What is the biggest trend you’re watching in 2025, and how are you approaching it?
"Recent uncertainty in global trade and tariff announcements are beginning to impact franchise systems operating across borders. While the extent to which tariffs will impact cross-border supply chains and sourcing is yet to be determined, almost every franchisor that I work with is watching it carefully. They’re attempting to identify key risks in their supply chains and looking for alternate suppliers, or other ways to manage tariff and currency risks."
—Clark Harrop, Dale & Lessmann
"As competition for market share at the unit level continues to ramp up, I am watching the creative ways franchisors and franchisees are working together to position brands for success at that level. This not only includes a greater focus on unit-level economics, but also novel ways franchisors are assisting and encouraging franchisees to invest in their units through updates to the unit along with a focus on local marketing efforts."
—Joseph Fittante, Larkin Hoffman
Michael Rosenthal, Clark Hill
"The continued growth of private equity firms in acquiring both franchisors and franchisees. I’m approaching it one transaction and one situation at a time. Most PE firms are well intended and bring value to the brands they own or manage. However, a small handful are hellbent on simply selling as many units as they can, without regard for quality or the success of their franchisees, and this is obviously very bad for the franchise industry."
—Michael Rosenthal, Clark Hill
"The biggest trend continuing in 2025 is the use of AI. Our clients are using AI in research, development, marketing, training and sales. As attorneys, we continue to emphasize that our client’s use of AI is an opportunity for them to reassess and strengthen their risk management procedures."
—Nicole Micklich, Urso, Liguori & Micklich
"The biggest trend is how the threat, or fact, of tariffs will impact the business market in general. Every business is assessing the impact, and franchising is generally no different. Franchisors we work with are looking for guidance on how to assess and address their potential impacts."
—Allan D.J. Dick, Sotos
"I’m certainly watching how the U.S.-Canada trade dispute will play out and its effect on cross-border franchising, including cross-border supply issues and delays with construction and development."
—Debi Sutin, Gowling WLG Canada
"I continue to watch for franchisors to utilize AI in sales, management and compliance. Mapping and CRM platforms are becoming more integrated, and new tools pop up every day."
—Derek Colvin, Waldrop & Colvin
Cassandra Da Re, Dale & Lessmann
"In Canada, bankruptcy and creditor protection proceedings swept the restaurant industry in 2024 at the franchisor and franchisee level. A perfect storm of increased food costs, high interest rates and higher obstacles in lending, together with overextended lease obligations resulted in well-known chains taking drastic measures.
Coming into 2025, I expect more creative and aggressive lease negotiations that will include a fixed termination payment in the event of default or the ability to terminate early so that tenants and indemnifiers can crystallize their liability."
—Cassandra Da Re, Dale & Lessmann
"Private equity taking over franchised businesses and imposing increasingly onerous terms in franchise agreements."
—Elliot Ginsburg, Garner, Ginsburg & Johnsen
"Performance matters. Unit-level economics, system changes and brand-level performance will matter more in 2025 than ever before, especially with emerging franchisors. Yes, franchise development is important, but in order for any franchise system to be successful and sustainable for all stakeholders, franchise leaders must have an obsession with unit-level economics and franchisees delivering on the brand promise."
—Brian Schnell, Faegre Drinker
"The biggest trend I am watching in 2025 will come from the new administration and the direction of the FTC. The removal of Lina Kahn and the appointment of Andrew Ferguson will certainly change the regulatory landscape."
—Deborah Coldwell, Haynes and Boone
"One of the biggest trends I am seeing is the ongoing recognition by franchisees that they need to organize with their fellow franchisees. The number of franchisee associations coming into existence continues to increase, and I see no sign of it slowing down."
—Mark Dady, Dady & Gardner
