Franchising in 2025: What's Changing in the Industry?

Franchising is often sold as a turnkey solution to entrepreneurship. For many South Africans, the idea of investing in a franchise seems like a low-risk way to enter the business world with a trusted brand behind them. But behind the glossy brochures and attractive ROI figures lies a series of hidden costs that can derail even the most well-intentioned franchisee.

In this article, we at SA Franchise Warehouse (SAFW) aim to uncover the overlooked expenses in franchising and help aspiring franchisees budget realistically. Whether you're new to the game or considering your next venture, knowing these costs in advance can be the difference between success and financial strain.

1. Sustainable Franchising Takes the Lead

Eco-conscious franchising is not just a trend; it's a competitive edge. In 2025, more franchise brands are embedding sustainability into their core operations. From biodegradable packaging to energy-efficient stores and carbon-neutral logistics, green franchising is gaining traction among environmentally aware consumers.

Brands that prioritise sustainability are seeing increased brand loyalty, government support, and long-term cost savings.

2. Technology Is Powering the Future of Franchising

The role of technology in modern franchising continues to grow. Automation, AI, and cloud-based platforms are revolutionising the way franchises operate, from real-time inventory tracking to AI-powered marketing campaigns.

Franchisees now rely on digital dashboards to manage operations efficiently. By 2025, expect technology to be a minimum requirement for competitive franchising, rather than a bonus.

3. Online and Mobile Franchising Models Thrive

Mobile-first and digital-only franchises are redefining accessibility. With lower startup costs and high flexibility, these models enable entrepreneurs to reach large audiences without the need for physical storefronts.

Whether it's a mobile car wash, online education service, or virtual wellness platform, digital franchising is a strong path forward for 2025.

4. How Consumer Behaviour Is Reshaping Franchising

In today's fast-paced world, consumers expect more personalisation, speed, and convenience. Successful franchising in 2025 is built around understanding these evolving expectations.

Trends include:

• On-demand services – The growth in food delivery has been staggering since 2020, and more franchises are implementing their own delivery services to supplement third-party delivery, such as Mr D.
  
  
• Subscription-based models – From gyms to beauty services, having a subscription means easy access and less hassle for consumers. 

• Ethical sourcing and local impact – More customers are concerned with environmental issues and how retailers address recycling and other green initiatives.

• Instant digital interactions – Chatbots are already ubiquitous when dealing with large corporate companies. New technology can help customers avoid getting stuck in a repetitive loop with a chatbot and access the required services more quickly.

Franchises that align with these behaviours will win customer loyalty and market share.

5. Social-Driven Franchising and Brand Purpose

Franchising with a mission is gaining momentum, especially among Gen Z and millennials. These consumers support brands that stand for something, whether it's inclusivity, community upliftment, or environmental action.

Franchises that embed social purpose into their model are outperforming competitors. In 2025, "values-first" franchising will be one of the most potent brand differentiators.

6. Flexibility in Franchising Formats

The rigid, traditional franchise structure is fading. Today's entrepreneurs seek scalable and affordable options. That's why modular franchising models, such as pop-ups, kiosks, and home-based operations, are growing in popularity. Examples of home-based franchises include InXpress, The Alternative Board and Digit FMS. 

Flexible formats are lowering entry barriers and allowing franchisees to adapt quickly to new markets and trends.

7. AI and Automation Fuel Smarter Franchising

AI is streamlining operations across the franchising world. From predictive stock ordering to personalised customer experiences, artificial intelligence is driving smarter, leaner franchise systems.

By 2025, AI-powered franchising is expected to become the standard, particularly for businesses in the food service, e-commerce, and logistics sectors.

8. Micro and Mobile Franchises Go Mainstream

Low-investment, mobile, and micro-franchising models are gaining ground. These compact franchises are perfect for entrepreneurs who want to start small and scale gradually.

Consider options such as vending machines, mobile pet grooming, on-demand tutoring, or mobile coffee vans, which are ideal for both South Africa's urban and rural markets. Pie City has franchises that start at an investment of R250,000.

9. Franchising and Financial Innovation

Innovations in franchise financing are making it easier than ever to get started. From fintech-backed loans to crowdfunding platforms, 2025 brings more accessible funding options for prospective franchisees.

As a result, franchising in South Africa is opening up to a more diverse range of entrepreneurs, including young people and previously underserved communities.

10. Franchising After the Pandemic: What Stuck

The pandemic reshaped franchising for good. Some of the key changes that remain in 2025 include:

• Contactless payment and ordering.

• Virtual consultations and onboarding.

• Delivery-focused service models.

• Remote franchise management tools

Brands that successfully pivoted are now more resilient and better equipped for long-term growth.

11. What's Next for Franchising? Predictions for 2025–2030

The next five years will define the future of franchising globally and in South Africa.

Key predictions include:

• Accelerated global expansion into Africa and Asia
• AI-integrated business operations
• More regulation and sustainability standards
• Surge in health, wellness, and digital education franchises

The franchising industry is set for both disruption and opportunity.

Final Thoughts: Franchising in 2025 and Beyond

Franchising continues to evolve, offering exciting possibilities for entrepreneurs, investors, and brands. As trends in sustainability, tech, and consumer values take centre stage, forward-thinking franchises will have the upper hand.

If you're looking to explore or invest in the future of franchising, now is the time to act. 

Explore available franchise opportunities on SAFW and start building your future today.