5 Franchise Workforce Trends: What They Mean for Franchise Employers

Key Takeaways:

• Employee engagement levels in franchising remain steady, but compensation and well-being are immediate concerns for franchisors
• Employees appreciate leadership’s hands-on involvement, support, and culture, but still want clearer communication and measures of performance.
• Franchisors can gain quick wins by focusing on recognition programs, professional development, and transparent communication strategies.
• Here are the workforce trends franchisors should consider in their hiring and retention strategic planning.

The workforce landscape is rapidly evolving, and for the franchise industry, staying ahead of employment trends is essential for attracting and retaining top talent. 

Franchise Business Review released the findings of our annual Franchising at WORK employee engagement research in August 2025. Over 11,000 employees shared their opinions and feedback. More than 2,200 corporate HQ employees and over 9,000 unit-level employees took part. 

As in past years, employee engagement remains a significant strength for the franchise sector, with 83% of employees surveyed reporting they find their work rewarding. In contrast, Gallup’s most recent employee engagement study reports general employee engagement in the U.S. at 31%. Additionally, three out of four franchise employees would recommend their company to friends—a clear indicator of high workplace satisfaction.

The research shows that managers play a pivotal role in driving engagement. Employees who feel supported by their direct manager are not only more likely to stay long-term but are also more likely to refer others to their organization. This underscores the importance of equipping managers with the tools and training to foster positive relationships with their teams.

Based on the survey findings, here are some of the other key franchise workforce trends expected to shape franchising well into 2026—and strategies to address them.

Franchise Workforce Trends to Watch

1. There’s a Growing Disconnect When It Comes to Compensation

Dissatisfaction with compensation is up 25% year-over-year, despite wage increases upwards of 7%. Wages are at historic highs, yet one-third of employees surveyed say they’re under-compensated for their position. Compensation is consistently rated low across the board, but it rates lowest among younger workers and women, especially at the unit-level. 

Inflation and rising living costs are driving this perception, creating challenges for franchises in retaining talent. Franchisors can mitigate these concerns by being transparent about compensation strategies and offering competitive benefits. Regularly benchmarking salaries against industry standards and providing cost-of-living adjustments can also help bridge the gap.

Franchise Business Review’s Franchise Industry Compensation Report includes salary comparisons for 40 distinct franchise roles representing 6,100 specific positions, as well as detailed information on workforce trends and the hiring outlook for franchising.

Get the Report Now

2. Employee Well-Being Is a Growing Concern

Employee well-being has been a hot topic over the past few years, especially among younger workers reporting high levels of anxiety. A recent study by PwC shows that one in 10 workers is actively considering leaving work, with mental health cited as the number one reason. 

Fortunately, overall well-being among franchise employees is generally high at 80% with just 3% of employees reporting poor well-being. However, there were several areas in this year’s survey that showed a considerable drop in well-being. The primary drivers of poor well-being among those employees are non-work-related anxiety and financial stress. Less than half (45%) of survey respondents report positive financial well-being, down 2% from 2024.

Implementing employee well-being programs and equipping managers with the skills to recognize employees who are struggling and coach with compassion can relieve stress and can create a more supportive environment. Franchise Business Review offers a free resource, The Franchisor’s Guide to Employee Wellness, which offers guidance for implementing wellness strategies to improve hiring and retention.

The FBR Summit offers multiple sessions on employee satisfaction and wellness, as well as preconference workshops focused on franchise people operations. See the full agenda and register now to join FBR in Austin, TX.

3. Employees Are Positive About Leadership but Yet…

Many employees express genuine appreciation for leadership’s professionalism, accessibility, and supportive culture, but consistently request clearer, more frequent, and more comprehensive communication. Communication with managers is rated highly, yet only 77% of employees feel leadership communicates clearly. 

Employees are seeking more strategic vision around the direction of the company and how their work contributes to the bigger picture. While 88% of employees feel that the work they do supports the company’s goals, there’s a disconnect: Nearly a quarter of employees say their goals and measures of performance are unclear.

4. Room for Improvement in Employee Recognition and Growth 

Even in high-performing environments, there’s room for growth. Employees identified several areas where franchise organizations can step up:

• Recognition: More acknowledgment of individual achievements can boost morale.
• Professional Development: Workers seek more opportunities to learn and grow. One-third of employees indicated they did not see a long-term career opportunity at their current company.
• Defined Goals: As mentioned earlier, employees are seeking clearer alignment and guidance from leadership on goals and measures for performance.

These issues were among the lowest-scoring in the Franchising at WORK survey and have declined year-over-year. However, they represent quick wins for franchise companies, as improvements in these areas require minimal investment. A strong focus on recognition programs, professional development, and transparent communication strategies can significantly enhance employee satisfaction.

5. Companies Are Experiencing a Diversity Dilemma

There is overwhelming evidence that diverse teams and companies that promote inclusive cultures perform at a higher level. However, some companies are rolling back Diversity, Equity, and Inclusion (DEI) programs in response to political and legal pressure, while others are renaming programs and quietly continuing. Then again,  some brands are doubling down on diversity initiatives, citing culture or commercial return on investment.

The Franchising at WORK survey includes seven questions to measure employee sentiment around DEI efforts. Overall, 87% of employees surveyed say their company values diversity. Additionally, 90% of employees feel their co-workers demonstrate a commitment to creating an inclusive work environment, and 84% feel senior management understands that diversity is important to the company’s success.

Regardless of your organization’s approach to DEI, these questions provide an opportunity to strategically measure impact, and move forward with intention in order to attract and retain employees.

The Road Ahead

The franchise workforce is evolving, and franchisors must adapt to meet employee expectations. The easiest and most impactful way to demonstrate your organization’s commitment is to survey employees annually, at minimum. Not only does a survey itself show employees that company leaders care what they have to say, the resulting employee satisfaction data is a powerful tool to identify clear, actionable areas that you can address to improve or enhance your recruitment and retention strategies. 

The future of franchising lies in its people—embrace these trends, invest in your people, and position your franchise for the future.

Franchise Business Reviews helps hundreds of franchise organizations measure and improve employee satisfaction. Find out how your organization stacks up! Request a free 10-minute demo to see how you can get a confidential assessment of your company culture and employee engagement.

Related Content

Franchising at WORK Report

Franchise Business Review surveyed more than 11,000 employees—from the C-suite to the frontlines—to uncover the truth about job satisfaction in franchising and identified the top franchise workplaces.