New study on the impact of labor shortages on franchising

A first-of-its-kind annual report published by the International Franchise Association (IFA) and FRANdata highlights the impact of the labor shortage on franchising. The results were selected from responses from more than 200 franchise executives representing 197 brands and approximately 90,000 units. The results clearly show that the availability of skilled labor is the number one challenge facing small businesses and franchisors are helping their franchisees deal with the shortage.

“Four out of five franchise systems have experienced labor shortages in recent months,” said FRANdata CEO Darrell Johnson. “While ‘workforce quality’ is the most critical issue facing franchise businesses today, franchising is resilient and strong, as demonstrated by efforts to adapt to current challenges. in labor during the economic recovery. One of the franchise’s greatest strengths is its emphasis on in-depth training programs that not only encompass technical skills, but career-enhancing fundamental skills as well. »

Key findings from the study include:

  • “Labour quality” followed by “labour cost” are the biggest challenges facing small franchise businesses today.
  • Almost all respondents (87.6%) said franchisees have difficulty finding skilled and unskilled workers.
  • 70% of franchise brands have experienced limited growth due to labor issues.
  • The average number of employees per franchised unit has decreased over the past six months.
  • 65% said employee salaries had increased in the past six months and 66% expect salary increases in the next six months.
  • The majority of brands have been able to maintain or increase their store opening or production hours over the past six months.
  • Most franchisors provide assistance to their owners with recruitment and retention.

Full results are available here.

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