As the franchising sector continues to navigate persistent labor shortages and rising operational costs, technology has emerged as a pivotal
solution. According to the 2025 Franchisor Survey, released by the International Franchise Association (IFA) and FRANdata, franchisors are making significant investments in technology to drive efficiency, improve operations, and address labor challenges head-on.
For technology suppliers, these findings highlight a growing opportunity. Franchisors are actively seeking partners who can deliver solutions that streamline operations, enhance customer service, and automate manual tasks—making now an ideal time to engage with franchise systems.
Technology Remains the Top Strategy to Tackle Labor Challenges
The 2025 survey data makes it clear that franchisors continue to rely on technology to solve their most pressing issues—labor shortages and workforce management. Sixty-three percent of franchise executives plan to leverage technology to increase revenues and cut costs in 2025, matching the strong focus we saw in 2024.
Franchisors are prioritizing several initiatives:
- Improving operations (over 60% of respondents in both 2024 and 2025)
- Assisting franchisees with recruiting efforts
- Enhancing employee retention strategies
Additionally, 28% of franchisors mentioned incorporating Artificial Intelligence (AI) and increased automation to help address these labor issues. For tech vendors offering AI-driven recruitment tools, workforce management platforms, and automation solutions, the franchise market is primed for engagement.
Investment in Technology and Innovation Is Accelerating
Capital allocation trends underscore franchisors’ commitment to technology. In 2025, 75% of franchisors expect to increase their capital spending on technology and innovation—up slightly from 73% in 2024. This increase in investment is consistent across several industries:
- 76% of health and fitness franchisors plan to boost their technology investments.
- 72% of sit-down restaurant franchisors are increasing allocations, though this is slightly lower than the 82% seen in 2024.
- 91% of business service franchisors also plan to increase their technology spending.
On the other hand, 56% of child-related franchise brands anticipate keeping their tech budgets flat in 2025, signaling a potential opportunity for suppliers to explore unmet needs in that space.
Emerging Technology Trends in Franchising
Beyond the numbers in the survey, several technology trends are shaping the franchising landscape in 2025:
- AI-Driven Customer Support: Many franchises are rolling out AI-powered chatbots and virtual assistants to provide personalized customer service and streamline processes. These technologies help reduce labor costs and improve customer experience.
- Virtual Reality (VR) for Franchise Development: Some franchisors are using VR technology to create immersive experiences for potential franchisees, allowing them to explore franchise concepts and operations remotely.
- Internet of Things (IoT) and Predictive Maintenance: IoT devices are being used to monitor equipment in real time, allowing for predictive maintenance that minimizes downtime and extends equipment life.
These technologies are becoming critical tools for franchisors looking to improve efficiency and stay competitive.
Brands Leading the Way in Advanced Technologies
Several leading franchise brands actively adopt advanced technologies to streamline operations, reduce labor dependence, and enhance customer experience.
McDonald’s is undergoing a comprehensive technology overhaul across its 43,000 global locations. The brand is implementing AI-powered drive-thru systems and internet-connected kitchen equipment designed to optimize operations and improve efficiency. This effort is aimed at enhancing the customer experience while reducing the burden on staff—a key strategy as labor challenges persist.
Wendy’s is also taking bold steps in AI adoption. After successful pilot programs, Wendy’s plans to expand its AI-driven drive-thru ordering system to 500 to 600 locations by the end of 2025. The AI technology improves order accuracy, speeds up service, and allows employees to focus on higher-value tasks.
Meanwhile, Yum Brands, which owns KFC, Taco Bell, and Pizza Hut, has launched “Byte by Yum!”, a suite of AI-powered software tools. This initiative transforms the customer journey from mobile and web ordering to kitchen operations and delivery logistics. By investing in AI-driven systems, Yum Brands is improving efficiency, increasing customer satisfaction, and addressing labor-related challenges.
These brands are setting the standard for technology adoption in franchising, demonstrating how advanced tools can solve workforce issues and create better customer and employee experiences.
What This Means for Technology Suppliers
The takeaway is clear: franchisors seek technology partners who can offer practical, scalable solutions to their most pressing challenges. Solutions focusing on AI, automation, and data-driven decision-making are in high demand.
If you offer:
- AI-powered recruitment platforms
- Employee engagement and retention tools
- Automated customer service technologies (chatbots, self-service kiosks)
- IoT-enabled systems for predictive maintenance
…now is the time to engage with franchisors looking to future-proof their businesses.
Dive Deeper into the Data
For a comprehensive look at how franchisors are prioritizing technology in 2025, explore the full 2025 Franchisor Survey, available here.
If you’re looking to identify which franchise brands are increasing their technology investments—and where your solutions can have the greatest impact—FRANdata can help. Our proprietary data and insights give suppliers the tools they need to target the right franchisors at the right time.
Contact FRANdata today to discover how we can support your growth in the franchising sector. Fill out a contact form or email us at frandata@frandata.com.