5 Employee Engagement Trends Franchising Should Watch in 2026

Key Takeaways:

• Employee engagement in franchising held nearly steady this year even as global engagement hit a multi-year low, but the gap between managers and senior leadership is widening.
• Compensation remains the single biggest driver of dissatisfaction, and staffing sustainability has emerged as a fast-growing new concern.
• Career growth issues are concentrated in specific roles rather than spread company-wide, which makes them easier to fix.

Franchise Business Review recently released its 2026 Franchising at WORK research. More than 9,500 employees responded, from corporate leadership to frontline staff at company-owned locations. The findings put franchising’s overall satisfaction score at 82—essentially steady compared to last year.

Set against Gallup’s most recent State of the Global Workplace report. It found global engagement at just 20%, the lowest level since 2020, with an estimated $10 trillion in lost productivity. Franchising is vastly outperforming the broader labor market.

While the data shows that franchising is holding steady, it also reveals exactly where the pressure is building. Here are the trends shaping employee engagement in franchising heading into 2026, and what people leaders can do about each one.

1. Team Collaboration Has Become a Top Driver of Engagement

When employees were asked directly what’s going well, one answer stood out. Team collaboration and relationships now account for 31% of positive responses, up from 22% last year. That makes it the single largest driver of satisfaction in this year’s survey. Ninety-one percent of employees say they enjoy the relationships they have with coworkers. Additionally, nine in 10 say they understand how their work supports broader company goals.

That indicates a shift in where engagement is actually coming from. Identifying which teams and locations generate the strongest collaboration, and figuring out what makes those dynamics work, is a relatively low-cost way to increase retention across the rest of the organization.

2. Compensation Is Still the Biggest Pain Point, and It’s Getting Worse

Fair compensation is the lowest-scoring question in this year’s survey at 66%. That’s down two points from last year, continuing a slide with no sign of leveling off. And it’s not just a general sense of being underpaid. Employees are citing specific market comparisons, a sign they’ve already started researching their options. 

This isn’t unique to franchising. PwC’s 2026 Employee Financial Wellness Survey found 57% of full-time employees now call finances their top life stressor. Franchisors have an opportunity here: treat compensation benchmarking as a standing priority, not something addressed reactively at exit interviews. Pairing transparency about pay structure with financial wellness benefits costs far less than raises but can meaningfully reduce stress in the meantime.

3. Staffing and Workload Sustainability Is This Year’s Newest Concern

Staffing pressure has quietly moved from a background issue to one of the most frequently cited concerns in this year’s data. It shows up almost as often in well-being feedback as in operational feedback. It’s most acute at the unit level, where employees describe doing the work of two or three people during peak periods. It’s also tightly linked to both burnout and turnover risk.

The solution has to match where the problem lives. A corporate-wide wellness initiative won’t solve a chronically understaffed location. Tracking workload and turnover data location by location, and giving unit-level managers real authority to flex staffing or approve overtime without routing every decision through corporate, are where franchisors have opportunities to put fixes in place.

4. Managers Deliver. Senior Leadership Communication Still Lags.

Manager metrics are the strongest part of this year’s survey across the board, and employee trust in direct managers is one of the most consistent positive signals in the data. Senior leadership communication tells a different story. It’s landed among the five lowest-rated questions in the survey for multiple years running. Employees describe a gap between how connected they feel to their manager versus to leadership above them.

While communication from senior leadership is lacking, many employees appreciate that senior leadership is approachable and values-driven. A regular communication cadence, paired with a visible feedback loop, would close that gap. Investing further in the manager layer remains one of the highest-return moves for franchisors.

5. Career Growth Concerns Are Concentrated, Not Company-Wide

Long-term career opportunity remains one of the lower-scoring areas in the survey, but it’s showing up differently than in past years. Rather than a broad, company-wide complaint, it’s concentrated in specific roles and teams. Employees there want a clear next step and better pay, treated as one request rather than two.

That’s actually a solvable problem. It means leaders can focus growth conversations on the roles where people feel stuck instead of building one large program for everyone. Where there genuinely isn’t a next rung to offer, being upfront about it and widening the definition of growth, through cross-training, stretch projects, or visible skill-building, tends to land better than staying quiet.

On the Radar: Gender Gap, DEI, and AI

Three additional trends are worth watching. Engagement gaps between men and women persist in compensation, communication, recognition, and growth. The pattern is nearly identical to last year, which suggests a structural issue rather than a one-year fluctuation.

DEI sentiment has held steady overall. Eighty-one percent of employees say their company values diversity. But public conversation around it has become quieter, echoing a broader national trend rather than a decline in program quality. 

And AI anxiety, while not yet a dominant theme in franchise employee feedback, is starting to surface. Curiosity about using AI tools more strategically showing up alongside skepticism about its broader impact.

The Road Ahead

This year’s data makes one thing clear: franchising’s five biggest engagement themes don’t operate in isolation. Communication, compensation, staffing, the manager-leadership gap, and career growth all connect. Understaffing drives burnout, burnout fuels compensation complaints, and weak communication from the top makes every other issue harder to solve. Organizations addressing these areas systematically are the ones posting the strongest satisfaction scores.

Franchise Business Review helps organizations across the industry measure exactly where they stand on these benchmarks. Let us show you how your organization compares. Request a free demo of our employee engagement research to see how you stack up.

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Franchising at WORK Report

Franchise Business Review surveyed more than 9,500 employees—from the C-suite to the frontlines—to uncover the truth about job satisfaction in franchising and identified the top franchise workplaces.