As the pace of technological innovation accelerates, franchising has become a fascinating proving ground for AI's transformative power. Over the past two years, I've watched this industry embrace AI tools with a sense of curiosity, eagerness and excitement. But would it stand up against the needs of a franchise brand? Was this just another technological fad? After preparing this year's report, its clear, A.I. is not only here to stay — if you're not already using it, you're behind.

Having spent several years in the franchise industry, I wondered if it would truly catch on. Franchising after all, has always been unique in it need to support not only the corporate business but the individual franchisees that are so vital to its success. Would A.I. survive the battleground that is franchising?

It was clear to me that 2024 was the year of adoption. AI had made its impact. The possibilities seemed limitless—if not a bit unclear at times. However, one thing that I felt was like was missing from all the A.I. discussions was — 'direction.' We've all been in meetings over the last 12-18 months that end with "OK, so what do I do with it?" To me, it felt a bit like having a sports car but not knowing where to drive it, or a garage full of new power tools but not having a project to work on. In 2024, we explored, experimented, tinkered, and tested (too) many A.I. solutions, hoping to find the ones that fit our system, gained adoption, or made our lives just a bit easier.

This new year will be one of purpose. We will move beyond exploration and experimentation to applying what we've learned with clarity and intention. It’s time to take deliberate steps toward success—for both our brands and our franchisees—by aligning the power of AI with the unique needs of franchising.

This year’s report highlights that, for franchise leaders, AI offers a unique opportunity to streamline operations, support franchisees more effectively, and connect with customers in smarter, more meaningful ways. More people are making business decisions, driving investments, and even generating revenue with AI. The potential is immense, but the key lies in using it with focus and purpose.

The stories, data, and insights in this report showcase not only what’s working but also what’s next. As you read, I encourage you to think critically about how AI can elevate your brand. Whether it’s finding efficiencies, personalizing customer experiences, or reimagining franchisee support, the opportunities are vast—but action is critical. Let this report serve as both inspiration and a roadmap to help guide your franchise’s AI journey to the next level.

The 2024 AI in Franchising Report dives into how artificial intelligence is transforming the franchising landscape, offering actionable insights and highlighting practical applications. Building on the momentum of the 2023 survey, this year's findings unveil an industry embracing AI not as a novelty but as a cornerstone of growth, innovation, and customer engagement. This report captures the stories and strategies of over 60 leaders across 16 different industries who are leveraging AI to streamline operations, unlock new opportunities, and set their brands apart.

Whether you're exploring AI for the first time or looking to deepen its impact at your brand, these insights are designed to inspire, inform, and empower your next move.

Our survey gathered insights from over 60 franchise brands across 16 diverse industries and roles, providing a comprehensive view of AI adoption and usage patterns in the franchising sector. Here's a breakdown of the key statistics:

The survey encompassed a wide variety of franchise industries, with Food & Beverage leading the pack:

The landscape of AI tools in franchising has evolved significantly since 2023. While ChatGPT remains popular, there's a clear trend towards diversification:

The survey highlights the diverse applications of AI across franchise operations.

Compared to 2023, AI-driven lead generation has surged from 40% to 63.5%, making it the top use case in 2024. Similarly, automating customer communication grew from 45% to 61.9%, while personalized customer service rose from 50% to 57.1%, emphasizing the growing focus on customer interaction.

AI technologies are transforming both corporate operations and franchisee support by streamlining processes and enhancing efficiency. This section explores the extent of AI usage in these areas and provides insights into how AI is being leveraged to enhance operations and efficiency across franchise systems.

The survey indicates a significant increase in AI adoption for franchisee support:

As AI continues to reshape the franchise landscape, understanding which departments are leading the charge and how it's impacting productivity is crucial. Our survey provides valuable insights into these areas, revealing the current state of AI adoption and its effects on organizational efficiency.

The survey results show a clear distribution of AI ownership across various departments within franchise brands:

The survey shows where AI interest primarily originates within franchise brands:

Compared to 2023, there's been a significant increase in interest from Franchisees and Support Staff, reflecting a more decentralized approach to AI adoption.

The survey reveals a significant positive impact of AI tools on productivity:

An overwhelming 93.7% of respondents experienced productivity improvements due to AI tools. These gains stem from the ability to automate repetitive tasks, enhance data processing, and streamline workflows.

Businesses are accelerating their AI investments to enhance efficiency, drive innovation, and stay competitive. This section highlights how respondents are prioritizing AI adoption, focusing on resource allocation and strategic growth opportunities to harness its full potential.

The survey reveals that 61.9% of respondents are using AI to make business-level decisions that impact revenue, while 38.1% are not. Respondents provided detailed examples of how AI supports revenue-impacting decisions:

On a scale of 1-5, with 5 being extremely important for future success, respondents rated the importance of AI as follows:

The majority of respondents (52.4%) are spending between $10,000 and $100,000 annually on AI tools or technologies. Interestingly, 14.3% report significant investments of $100,000 to $500,000, signaling commitment to larger-scale AI initiatives. Smaller investments, including those less than $5,000 (17.5%) or $5,000 to $10,000 (15.9%), suggest early-stage adoption or use of more affordable tools.

The majority of respondents (80.9%) expect their AI investment to increase over the next 12 months, with 49.2% anticipating moderate growth and 31.7% predicting significant increases. Only 19.0% expect their spending to stay the same, and no respondents indicated plans to decrease their investment. This strong upward trend highlights the growing confidence in AI's value and its expanding role in business strategies.

Responses reveal a shift in mindset, with brands recognizing AI as essential for efficiency and growth. Many see AI as a tool to innovate and remain competitive, while others emphasize careful, ROI-focused growth strategies. No respondents plan to decrease investment, underscoring AI's increasing importance across industries.

A combined 84.2% have invested in either a full or part time, AI management role.

This significant investment in AI oversight represents a marked shift from 2023, indicating a growing recognition of AI's strategic importance in franchise operations.

As franchises navigate the AI landscape, the challenges of implementation are balanced by the promise of transformative benefits. The focus on data privacy, training, and ethical considerations demonstrates a maturing approach to AI adoption. With measurable improvements already evident and substantial investments in AI management, the franchise industry is poised for continued innovation and growth driven by artificial intelligence.

The survey indicates a strong inclination towards increased AI adoption in the future:

With 92.1% of respondents indicating they are either "very likely" or "somewhat likely" to use AI tools more frequently in the future, there's a clear signal of growing confidence in AI's ability to deliver value across various functions.

As AI continues to reshape the franchise landscape, brands are grappling with both significant challenges and exciting opportunities. The 2024 AI in Franchising Report reveals a complex picture of hurdles to overcome and potential areas for transformation.

Other notable challenges include lack of consistency across franchise operations (38.1%), resistance from franchisees or staff (34.9%), and the overwhelming number of AI tools to choose from (28.6%).

As AI continues to integrate into franchise operations, leaders are raising important questions about its potential, challenges, and long-term impact. This year’s survey revealed not only the practical ways franchises are leveraging AI but also the critical issues they are grappling with as they seek to harness its transformative power. From safeguarding data to building autonomous systems, their inquiries reflect a deep commitment to shaping AI’s future in franchising.

One of the most pressing themes among respondents was the need to balance data utility with privacy and security. As AI relies on vast datasets to generate insights and optimize operations, leaders are grappling with how to protect sensitive information while maximizing its value. Questions like this reflect a growing consensus that trust and compliance are prerequisites for AI adoption in franchising. Respondents emphasized the importance of ensuring robust safeguards, especially as regulations around data privacy become more stringent.

Franchise leaders operate in a variety of sectors—healthcare, retail, food and beverage, and more—and the call for AI solutions that address their unique challenges is loud and clear. Respondents highlighted the need for AI models that can adapt to specific workflows, regulatory requirements, and customer demographics. This aligns with broader survey results showing how AI is moving beyond one-size-fits-all applications toward tools designed to meet the specialized demands of individual industries.

Leaders are not just focused on what AI can do now—they are looking ahead to its future capabilities. Many respondents posed questions about autonomous AI systems that can learn, adapt, and improve without human intervention. Such technology could revolutionize franchise operations, reducing the need for manual oversight and opening new opportunities for efficiency and innovation. While these advancements remain aspirational for many, they reflect the bold vision that franchise leaders have for the role of AI in their businesses.

As AI takes on more customer-facing responsibilities, its influence on brand perception is undeniable. Leaders expressed concerns about ensuring AI-powered tools align with their brand values and enhance customer trust. From analyzing sentiment on social media to refining customer engagement strategies, respondents underscored the importance of AI in maintaining their reputation in an increasingly competitive marketplace.

For franchises operating in sensitive sectors like education and healthcare, the accuracy of AI systems is paramount. Respondents raised concerns about the potential consequences of errors, particularly in applications that directly affect customers’ well-being or outcomes. This highlights the need for rigorous testing, oversight, and accountability to ensure AI’s outputs meet the highest standards of precision and reliability.

The questions raised by franchise leaders reveal an industry that is not merely adopting AI but actively shaping its trajectory. Across themes of security, customization, autonomy, reputation, and accuracy, their inquiries reflect a forward-thinking mindset committed to maximizing AI’s potential while addressing its risks.

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