service (brick-and-mortar) franchises do track those numbers. We also asked each respondent about their cost per lead. Service (brick-and-mortar) was the highest, with $608 per lead, followed by food franchises at $312.
The report analyzed responses to those questions based on investment levels. None of the franchises at the lowest level ($25,000 to $50,000) tracked costs per lead, but 83 percent of franchises with investment levels between $500,0001 and $1,000,000 said they track costs per lead numbers
Not surprisingly, the highest cost per lead ($757) was with the group with the highest investment level (more than $1,000,000). The next highest cost per lead was $142 dollars, with franchises with investment levels of $250,001 to $500,000.
Responses were also analyzed based on unit size. At least two-thirds of four different-sized groups said they track costs per lead. This was led by franchises with 501 to 1,000 units (83 percent) and franchises with 101 to 250 units.
Franchises with less than 25 units had the highest cost per lead ($802), followed by 501 to 1,000 units ($657) and 26 to 100 ($320).
Franchise Update also asked survey respondents about their costs per sale. Results were mixed based on general business sector when we asked if they tracked costs per sale. No retail food franchises tracked those numbers, but 65 percent of service (non-brick-and-mortar) franchises said they did.
Food franchises had the highest cost per sale ($25,145), followed by brick-and-mortar service franchises ($15,721), non-brick-and-mortar franchises ($9,276), and non-food retail franchises ($6,700).
Franchises that tracked cost per sale also varied based on investment level. No franchises with the lowest investment level ($25,000 to $50,000) tracked cost per sale, but two other groups did in large numbers: $500,001 to $1,000,000 (75 percent) and $100,001 to $250,000 (69 percent).
The average cost per sale was nearly the same for two groups: $23,777 for franchises with investment levels of more than $1 million, and $23,547 for those with investment levels of $250,001 to $500,000. Franchises with investment levels of $500,001 to $1,000,000 had an average cost per lead of $10,573.
Finally, the report looked at cost per sale based on unit size. The two largest groups in the survey, franchises with 501 to 1,000 units and those with 1,001 to 2,500 locations, both tracked costs per sale at a rate of greater than 70 percent. That reflected an overall trend of the larger franchises tracking costs per sale at a greater rate than smaller franchises.
Franchises with 26 to 100 units had an average cost per sale of $35,388, the greatest amount by a wide margin. That was followed by franchises with fewer than 25 units ($14,795) and those with 501 to 1,000 locations ($11,000).
For more information about the 2026 AFDR and how you can purchase the report, please scan the QR code below or click HERE.