Franchise Your Business

Franchise Sales and Marketing Trends - June 2025

• Big Sky Franchise Team | Tom DuFore

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This is a recording of a live webinar recorded on June 27, 2025, starting at around 2 PM Eastern Time USA.   

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Links from the episode are here:   

  • https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/ 
    • https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/pmi/d4mn202505pmi.pdf 
    • https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/nmi/ughhrob202505svcs.pdf
    • https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/hospital/smtmrob202506hos.pdf
  • https://tradingeconomics.com/united-states/unemployment-rate
  • https://tradingeconomics.com/united-states/inflation-cpi
  • https://www.sca.isr.umich.edu/files/chicsr.pdf
  • https://www.census.gov/econ/bfs/current/index.html
  • https://www.uschamber.com/sbindex/summary
  • https://www.vistage.com/vistage-ceo-confidence-index/
  • https://www.guidantfinancial.com/small-business-trends/
  • https://www.linkedin.com/pulse/most-franchise-seekers-gen-x-future-belongs-millennials-mddic/?trackingId=O1eiMzN54u0zTUVxA67AaA%3D%3D
  • https://www.franchiseinsights.com/pdf/2025-franchise-development-lead-sources-summary.pdf
  • https://www.linkedin.com/newsletters/franchise-insights-and-news-6987728206669774849/ 

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Tom DuFore:

All right everyone. Thank you so much for joining us here on another edition of our Franchise your Business podcast and webinar series. My name is Tom Dufour. I am the founder and CEO of Big Sky Franchise Team and today's session is a session we've been doing pretty much monthly, almost every month, for the last about four years or so, and what we cover is a session we've been doing pretty much monthly, almost every month for the last about four years or so, and what we cover is a quick snippet and high-level overview of macro and some micro economic data points, just to try to get a sense of what in the world is going on in the world, at least in the US economy, and how that might be impacting your franchise sales. So this is a live event here and a live session, and so if you're new or just joining us, just as a reminder, please, I ask for you to subscribe to this podcast. You can subscribe to it at Franchise your Business. That's the podcast. Just look for Franchise your Business and you'll podcast. Just look for Franchise your Business and you'll see an icon there, an image with a light blue or a sky blue background, with some arrows going up and to the right. So that's where you can find us there. And then the other way to do is to subscribe to our YouTube channel, which is just Big Sky Franchise Team. Just search for us on YouTube there and you'll find us. We have over 600 podcasts, webinars, other sessions that we've made available, that are all there with great, great content. I'd be remiss if I did not also promote our second podcast, called Multiply your Success.

Tom DuFore:

We actually celebrated this month our five-year anniversary, which was last week. We celebrated five years. Episode 262 was our five-year anniversary episode. So pretty, pretty exciting stuff there. We had a great franchise guest. So, especially if you're in the home services space, you're going to love, love, love listening to our guest. He's a lawn care company franchise that is over. I think he said about 150 or 180 franchises that he's been able to sell over the last many years and he has a very unique take on how things move and grow and expand.

Tom DuFore:

So, anyway, just thought I'd give us a little quick overview there before we jump into it, and as such, I am live. So for those of you that are here with me, please feel free to type a question into the chat box. If you have questions, I will do my best to answer it or use the raise hand feature to get that going, and we'll go ahead and jump into the session. For those of you that listen to audio only, I will do my best to explain and talk through each of the images that we're showing on the screen. If you're not able to watch this live on your screen or if you are not able to watch the video that gets reposted of this up on YouTube, so we'll go ahead and get sharing here.

Tom DuFore:

So the first screen that we always like to take a look at is from the Institute for Supply Management. The Institute for Supply Management, and they produce three reports and we're gonna take a look at each of these three reports and on my screen you'll see the website. There's the manufacturing PMI, services PMI and hospital PMI, and we go in that order to review them. So the first up is the manufacturing PMI. This is a report prepared by Susan Spence and this is a. The PMI stands for the purchasing managers index, so they survey purchasing managers at these companies. So who else and who better to know whether the company is buying stuff or not than the person likely in charge of making those decisions or at least responsible for executing on those decisions.

Tom DuFore:

Percent 0.2 percentage point lower compared to the 48.7 percent reported in April. The manufacturing PMI decreased to its lowest reading since November, when it registered 48.4. Of the five sub-indexes that directly factor into the manufacturing PMI, only one the supplier deliveries was in expansion territory, down from two in April. So, as you can see on here, you saw some nice steady growth from about looks like November of last year up until about January of this year, and then you can see is this slow decline back down to a 48 and a half. So it's around this 50% marker which is the breakeven line for manufacturing and the overall economy breakeven line is here at 42.3%. So to me what this is saying is you know, I think manufacturing is kind of again it's kind of been in this middle ground territory. It looked like it was starting to trend up and now it's starting to trend down a little bit. So again, I tend to view manufacturing as a leading indicator. So when I see it kind of hovering around this middle marker, to me what does that say? Well, I look at it and think, 12 to 24 months from now we're going to kind of be maybe just hanging out in this middle zone. Still we're going to kind of be maybe just hanging out in this middle zone. Still, that's what I tend to think when I see it. You can see that we are up as compared to looking back. If you look at this chart back in 2023, you can see that it's obvious that it's higher than pretty much the entire year of 2023. And you can kind of see a bit of a trend line here in 2024. And it's at or above most of the months. Just visually looking at this I'm not looking at the exact numbers, but just visually you can see that that's up. So over the last couple of years you see this kind of slow, slow, slow, slow, slow, steady increase that you can kind of start to see some of that trend there. We'll see how this continues, but that's on the manufacturing side Okay.

Tom DuFore:

Next up is services, and certainly services is important because in the United States our economy is largely driven by services and it says this is a report that was prepared by Steve Miller from the Institute for Supply Management, by Steve Miller from the Institute for Supply Management, the Services Purchasing Manager Index. It says in May the services PMI registered 49.9%, a 1.7 percentage point decrease compared to the April reading of 51.6%. A reading above 50% indicates the services sector economy is generally expanding. Below 50% indicates it is generally contracting. A services PMI above 48.6% over time generally indicates the expansion of the overall economy. Therefore, the May services PMI indicates the overall economy is expanding for the 60th straight month. So this report's pretty interesting.

Tom DuFore:

You can see that it just dropped below that economy services economy break-even at 49.9% and you can see going all the way back to about. Was that October-ish it looks like October window where it was the peak number over the last October window where it was the peak number over the last two and a half years you can see that it's just kind of been this steady decline where the rate of growth has just been slowing. Because if we say that 50% is the services break even, well, it's been above that number. It's just been on the slow, steady decline up until this month where it dropped just below 50% on that. Okay. So what does that mean? Well, it means that if you're in a services-related business, to me it means it probably is a little bit harder for those sales that you might be securing. It might take a little bit longer, it might be a little bit harder to secure that prospect, might be talking to a few more potential suitors or potential service providers. So just some food for thought for you to be thinking about or considering as you're reviewing this, and just something for you to maybe even share with your franchise network and with your franchisees and to be thinking about on the franchise sales side of things. So that's the services PMI.

Tom DuFore:

Okay, next up is the hospital PMI and I will read here from the second paragraph, and this is a report that was done by Nancy LeMaster, and this report reads starting at the second paragraph, says the hospital PMI registered 52% in May, a three percentage point decrease from the April reading of 55%. The business activity index remained in expansion territory for the seventh straight month. New orders index was unchanged in May and the unemployment index was in expansion territory for the second consecutive month. The supplier deliveries index expanded, which indicates slower delivery performance. For the second straight month. The case mix index returned to expansion territory in May, registering 53%, an increase of 3.5 percentage points. So you can see the hospital has declined.

Tom DuFore:

But as you see on this chart I've noticed this and this is their newest report that's put out by the Institute for Supply Management you can see that it has much bigger zigs and zags in between them. They're getting a little more narrow here in 2025. And it looks like you can kind of put a bit of a trend line through these numbers here and it looks like it's generally declining here since about, oh, october, november of 2024, kind of this slow decline. So if we look back here, we can kind of see a similar period in services and then we can see manufacturing was increasing and now it's decreased a little bit over that same time period. So it just looks like things are cooling down a little bit from maybe where it was. But, all in all, all of each of these, for the most part, are at least for the general broad economy in a growth territory.

Tom DuFore:

So, in my opinion, what does that mean? Well, it's what I've been saying for the last few years. It's just kind of in this in-between stage. It's not great and it's not terrible. It's kind of in the middle. It just is kind of nudging along just a little bit. It's kind of a bit of. To me it reminds me of the tortoise versus the hare. It's a little bit of some tortoise activity here. It's just nudging along. So that's how I like to take a look at it.

Tom DuFore:

Next up is the unemployment rate, and it says this is from tradingeconomicscom for the US unemployment rate, and at the top paragraph it says the US unemployment rate held steady at 4.2% in May 2025 for the second straight month, matching market expectations. The rate has remained within a narrow 4.0% to 4.2% range since 2024. So let's take a look at this chart here. If we scroll down on this page, you can see here, since June of last year it was 4.1% and you see one up to 4.2, 4.1, 4.2, 4.1, 4.0 in January of 2025. Then we have 4.1. And then we have March, april, may 4.2, 4.2, 4.2%. So, as a whole, in my opinion, unemployment is staying steady and it's staying, relatively speaking, pretty low at 4.2%. So to me, despite we can see some of these conditions from these economic reports or these supply purchases.

Tom DuFore:

This is the hospital PMI and services PMI and manufacturing PMI. Again, while we see these kind of trending downward in terms of how fast it's growing or right around that kind of break-even line, in general, it looks like, with unemployment holding steady, that again, this is just another indicator of steadiness steady, steady, steady, steady. So when I look at it, I can't help but think well, it's again not great and not poor, it's just in the middle, it's nudging along. That's the best way I can. It's just kind of walking. It's not running, it's not jogging, it's nudging along. That's the best way I can. It's just kind of walking. It's not running, it's not jogging. It's that tortoise versus the hare kind of a thing. All right, let's take a look at unemployment rate.

Tom DuFore:

This is from tradingeconomicscom. This is the United States inflation and the consumer price for the CPI, consumer Price Index, and it says the annual inflation rate in the US. Us rose for the first time in four months to 2.4% in May of 2025, from April's 2.3%, the lowest since 2021, but came in below expectations of 2.5%. So let's go ahead and take a look at this chart here so you can see, dating back in May of 2024. By comparison, it was 3.3% for inflation and May of 2025 is 2.4%, so down. What is that? Nine points year over year from that, so pretty stark drop. The thing to remember with inflation and you probably are familiar with this, but inflation compounds so it's that 3.3% over the year before that and this 2.4% for this year is 2.4% over where it was a year ago for that percent change. So the good news is, though, that we're seeing this steady hanging steady. The last three months 2.4% inflation, 2.3%, 2.4. Positive signs, just to see that pricing increases and such seem to be leveling off. That reduces what I consider price uncertainty for consumers and, hopefully, is providing greater price certainty, which should hopefully improve consumer confidence and consumer spend.

Tom DuFore:

Okay, next up here, this is actually back to consumer sentiment. This is the surveys of consumers and this is the index of consumer sentiment that's put out by the University of Michigan. They've been doing this for decades now, and we're just going to take a look here. I'll click on the chart for the last 10 years and you can see, in January or February, or you know here just a few months ago, you can see that consumer sentiment really dropped down to the lowest number, where it was right around mid-year, about this about two years ago of 2022. Excuse me, three years ago. Three years ago in 2022. So you see it bottomed out in 2022 and had this nice steady rise up until about January of 2025. So it had about two and a half years of relatively steady increase, and you can see it's got these spikes, but generally showing a trend upward, and then things really crashed here in 2025. And last month or, excuse me, april was the low here and it looks like for last month it bumped up just a little bit. You can see on this blue line. I'm going to try to zoom in on this here. You can see on this blue line it nudged up just a bit. So good news is I always like to see the nudge is going up to reduce that drop. So we'll see where this goes.

Tom DuFore:

That generally means consumer confidence. When I read this, I think that this can sometimes be more of a lagging indicator as opposed to a leading indicator. So we'll see what this means meaning. Lagging means it's a bit behind from what's actually happening. I think that this could be. Hopefully, this is an indication of maybe the sentiment of what was actually going on a couple months ago and we're seeing things track back up. But if you find that it's been a little bit harder to sell stuff, a little bit harder to find customers, and this might be something for you to share with your franchisees or even in franchise sales, when you're thinking about franchisees coming into the network, it just is a recommendation.

Tom DuFore:

I would consider sharing some of this data with people Because sometimes, depending on the prospect. Prospects oftentimes are either bearish or bullish on what's going on with the market. Regardless of what is actually going on, they just have oh it's negative or oh it's great. And this can come in and help temper those expectations, because if someone's too bullish, well then they might have unrealistic expectations coming in in terms of what your franchise is able to produce or what they will be able to produce as a franchisee in your network. So going over some of this economic data with them can help showcase what to really expect, to maybe bring that overly optimistic perspective down to maybe a little more realistic. Or the person that's maybe more pessimistic and they're saying well, I think it's terrible and I don't want to buy, I'm worried, I'm going to wait until the economy straightens out.

Tom DuFore:

If I've heard that one in franchising or just sales in general, you know I've heard it a thousand times. And so when you hear that you could look at these data points and go back and show well, actually the unemployment rate is about as steady as it can get. I mean, it's about as consistent between 4.0% and 4.2% every month for a year. That's pretty steady, pretty consistent. You can look at the inflation rate working its way down, and then you have these PMI reports to show that it's relatively flat. You see a little bump up, a little bump down, but generally it's hovering right around this middle ground. It's just kind of bumping up and down there. So I just think that that's worth noting and pointing out just as a point of discussion for you to consider talking about with.

Tom DuFore:

Either your prospects say here's the data, here's some information to help you in making your decision. Maybe you write a blog post about it, by the way, and talk about it. Or you host your own webinar with your franchisees or prospective franchisees and share this data and you talk about it and say what do you guys think? How do you think this might impact the business? Or are you seeing this impact your business, especially for your franchisees that are in the system? Are you seeing this in your system? What are all you seeing? Survey the franchisees. Our guest for our five-year anniversary for our Multiply your Success podcast. He is obsessive about surveying his franchisees, and not just obsessive about surveying them, but also then taking that data and executing on it and doing something with it. So it's a really, really great episode and something that you might be able to survey, get a sentiment and see what they're thinking about.

Tom DuFore:

Okay, next up is business formation statistics. This is from the US Census Bureau and this is from censusgov and it shows the total number of new business applications, and so you can see here for the month of May, there were a total of 446,993 new business applications filed across the United States. That is a whole lot, a whole lot of new business applications, and so I think it's important for you to take a look at this and see that really, post-covid here and since about August of 20, it was down a few months, but basically since mid-year 2020, so about five years, outside of a few months there have been over 400,000 new business applications across the United States, and I say this every session. But boy, this is a trend, this is happening. People are thinking in the United States, they've got business startup on their minds and they're acting on it. So if someone inquires about buying your franchise or expresses an interest in it, know that they are likely serious about doing something and, whether it's buying your franchise, starting their own, whatever it might be, I think you need to assume that they are going to be going into business for themselves, and if they're going to, why not buy your franchise, especially if they already inquired about it. Something about your franchise caught their interest, attracted them to it, to what you're doing, so help communicate how your franchise can help solve their interest or their problem of wanting to start a new business. So I just think it's important to talk about that and to share that, especially as I've been asked a lot how the sentiment is for franchise sales throughout the country and what I hear just in general, between having attended three conferences last month, in addition to speaking to others in the space generally speaking on the new business development, on the new franchise sales efforts in franchising, the sentiment I'm hearing, just again, just what I'm hearing in conversation. I have no substantive data to validate other this, but what I'm hearing is generally worst case is neutral and for most of uncertainty or what's happening, for example, with the last few months of uncertainty and with the tariff situation that's been going on, what I usually see is that is that during times of economic uncertainty, we typically will see an increase in interest in franchise ownership. So those times tend to bode well for people looking to say I need to take control of my own destiny and get out there and do something Okay.

Tom DuFore:

This next chart is from the US Chamber of Commerce. They do a small business index every quarter and they've released their quarter two for 2025. And the summary and highlight says inflation remains top concern, with future expectations mixed. And I'm just going to read some of the highlights off of this chart. It says 73% of small businesses say that they are comfortable with their cash flow. So I like this as a nice little interesting sentiment. That means if these small businesses are comfortable with their cash flow, that means overall things are going well Maybe not great, but they're going well enough that they're comfortable with their cash flow. So I think that's a really going number. That's almost three out of every four small businesses saying that. 66% say that figuring out what benefits to offer is challenging. So benefits for their staff and things of such are they're still trying to figure out.

Tom DuFore:

And then there's the small business index score, and so for Q2, it read at 65.2. And I'll show you this chart. It ranges between zero and 100. And so it's 62, excuse me, 65.2. It's a bounce up from Q1 at 62.3. So it had been declining. It was a peak number in Q3 of 2024 at 71.2, a peak number since Q3 of 2021. So it's been four years and then it declined for Q4 of 24, declined in Q1 of 25, and now it's bounced up in Q2. So to me, that index score one, it's been steadily growing and kind of hanging in this low to mid 60s range, a few pipe spikes here and there, but it's kind of been hovering in and around that spot here for one. Two, you know, three years, almost four years, it's kind of been hanging in that zone. So I think that's positive because it's not below 50, you know. But it's kind of in that, you know, slow growth kind of a zone or cautious growth kind of a zone.

Tom DuFore:

Okay, next up here is that I'd like to showcase our few items from. This is from Franchise Insights and they're publishing this on their LinkedIn page now. So this is Franchise Insights on LinkedIn and they've been publishing their reports here instead of their every week, so it's made it a little easier to find. So we'll go over a couple of these.

Tom DuFore:

But this was published by mike alston for franchise insights. He published that june 25th, which was yesterday, uh, oh, I'm excuse me, not yesterday, uh, it was, um, uh, today's the 27th, so that was on wednesday. He publishes and says how aspiring franchisees are currently employed and it says 1% are active military, 16.7% are current business owners, 21.7% are freelance or consulting basically kind of like an independent contractor 13.3% are part-time and 47.3% are full-time. So I look at this data and say, wow, that's interesting. So roughly about half of your franchise buyers that are coming through are full-time, and then you've got roughly about one out of every 12 is part-time. About another one out of every 12 is going to be a business owner. So I find that interesting. So you've got a bunch of folks that are looking to buy a franchise that already own another business.

Tom DuFore:

So my point in calling that out to you in franchise development for those of you in franchise development and franchise sales is to be thinking about how does that business owner play in your system. Is it welcome, is it something of interest, or are you going to rule that person out because you want to make sure that they're focused entirely on your business or see how they're going to fit in with your business? Now, by example, we have a client that she sold her first franchise. It turned out it was a multi-unit franchisee that is an owner in other businesses and that franchisee is partnering in a minority partner to run daily operations of that business. So while that business owner is not actually going to be running day-to-day of that business, so while that business owner is not actually going to be running day-to-day, so maybe there are some creative things you can do within your franchise system to make that work.

Tom DuFore:

So that's one piece here, and then the other one that I'd like to showcase is just talking about, excuse me, the franchise buyers by age. And so from January to April, if you're looking at this chart, the chart shows the age by age cohort they call it by generation essentially and it shows January to April of 2021 compared to January to April of 2025. So it's comparing from four years ago data to today and it shows that today Generation X is showing that they are purchasing, that they are 52.9%, so roughly 53% of all franchise buyers. Baby boomers are 22.4%. Baby boomers are 22.4%. Generation Y, or millennials, are 21.7%. Gen Z is slowly picking up a little steam. They're at 2.3% and then the silent generation those born before 1946, are at 0.8%. So just be aware that if you were to kind of average this out, it looks like about 50% of your buyers are going to be Gen Xers, about roughly a quarter or one out of every two or, excuse me, one out of every four, or one out of every five will be a millennial. One out of every four or five will be a baby boomer, and then you've got the balance. A very, very low percentage will be Gen Z and silent generation on average. So just be prepared that the Gen Xers which that makes sense, middle-aged, having worked, having some assets, that are ready to start doing something on their own, and so that's what I'd like to talk through for the day.

Tom DuFore:

I would love to open this up to any questions from anyone here. If you did join us late, please, please, please, make sure you subscribe to the podcast, franchise your Business at available any of your favorite podcast service, whether it's Apple, spotify, or subscribe to our YouTube channel to get access to the podcast as well. Do we have any questions from anyone that's been able to tune in today? Okay, well, I'm not seeing any questions come through.

Tom DuFore:

If you would like to speak a little bit further about anything specific to your business, we do offer a free consultation, so if you say, boy Tom, this was a great message, I'd love to talk a little bit more about this or how it might apply to my business or have some specific questions about what's going on in your world.

Tom DuFore:

That Big Sky might be able to talk with you and see uh talk with one of our team members, or uh put a request in to speak with me. I'd be happy to spend a little time with you and and see if it's something, if there's something we can help you with or or help you on a decision making journey that that you happen to be going through. Thank you, thank you so much for being here today. Everyone, have a great, great rest of your week and a great rest of your day and, if we're not back next week, I hope you enjoy 4th of July. It's one of my favorite holidays. So, happy 4th of July and we look forward to seeing you here next month as we continue this series. Thanks everyone, take care.

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