The franchise sector isn’t retreating in 2026. It’s expanding.
The International Franchise Association projects approximately 845,000 franchise establishments in the United States in 2026, an increase of roughly 12,500 units. Franchise employment is projected to approach 8.9 million jobs, while economic output is expected to reach approximately $921.4 billion.
That’s encouraging!
But growth in locations doesn’t automatically translate into growth in margins.
For franchise operators, especially those managing dozens or hundreds of units, expansion can expose an entirely different problem:
Small inefficiencies multiply extremely well.
A $100 problem isn’t a $100 problem anymore.
Imagine an unnecessary $100 monthly vendor expense.
At one location, leadership may barely notice it.
Across 80 locations:
$100 × 80 × 12 = $96,000 annually.
That’s why multi-unit operators need to think differently about indirect expenses.
The relevant question isn’t necessarily:
“Is this invoice large enough to worry about?”
It’s:
“What happens when this expense repeats across the portfolio?”
Telecom, internet, waste, utilities, security, landscaping, pest control, equipment maintenance and similar expenses can each become material when multiplied across a growing network.
Restaurant operators already see the margin problem.
For restaurant franchises in particular, the National Restaurant Association reported in July that total restaurant expenses have increased 36% compared with pre-pandemic levels.
Its conclusion is important: operators facing elevated expenses need to improve efficiency and productivity while finding opportunities to manage costs.
There are limits to how much of that pressure can simply be passed to customers.
Eventually, operators have to look inward.
Growth requires infrastructure behind the growth.
Franchise operators tend to be very good at standardizing the customer-facing side of their businesses.
- Brand standards.
- Menus.
- Equipment.
- Training.
- Technology.
- Store design.
But recurring vendor management isn’t always standardized with the same rigor.
One location gets one internet package. Another gets another. One waste contract renews this month. Another renewed three months ago. One manager negotiated a local service agreement. Another inherited one.
Eventually, the organization may have hundreds of contracts being managed through different inboxes, spreadsheets, accounting systems and individual relationships.
That’s not merely an administrative problem.
It’s a scalability problem.
Vendor management becomes a margin strategy.
Strategic vendor management gives multi-location operators the ability to look horizontally across the portfolio rather than vertically at individual stores.
That means asking:
- Are we paying consistent rates?
- Are we purchasing services we still use?
- Are invoices matching contracts?
- Can purchasing volume create negotiating leverage?
- Are renewals happening strategically—or automatically?
- Are internal employees spending too much time solving vendor issues?
The objective isn’t indiscriminate cost cutting.
It’s making sure growth doesn’t quietly create operational waste faster than it creates enterprise value.
The takeaway
2026 could be another expansion year for franchising.
But the strongest multi-unit operators won’t measure growth exclusively by store count.
They’ll ask a harder question: As our footprint grows, is our operating model becoming more efficient—or simply becoming bigger?
Sources: International Franchise Association 2026 Economic Outlook · National Restaurant Association cost analysis