In 2025, U.S. franchised restaurant chains had organic sales growth of less than 0.5%, while non-franchised brands grew 4.8%.
Rising costs and increased demand for discounts have made it harder for franchises to maintain profitability, leading to slower sales and unit growth compared to company-run operations.
Franchises face compounded challenges, including franchisee financial strain and long-term decline, while company-run brands adapt faster and avoid royalty and ad-fund costs, making them more resilient in tough market conditions.
As costs soar, is the traditional restaurant franchise model becoming obsolete?
Will more giants like Pizza Hut shift away from franchising to survive?
How can franchisees protect profits when corporate demands system-wide value deals?
Beyond deep discounts, what is the new formula for restaurant value and profit?
Can AI and technology save franchised brands from their own inflexibility?