Franchise Your Business

Franchise Sales and Marketing Trends - September 2025

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This is a recording of a live webinar recorded on September 12, 2025, starting at around 1 PM Eastern Time USA.   

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Links from the episode are here:   

  1. https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/
  2. https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/pmi/haay202508pmi.pdf
  3. https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/nmi/freeparob202508svcs.pdf
  4. https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/hospital/gdbyrob202509hos.pdf
  5. https://tradingeconomics.com/united-states/unemployment-rate
  6. https://tradingeconomics.com/united-states/inflation-cpi
  7. www.sca.isr.umich.edu
  8. https://www.franchiseinsights.com/small-business-startup-sentiment-index/financing-concerns-lowest-in-a-year-among-aspiring-franchisees/
  9. https://www.franchiseinsights.com/franchise-development/franchise-lead-generation/lost-opportunity-in-franchise-prospect-initial-contact-attempts/
  10. https://www.franchiseinsights.com/franchise-prospects/aspiring-franchisees-turn-to-personal-savings-sba-and-bank-loans-for-startup-funding/
  11. https://www.census.gov/econ/bfs/current/index.html
  12. https://www.census.gov/econ/bfs/current/index.html
  13. https://www.franchise.org/2025/07/entrepreneur-lawmakers-introduced-a-bill-to-make-current-version-of-joint-employer-rule-permanent/
  14. https://finance.yahoo.com/news/economists-see-fed-rate-cut-100000652.html

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Tom DuFore:

All right, everyone, thank you for joining us for another edition of our is going on in the macro and micro economies that impact franchising, so we go through a wealth of data and information and hopefully help you as you start figuring out some decisions you're going to make for your business and really for those franchise sales and franchise marketing professionals. The goal here is to help give you some information to maybe adjust your messaging, adjust your market, adjust your conversations, or to provide you with tools, as you're talking to these prospects, to help give some guidance or some thought into supporting franchisees through this buying process. Now, one other thing I always like to add in here is that if you haven't subscribed to our podcast, please do so on your favorite platform, whether that's Apple Podcasts or Spotify, or subscribe to our YouTube channel. So our podcast is just Franchise your Business. It's the Franchise your Business podcast. You'll see a light blue or a sky blue logo with arrows going up. And we have a second podcast while you're there, called Multiply your Success. That's our premier highly produced podcast where we interview all kinds of guests and leading guests from around the country and around the world. And finally, I would add that if you find yourself in the market as someone that's thinking about franchising their business, or maybe you're a franchisor looking for a second opinion or some additional support. Check us out. Give me a call. I'd love to schedule some time. We offer a free, no obligation consultation. You can just go to bigskyfranchiseteamcom. So, with that being said, as our intro, as folks are loading into our live session here, I will share my screen and we will get this program and show on the road. So here we go.

Tom DuFore:

Okay, so the first reports I always like to share as we start going through this and, by the way, for those of you that listen to audio only, I will do my best to describe what we're sharing here. The first report is through are produced. The first reports are produced from by the Institute for Supply Management, and they produce three reports, as you can see here. There's the manufacturing PMI, services PMI and hospital PMI, and PMI stands for Purchasing Managers Index. And so if we go to the first report here, it is the manufacturing PMI, and this is a report done by Susan Spence, and this says that manufacturing PMI is at 48.7% and it says the US manufacturing sector contracted in August for the sixth consecutive month after two months of expansion, preceded by 26 months of contraction. The manufacturing PMI registered 48.7%, 0.7 percentage point higher compared to the 48% reported in July. Of the five sub-indexes that directly factor into the manufacturing PMI, two are in expansion territory, up from one in July. After two months in expansion territory, the production index lost 3.6 percentage points, putting it back in contraction. And so for those that are able to see this, you can see starting in 2024, it really kind of stayed flat or relatively flat, maybe contracted a bit, but relatively flat, or a slight incline from contraction. We saw a little bit of growth territory at the first part of 2025, and then it's been relatively flat here, just below that 50% marker on this report for the year. Again, why I like manufacturing is it tends to be a leading indicator and to me this is an indicator of why, if you're out there feeling a little bit of a strain or feeling a bit of a stress in the economy, to me this helps give an indication to show well, the economy is kind of for manufacturing, it's just below that 50% marker. So that to me, helps provide some detail on that or some numbers to support that.

Tom DuFore:

Okay, next up for their reports is the services PMI, and it says this is a report by Steve Miller, services PMI, and it says this is a report by Steve Miller and it says in August the services PMI registered 52%, a 1.9 percentage point increase compared to the July reading of 50.1%. A reading above 50% indicates the services sector economy is generally expanding. Below 50% indicates it is generally contracting and a services PMI above 48.6% over time generally indicates an expansion of the overall economy. Therefore, the August services PMI indicates the overall economy is expanding for the 63rd straight month. And so you can see on this report for 2025, you see that it started up a little bit higher and has dropped down and has been around that 50% marker and popped back up in August to 52% a little bit, but again you see this one's just over that 50% line. The manufacturing was just below that 50% line. So you've got a lot kind of hovering, bouncing between kind of this middle point. So to me again that helps show and help quantify and provide some numbers maybe what you or some of your prospective franchise buyers or current franchisees might be feeling.

Tom DuFore:

And then the third report here is the hospital PMI. This is a report by Nancy LeMaster and I'm going to start in the second paragraph here and it says the hospital PMI registered 51.3% in August, a 0.3 percentage point increase from the July reading of 51%, indicating expansion for the second consecutive month. After one month of contraction, the business activity index remained in expansion territory for the 10th straight month. So I think this is important to see and you can see that generally since the beginning of 2024, you can kind of see this trend line. It's pretty easy to see that it's kind of been just trending downward for the last year and eight, several years, couple of years, two or three years here where I've seen this enough, where I think there's some seasonality which would make sense based on the seasons cold, flu seasons and things that are going through.

Tom DuFore:

Okay, next up is to take a look at the US unemployment rate. So I'm going to zoom in on this and this is showing a 10-year unemployment rate and if I look at the one year, we'll see that the unemployment was 4.3% and, by the way, this is from TradingEconomicscom United States unemployment rate. So it shows for August the reading was 4.3% and you can look at this 10-year trend. So you can see back in October of 2015, it was at 5%, trending all the way down to 3.5%, 3.6% in late 2019 into early 2020. Then we had the COVID shutdowns and things that happened with the high unemployment and now we see that it's been since midway through about 2022, where it was about 3.5% or so. You can see that it started trending upward. It was flat and then started trending upward here for 23, 24, and now into 25.

Tom DuFore:

The unemployment's increasing. So the top paragraph reads on this page. It says the US unemployment rate rose to 4.3% in August of 2025 from 4.2% in the previous month, aligning with the market expectations to reflect the highest proportion of joblessness since October of 2021. The number of unemployed increased by 148,000 to 7.384 million in the period. In turn, the labor force increased by 436 to 170.778 million, driving labor force patient rate to increase by 0.1 percentage point from the over two-year low in the previous month to 62.3%. The broader U6 unemployment rate, which includes discouraged workers and those working part-time for economic reasons, rose to 8.1% from 7.9% in July. The source that they pulled this from is the US Bureau of Labor Statistics. So what to make of this? Well, I still think in general, unemployment rate is generally low, but it's still worth noting that we see the steady climb in unemployment and that the labor participation rate is, relatively, is on the low side here. That it's it's so if you the same or fewer people are participating in, unemployment is going up. So so ticking up, which you know as, as you may have heard or in news, may indicate a softening of the economy.

Tom DuFore:

Okay, next up is the US inflation rate. This is from tradingeconomicscom slash united dash states, slash inflation, dash CPI. So this is tradingeconomicscom and it shows in August of 25 that the inflation was 2.9%. And I have a 10-year calendar up so you can see pre COVID, during and post here. So in general this year it looks like it's been dipped a little bit and it seems to be coming back to where it was in the first part of the year January was 3%, february 2.8% and now August 2.9%. So kind of trending back to where it was at the first part of the year.

Tom DuFore:

And the top of this article and the first part of the paragraph reads the US annual inflation rate accelerated to 2.9% in August 2025, the highest since January, after holding at 2.7% in both June and July. In line with market expectations, Prices rose at a faster pace for food, used cars and trucks and new vehicles. Also, energy costs increased for the first time in seven months, prices for gasoline and fuel oil decreased less and the rise for natural gas prices remained elevated. Meanwhile, inflation steadied for transportation services and slowly slowed slightly for shelter. On a monthly basis, the CPI went up 0.4%, the most since January, above forecasts of 0.3%. So again it's trending up. This has economists kind of wondering. You know it's trending up. This has economists kind of wondering what's going on Now in terms of big numbers, big shifts. It's not a huge shift.

Tom DuFore:

You can see the chart here. If you're looking at it over a 10-year window, you can see back in. Just as an example, in July of, or August of 2019, it was 1.7 percent and then by January of 2020, it was 2.5 percent, just to kind of give an indicator there. Or in January of 2018, it was 2.1 percent and by July of 2018, it was 2.9 percent. So you see some of these fluctuations that occur Sometimes. It's helpful to see it over a longer time period.

Tom DuFore:

Okay, let's look at the surveys of consumers. This is from the University of Michigan and I like looking at the index of consumer sentiment, essentially saying you know, what does a consumer think? And it shows that September was 55.4, august was 58.2, and then September of 2024 was 70.8. So the month-over-month change was a decrease of 4.8% minus 21%. So we're looking here, year over year, at a pretty substantial drop. And then we'll take a look at the charts I'll click on the PDF here and you can see that in 2025, you see that things have dropped. If you look at about a year ago, you can see on this chart here it was in a bit of a valley but it kind of on the rise up at the first part of the year and then it dropped down to some of the lowest numbers and now it's kind of trending up. So we're going to see if this up and down starts ratcheting back up to where it was in 2023, 2024-type territory, to keep heading upward.

Tom DuFore:

However, the point on all of this, as a reminder, is, when consumer sentiment is lower as it is now, it generally means it's going to be harder to sell whatever it is you're selling, whatever products or services it is of mine always used to say in difficult times, it takes twice as long to sell half as much, or costs twice as much to sell half as much in terms of time and resources. The idea meaning that when consumer sentiment this consumer sentiment index indicates that if you're selling franchises, for your franchisees that are facing the consumer or customer, it might mean that they're going to take a little bit longer. It might mean that it's going to and they're going to look at a few more competitors. It might mean that they're going to really scrutinize the purchase. So be. In my opinion, it means you ought to be prepared with the extra information, extra resources and differentiators to really make sure that you're able to communicate clearly to the franchisee your value proposition and your differentiation between any other potential customers or, excuse me, potential competitors or options that a customer may end up choosing. And in this case it very well might be a franchise. And remember, in franchise sales for those of you that have been doing it for a while very often it's not another franchise that they're considering buying. That's not actually the competitor. The competitor is something else a new job, a new promotion, a life event, something else that's going on. So just keep that perspective in mind.

Tom DuFore:

Okay, next up we're going to go to FranchiseInsightscom. They have lots of great franchise information. This is a report produced by Michael Alston. This was from August 6th and it says Fin concerns lowest in a year among aspiring franchises is the headline and if you can see the chart here, it's the lowest it's been in a year. In the first paragraph reads August 6th 2025, just under 63% of franchise seekers responding to the FranchiseInsightscom August Startup Sentiment Survey cited funding or access to credit as their greatest concern in launching their startups the lowest for that measure since September of 2024. This is consistent with the expectation of lower rates by consumers in the University of Michigan confidence survey. So what it's indicating is that what he's saying here is that he thinks the reason why this has dropped the ability to get access to funding and credit is the expectation that the Federal Reserve is looking to lower interest rates, which should, hope, reduce business lending rates as well.

Tom DuFore:

And I just had up I'll pull up here this chart from Yahoo Finance, from let me pull that up here that was talking about the anticipation of the Federal Reserve next week lowering the rate. Let's see the federal funds rate. Let's see here, yeah, eight hours ago. Let's see, oh, yep, they were saying that they see a rate cut. It says here, I'll share this. It says this is from Yahoo Finance and this it says from Bloomberg Economist see Fed rate cut next week, at least one more in 2025. This is by Maria Eloisa Capuro and Dana Morgan.

Tom DuFore:

This was released this morning, september 12, 2025. So it says it reads cracks in the job market. This is from Bloomberg. It says cracks in the job market will likely prompt the Federal Reserve to execute a series of interest rate cuts in the coming months, beginning with a reduction next week, according to economists surveyed by Bloomberg News. So I just think that's a noteworthy expectation. So if let me share this again so if you start to see these rates reduce, you might see a little bit of a surge of activity here next week and into the fourth quarter here. So just worth noting.

Tom DuFore:

Okay, next up on our report is going to be this is from FranchiseInsightscom as well, and it says S lost opportunity and franchise prospect initial contact attempts. This is by Mike Alston. This was released two days ago, on September 10th 2025. And it says over the summer of 2025, one third of individuals submitting inquiries to franchises said they were contacted by all of the franchises they indicated interest in within seven days. As reported by FranchiseInsightscom mystery shopping surveys from June to August of 2025. In this period, another 14.1% of prospects were contacted by at least half of the franchises they submitted inquiries to, but, most surprisingly, the highest percentage said they were contacted by none of them. Those who reported being contacted by none of the franchises within seven days after inquiry stood at 39.1%, with another 13.5% of respondents being contacted by less than half of franchises they inquired to. That means that something approaching half of lead generation budgets in this summer were underutilized by some franchise sales teams, assuming the survey respondents are representative of the total population of prospects.

Tom DuFore:

So here's the idea. When we start looking at it, I think this is a great report that Michael Alston and Franchise Insights produced. So to me, what it's saying, the main takeaway is that of these mystery shoppers, only a third of the mystery shoppers received a callback or a follow-up from all of the franchises they inquired on. So if you're in franchise sales, that means two-thirds of franchisors out there. Their sales teams are not following up with everyone. So at least half was at 14.1%. So that's 47,. What is that? 47.4%? 47.4%. So said that at least half, so all, or at least half or more, were contacted, and the 50% were doing that Less than half or none of them, which is incredible to think. None was at 39.1%. So four out of 10 inquiries, or two out of five inquiries, no one called back. And so again, in franchise sales, very often we are our own worst enemy as the franchisor by not following up with leads, not calling them back or, at the very least, having automation set up. I know, with the clients we work with, having a CRM system with automation that sends out emails and automatic follow-ups so that if, in the event, someone's out sick or on vacation over the summer, correspondence is going out, something's happening there. So just to share that you know, check your own process internally and be thinking about how you can minimize something like that happening in your own brand in your own system.

Tom DuFore:

Okay, this was released September. Oh, this looks like it has not been released. It's a future release. It says September 17th, 2025. So maybe it's supposed to be released next week, but it was on their website here.

Tom DuFore:

And this is the aspiring franchisees. Turn to personal savings, sba and bank loans for startup funding and it says the top three funding sources anticipated for business startups number one personal savings. Number two SBA loan. Number three bank or other loan providers. Those are by far the three largest funding sources for startup businesses. So I just think that's important to note and we'll be doing a session next month about the franchise registry and SBA loans and going over some of that next month, so be on the lookout for that to talk through it. But just something for people in franchise sales to be thinking about. These are the top three solutions. So how can you, as a franchisor, make sure you have options or support to be able to guide a franchisee or prospective franchisee through this process of acquiring the funding or securing the funding that they need to start the franchise? So I just think that that is worth noting.

Tom DuFore:

Ok, next up is the United States Census Bureau and this is the business formation statistics. So, while you can see, a lot of this data in the on the economy and macro economy is, at best, mixed, indicating uh, uh under performing than over-performing, which means that you know we're kind of just below this economy, uh comfort zone. So we've got a lot of indicators that are just showing it's just kind of, um, it's not terrible, uh, but it's it's below average. You know it's just under that average and so, uh, I think that's just worth noting as you start to try to summarize some of that data. So let's take a look at business formation, though I'll zoom in on this here and it shows that in August of 25, there were 473,679 total business applications submitted across the United States. It was 0.5 percentage point increase over July and you can see on this map again. I mean, this is surging. We're fast approaching almost 500,000 new business applications.

Tom DuFore:

So to me, the big takeaway from this is startup and entrepreneurship and new business. Startup is on the hearts and minds of Americans, so I would assume that if you have a franchise prospect coming through, I think it's important for you to assume that they are and will be creating and forming a new business. I think it's important to assume that. So, whether it's your franchise or starting their own or whatever they come up with, they're thinking about doing, not just thinking about it people are doing this. So the number of new business applications has surged since COVID hit and you can see prior to that even on this report here from 2015 through the very early part of 2020, it was a slow and steady rise from the low 200,000s to around 300,000 new business applications being filed Since 2021, other than it looks like maybe a month or two here or there. So over the last four and a half years roughly, it's been over 400,000 new business applications per month. That's tremendous, tremendous to me and for you to be thinking about as you're entering into it. So just something to note and think about that this is a good thing. That means that the buyers probably are going to do something.

Tom DuFore:

Next is from Franchiseorg. I'm not going to read this article. This was posted July 23, 2025. And the headline says entrepreneur. It says lawmakers introduced a bill to make current version of joint employer rule permanent by Carl Stoffers, and I'll just read the first paragraph here. It says franchise owners could soon see relief from one of the industry's most contentious legal issues the joint employer standard. A bill working its way through the US House of Representatives aims to permanently define when two businesses can be considered joint employers, an issue with major implications for the more than 800,000 franchise establishments across the country. Together, those businesses generate hundreds of millions in economic in annual economic output and support close to 9 million jobs in the US. So the point here is that this back and forth with the joint employer rule changing this back and forth with the joint employer rule changing oftentimes depending on which administrators or bureaucrats are in office or are in a leadership position they are this definition of joint employer has been changing and it's been inconsistent, and so in the franchise world we'd like world, we'd really like to have something consistent. So if this is a bill that turns into a permanent law, it really makes it a lot easier to set the very clear standard for the franchise community. So just putting that out there Now, this was back in July, so hopefully we continue to see some movement there. Okay, so I think that gets us through to the end here of our report.

Tom DuFore:

I'd love to open this up for any questions from any attendees that happen to be here. Feel free to type into the chat feature or the Q&A, or raise your hand and I can unmute you. But again, I'd just like to thank everyone for being here. We will post this on our podcast called Franchise your Business. This will also be posted on our company blog page, so, if you're unsure where to go, our blog is the center source for all this data and information, and then, lastly, it will be posted on our YouTube channel as well, at Big Sky Franchise Team. So I'm not seeing any questions coming in here. Just want to thank you all again for attending. Please subscribe. Please subscribe and give us a review. We would greatly appreciate a review. We certainly love five-star reviews, but hey, any reviews or review, we really appreciate it. Thank you so much for being here today. Enjoy your weekend and we'll look forward to seeing you next week for our next session that we have next Friday. Thanks so much, everyone, take care.

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Tom DuFore

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