IFA President and CEO Urges Franchisors to Focus on Unit-Level Economics and Sustainable Growth
- At CREATE conference, IFA President and CEO Matt Haller shared an optimistic outlook on franchise growth despite economic challenges.
- Franchising’s output has grown at more than double the pace of the U.S. gross domestic product during the past five years.
- He noted sharp increases in multi-unit and multi-brand ownership, underscoring growth opportunities for franchise investors.
- Haller predicts margins will decline through 2026 and advises franchisors to be conservative with expansion and spending.
Matt Haller, president and CEO of the International Franchise Association (IFA), assured restaurateurs last week that franchising has held steady despite some weaknesses in the U.S. economy. Haller delivered that assessment of franchising’s strength — along with cautions and advice — at CREATE 2025, an annual gathering of growth-minded restaurateurs held Oct. 15-17 in Nashville.
The economy has continued to suffer from inflation, has seen only a slight decline in the Federal Reserve’s key interest rate, and has posted discouraging job-creation numbers. Inflation has put a damper on some areas of consumer spending, with restaurants especially hard-hit. Haller said restaurants comprise slightly less than half of all franchises, Nation’s Restaurant News (NRN) reported Friday.
In spite of the less-than-ideal economic conditions, Haller stated that franchising has posted a 7.3% growth in output (total dollar value of franchises’ goods and services) during the last five years, per the NRN article. He contrasted that with the U.S. gross domestic product, saying it had increased just 3.6% during that period.
Franchise Growth
Franchising will add about 20,000 new units across all of its industries this year, with fastest growth in Arizona, Colorado, Florida, Georgia, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia, according to the IFA’s 2025 Economic Outlook report. Haller said franchising expands more easily in those states partly because of fewer regulations on franchise development as well as population increases. His presentation noted that 30% of all franchises are in the Southeast.
Haller shared eye-opening statistics regarding the rise in multi-unit ownership since 2010. For instance: Those with two to five units increased by more than 20%, from 28,862 in 2010 to 34,853 in 2024. Those with 11 to 25 units increased more than 31%, totaling 1,630 owners in 2010 and reaching 2,149 last year. And there were 162 owners with 50-plus units in 2010, but by 2024, their ranks had hit 472, a leap exceeding 191%.
Multi-unit, multi-brand ownership (MUMBO) is on the upswing, too, now eclipsing 6,000 franchisees. A key factor: By scaling via both brands and units, franchisees can raise their profit potential, NRN pointed out in its article. Haller sees MUMBO investing as an important growth strategy for restaurant franchisors and franchisees to explore.
Margins, Concerns and Advice
He predicted that margins for all franchisors will decline this year and next year, which probably will lead to reduced support to franchisees, NRN reported. Margins were 20% in 2021, only 12% in 2023, and 15% last year.
Haller informed the gathering that although the government shutdown causes the loss of $25 million in loan financing every day, franchisors’ two biggest concerns are persistent inflation and weak unit sales. He advised them to build reserves, to spend cautiously, and to not add franchisees too aggressively, according to NRN.
Haller also encouraged franchisors to focus on increasing unit-level economics for their owners. “Franchisors should not be making money on franchise sales,” NRN quoted Haller as saying. “They should be making money because their franchisees are making money. That is the foundation of every successful franchise system.”
Closing Remarks
In wrapping up his presentation, Haller covered two current areas of IFA activism:
- The American Franchise Act, which has been introduced in Congress. The IFA supports passage of the act, which would codify the joint employer standard that took effect during the first Trump administration.
- The organization’s Franchise Means Local initiative. IFA has invested $5 million in this online campaign to increase the public’s awareness of local ownership of franchise businesses.
About CREATE Conferences
NRN-sponsored CREATE events aim to help restaurateurs prosper by informing them about business and economic trends, technology, people, menus, and customer experience. In addition, CREATE conferences provide opportunities to network and develop innovative ideas in food service. A CREATE event for emerging restaurateurs will be held in July 2026 at Terranea Resort in Rancho Palos Verdes, Calif.
