Franchise Operators Can Navigate Challenges and Capitalize on Opportunities in 2024

With a new year on the horizon, multi-unit franchisees will likely face headwinds in multiple areas, such as increased expenses, growing government regulation, and continued high interest rates. But the news is not all doom and gloom.

Experienced multi-unit operators have learned that focusing on the fundamentals, like cash flow and customer service, can help them weather just about any storm. Approaching challenges strategically and with the right level of knowledge can have a big impact on the success of a business. Franchise operators will find challenges in 2024 as well as opportunities if they know where to look.

For the fourth in our series, we asked two more members of the Multi-Unit Franchising Conference’s Board of Directors how they plan to approach business in 2024. Jesse Keyser operates multiple Sport Clips, Oxi Fresh Carpet Cleaning, Ideal Image, and Med Spa locations throughout five states. Grant Simon is co-founder and CEO of LSGF Management where he oversees more than 150 T-Mobile, Great Clips, and Smoothie King locations.

Keyser and Simon talked about where they see things in the new year.

What is your vision for the economy, the franchise marketplace, and your own business in 2024? 

Keyser: It’s going to slow down in the lower and middle levels of disposable income. Watch higher income take off.

Simon: The economy will most likely be difficult for business through at least the first half of 2024 and then start easing. Increased government compliance and regulation as well as a higher interest rate environment will push more money toward franchises. I expect to grow my business in 2024.

In what ways do you think this will impact multi-unit franchisees and their business operations in the coming year? 

Keyser: Until they figure out how to build the locations cheaper, you will see more acquisitions than new development of locations.

Simon: I expect labor and rents to continue moving up while price increases will taper off, putting pressure on margins. Growth could be impeded by higher interest rates and accelerating construction costs.

How can multi-unit franchisees prepare their businesses for 2024?

Keyser: Save cash so, when you go to finance, you are not financing as much and can have good cash flow numbers.

Simon: Look toward efficiencies in business rather than relying on future price increases like the last couple of years. Have a robust labor plan. Plan for capital costs factoring in higher interest and construction costs.