Marketing Byte: Major Events That Have Impacted Revenue in the Past Year

Franchise Update Media’s 2025 Annual Franchise Marketing Leadership Report highlights key trends shaping the industry. 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 has been 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 its 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.

Predicting events that could impact franchise revenue

When Franchise Update surveys franchisors for the annual AFMR, we collect information about the trends they have seen in franchise marketing over the past year, along with some predictions of what may come. Most questions are related to franchise operations, although we did ask people about any events that may impact revenue over the upcoming year, and how they would potentially deal with the revenue instability.

One year after asking franchisors these questions, their answers seem extremely relevant given the challenges many businesses are facing because of inflation, tariffs, and rising gas prices. Although few could have predicted the war in Iran a year ago, many respondents cited external factors such as economic slowdown, rising costs, and consumer confidence questions as causes for revenue concern.

When asking franchise executives based on industry sector, the biggest area of concern was inflation and rising costs. At least 70 percent of respondents in all five sectors said that it could impact their revenue over the next year, including 100 percent of those in the food and retail (non-food) spaces. Global economic slowdown and uncertainty were another popular answer, with four industry sectors responding with 75 percent or more.

The follow-up to that question is how franchises planned to handle any potential challenges to revenue stability. On average, the most popular response may have been to control costs and optimize cash-flow management. That was followed closely by strengthening customer relationships and customer loyalty programs. Many franchisors also said they would regularly review budgets and cash flow, including all those respondents in the food industry.

We also analyzed the responses to those two questions from franchisors based on unit size. The biggest takeaway was that many of the groups, regardless of size, responded by saying with a 100 percent rate to about half of the events or trends listed that could impact their revenues. The primary areas of consistent concern were with inflation and rising costs, as well as global economic slowdown and uncertainty. The most unique response was about technological and cybersecurity risks. One hundred percent of franchises with 1,001 to 2,500 units listed that as a concern, but no other group cited that as a potential challenge.

The most popular response overall to how franchises planned to mitigate potential revenue challenges came in controlling costs and optimizing cash flow management. Four groups indicated this with at least 70 percent of their responses, including 100 percent of franchises with 1,001 to 2,500 units, and those that have yet to open a location. Another repeated response was to strengthen customer relationships and loyalty programs, which included 100 percent of franchises between 251 and 500 units.

For more information about the 2025 AFMR and how you can purchase the report, read more HERE.