2023 Annual Franchise Development Report (AFDR), Part 1: Recruitment Budgets
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2023 Annual Franchise Development Report (AFDR), Part 1: Recruitment Budgets

2023 Annual Franchise Development Report (AFDR), Part 1: Recruitment Budgets

Highlights from the 2023 Annual Franchise Development Report (AFDR) were unveiled at the Franchise Leadership & Development Conference (FLDC) in October.

Participants consisted of franchisors that completed an in-depth questionnaire online. Responses were aggregated and analyzed to produce a detailed look into the recruitment and development practices, budgets, spending allocations, and strategies of a wide cross-section of franchisors. The data and accompanying commentary and analysis provided the basis for the 2023 AFDR.

A total of 101 franchisors participated, representing 21,802 franchised units and 2,044 company-owned units. Despite predictions of a recessionary year ahead, participants plan to open a total of 1,725 new franchised units in 2023.

Highlights from the report were presented in an FLDC general session by Franchise Update Media EVP and Chief Content Officer Diane Phibbs and Wild Birds Unlimited Chief Development Officer Paul Pickett. Below is the first in a series of selected highlights. All conference attendees received a complimentary copy of the 2023 AFDR.

Overall, 2023’s planned recruitment budgets fell YOY. It’s important to note, however, that 2022 was an outlier year, with the highest median and average recruitment budgets since 2015, as franchisors recharged their recruitment budgets after trimming them severely in 2021 in Year 2 of Covid.

For reference, those 2022 recruitment budgets clocked in at the highest level ever in the report’s history, averaging $261,543 with a median of $200,000. That compares with this year’s average of $225,240 and median of $143,000.

Looking back a little further, this year’s numbers exceeded 2021’s Covid-depressed average of $174,770 and median of $120,000, and was fairly close to 2020’s average of $215,173 and median of $150,000—pre-Covid planning numbers that represented a 7-year high at the time. For further comparison, those figures in 2019 were $186,818 (average) and $127,000 (median).

Next time: 2022 Spend: Budget vs. Effectiveness

Published: January 2nd, 2023

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