At the end of 2025 we reflected on what kept franchisors awake last year; we now turn our thoughts to what we might expect in 2026.
Key challenges are unlikely to change
Frustratingly, most challenges are recurring themes and continue to compromise the growth and performance of so many franchise systems. The staffing of units, recruitment of new franchisees, access to finance, financial performance of existing franchisees (and engagement levels) are all expected to be prominent again in 2026.
The real issue is what will franchise systems do to reduce the impact of these challenges this year and beyond? Programs to better understand how employees are attracted and retained, franchisee engagement surveys, franchisee focus groups, external reviews and independent ratings can all play an important role in better outcomes.
AI growth and implementation
The velocity of change in this area has been enormous over recent years and 2026 will be no different.
Judicious investment in this area (time and advice) will be a key focus for many franchise systems as they look to unlock efficiencies, keep up with competitors and mitigate risks around data and privacy issues.
Regulatory environment
Australian franchisors will breathe a sigh of relief that no code reviews or directly related Parliamentary Enquiries are scheduled for 2026. However, the constant review of documentation and processes will continue as they cope with the latest round of changes to the Franchising Code of Conduct and other administrative burdens on small business.
Small business trading environment
Quarterly surveys of franchisors continue to reflect optimism around trading performance more so than trading conditions. The entrepreneurial spirit, optimism and passion of franchisors endures despite renewed inflationary concerns, deferred interest rate cuts and softer consumer spending.
It has been encouraging to note the views of leading economists observing the improving spending capacity of households and the resilience of household budgets. Moreover, their appears to be a degree of optimism around broader consumer spending levels over the next year which will be well received by small business.
The franchise business model
More than 80,000 small businesses in Australia operate under the franchise business model. For many decades prospective business owners have been attracted to the opportunities and lower risk profiles they see in established or emerging franchise concepts.
The franchise sector also remains very attractive to:
- lenders seeking more loans with lower risks,
- landlords seeking quality tenants,
- communities benefiting from local franchise business support,
- first time employees and,
- a range of suppliers providing an array of products and services.
In 2025, a renewed and invigorated Franchise Council of Australia was very active, particularly in the areas of representation and member engagement. Importantly, those efforts laid a very strong platform for an even better 2026 with the Franchise Industry Awards and the National Franchise Convention again shaping as highlights on the franchise calendar.
We see 2026 shaping up as a strong year for the franchise sector and quality franchise systems.
