Franchise Sales Trends That Matter Now

This is a recording of a live webinar recorded on July 17, 2026, starting at around 1:45 PM Eastern Time USA.   

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Links from the episode are here:   

1.  ISM® PMI® Reports
2. https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/pmi/hotdm202606pmi.pdf 
3. https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/nmi/wtidrob202606svcs.pdf
4. https://tradingeconomics.com/united-states/unemployment-rate 
5. https://tradingeconomics.com/united-states/inflation-cpi
6. https://www.sca.isr.umich.edu/files/chicsr.pdf
7. https://vistage.com/vistage-ceo-confidence-index/
8. https://www.uschamber.com/small-business/small-business-index-q2-2026/current-challenges
9. https://www.census.gov/econ/bfs/current/index.html
10. https://www.franchiseinsights.com/small-business-startup-sentiment-index/startup-sentiment-softens-again-in-june/
11. https://www.franchiseinsights.com/franchise-prospects/the-top-three-sources-of-franchise-funding-according-to-todays-prospects/
12. https://www.franchiseinsights.com/franchise-development/work-schedule-flexibility-tops-cost-of-entry-in-recent-polls-of-franchise-prospect-preferences/
13. https://www.franchiseinsights.com/top-ten-business-opportunity-categories/

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Transcript

Welcome And Why Trends Matter

Tom DuFore 0:02

Okay, everyone. Thank you so much for joining us for another edition of our Franchise Your Business podcast and webinar series. My name is Tom Dufour. I'm the founder and CEO of Big Sky Franchise Team. And today's session is our franchise sales and marketing trends. It's been a bit a minute or so since we've done the last one of these. I think it's actually been a couple months. So uh for some reason in the month of June, uh we did not, I don't think we had a chance to get this done. However, here we are uh going over some of the data and information that we'll be sharing and reviewing so that we can make this happen. So uh while I'm going through this, one thing I did want to share is uh if you have not already, please subscribe to our podcast franchise your business or our YouTube channel at BigSky Franchise Team. That's Big Sky Franchise Team. Uh, we would greatly appreciate uh uh subscribe, uh, like and subscribe uh is always welcome. And we certainly appreciate that. So uh with that, we're going to jump into some data. And for those of you, by the way, that are new to us here and new to our session, this session we look at broad macroeconomic data and drill down to some small business data and some franchise specific data and try to take a look at that from the perspective of either selling franchises, marketing franchises, and as well as supporting franchisees and how some of these broad factors may be impacting lead generation, maybe impacting your franchise prospects' uh willingness or interest in purchasing or investing in a franchise, and how this may be impacting your franchisees and your franchise system on more of a broad perspective. So, with that, I'm going to go ahead and share my screen so that uh for those of you that are watching online, you can um you can see uh the reports and the information that we are going to

Manufacturing PMI And What It Signals

Tom DuFore 2:17

walk through. So the first report that we like to walk through is from the Institute for Supply Management. And this is where we take a look at um, this is where we take a look at the manufacturing PMI, as well as the uh, which stands for the purchasing managers index, as well as the services purchasing manager index. This is put out by the Institute for Supply Management. Uh, it's a great organization. They've been producing these reports for quite some time. So, first up is the uh analysis by Susan Spence. She's the chair for of the Institute for Supply Management Manufacturing Business Survey. And it shows that manufacturing PMI is at 53.3% for the month of June. So it reads the U.S. manufacturing uh sector expanded uh for in June for the sixth straight month following a 10-month period of contraction. So uh registering at 53.3%, a decrease of 0.7 percentage point compared to May. Of the five sub-indexes that directly factor into manufacturing PMI, four were in expansion territory and one uh one more than in May. The employment index stayed in contraction, but improved compared to May. So you can see this over the last two and a half years. It goes all the way back to 2024, uh into 2025, where 24 was below the manufacturing breakeven line and even dipped below the overall economy break-even line. Uh, 2025 hovered right in between those. Um, between the economy breakeven and the manufacturing breakeven. And this year we're seeing a surge. And what I really like about the manufacturing PMI is that the manufacturing PMI manufacturing tends to be a leading indicator. So this first half of the year that manufacturing has been up and accelerating, that generally, uh in my opinion, will bode well for the other parts of the economy. We'll start to see that impacting and kind of pulling some of these other segments and industries along. Uh, so that to me is a good bellwether uh indicator for

Services PMI And GDP Implications

Tom DuFore 4:41

the future. Okay, now for the services purchasing managers index, this analysis was done by Steve Miller, the chair of the Institute for Supply Management Services Business Survey. And we look here, it reads in June, the services PMI registered uh 54%, uh 0.9 percentage point above its 12-month moving average of 53.1%. A reading above 50% indicates the services economy sector economy is generally expanding. Below 50% indicates it is generally contracting. The past relationship between the services PMI and the overall economy indicates that the services PMI for June corresponds to a 1.9 percentage point increase in real gross domestic product on an annualized basis. So you can see dating back for two and a half years, similar to the previous report. You can see in 2024 there were big zigs and zags that were occurring. In 2025, it was kind of dipping down low, hitting that services break-even line, and then starting to come up toward the end of the year. And then we see it's hovered and bidden. Uh we had a little blip in that looks like back in February, but for the most part, kind relatively flat. You can almost see a trend line there from the start of the year uh through 2026, kind of generally trending up just a smidge, but relatively flat is what it looks like, just visually looking at it here. Uh, again, so what does this mean? Well, uh to me, what this is saying is that we should start to see and should be seeing that uh manufactur that uh uh uh the broad uh economy, uh despite some of the news headlines you might see, these data points to me are positive in indicators that there's a lot more substance underneath uh what might be shown uh in some of the news headlines and other things you might be reading that that might put uh might be saying the uh economy might be doing otherwise. I just find this data very compelling and interesting uh to indicate that it looks pretty pretty optimistic to me, compared, especially compared to the last two years. When I look back at the manufacturing here that was low or below uh numbers, it just was muddling along, kind of like almost like it was just kind of uh felt like there was a uh you know, like walking through mud or uh um uh you know, like a little drag on the on a on a on a boat or on a on a plane or something, where it's just kind of pull feels like it's kind of almost being held back or constrained. And now this year we're seeing in manufacturing as well as services, uh, we're starting to see it seems like that that weight is coming off here. Um okay, next we're gonna take a look at the United States unemployment rate. Oh, let me tie this back one quick thing on the services PMI and uh manufacturing PMI.

How Macro Data Hits Franchise Leads

Tom DuFore 7:38

One thing I just want to tie this back on is for franchise lead generation, franchise sales. So uh what this likely indicates is you likely, if you're in uh actively marketing, will find that it's been a little bit easier this year to find leads as opposed to the last year or the previous year, uh is what you would are probably experiencing in franchise sales. It's a little bit easier, and the candidates are likely, just based off of this initial data here, likely progressing through the sales process maybe a little bit farther before they fall out, or a little more people are more seriously engaged in conversations with you. So you're finding uh uh my my hunches uh for franchise development professionals and for franchise marketers, you're probably finding uh higher number of quality, uh more quality leads are also coming through. Okay, um, so that that would be my hunch based on the data. I can verify anecdotally, uh, just through clients that we work with, that we are seeing and hearing that through uh our clients. Um but again, that that's just anecdotal, but this information to me helps um give you that sentiment. Okay, next up here is the United States unemployment

Unemployment And Hiring Pressure

Tom DuFore 9:01

rate. This is from TradingEconomics.com from the U.S. unemployment rate. And this goes back to June. To look at June, it's at 4.2%. And the head, the headline paragraph here reads the U.S. unemployment rate dropped to 4.2% in June of 2026, down 4.3% in May, and below expectations, as many people left the workforce. The number of unemployed fell by 213,000 to 7.09 million, while total employment declined by 507,000 to 162.26 million. The labor force contracted by 720,000 to 1.6936 million, with the participation rate falling to 61.5%, its lowest since March of 2021. The unemployment rate also dipped to an over four-year low of 59%. The broader U6 employment rate, which includes discouraged and underemployed workers, decreased to 7.9% from 8.1%. So what can we take about this? Well, I think the labor participation rate is uh a much better indicator, just personally, that I like better than the overall unemployment rate. I think the unemployment rate uh leaves a lot, um uh uh does not consider enough factors, in my opinion. Now, at the same time, it's just a nice barometer to take a look at to kind of give you a sense and a summary, and so it's helpful. Um, but what we've seen here in in from the data in June, we saw a lot of people that just stopped looking for jobs or left the um left the uh workforce. Uh, so they're no longer actively participating. And so uh I think that's interesting and uh worth noting. Uh what this means is it likely could be more difficult for franchisees to find qualified workers or employees uh to come help them at their business and to work there. Um, usually when we see an unemployment rate drop, uh usually means it gets a little bit more competitive for some uh for talent in in the marketplace. Uh so anyway, just just worth noting there.

Inflation Cools But Costs Persist

Tom DuFore 11:15

Uh the second now is the U.S. inflation rate. And so it uh this is from TradingEconomics.com, uh, and it's the U.S. inflation rate. And it it reads that the annual inflation rate in the US fell to 3.5% in June of 2026, the first decline in five months compared to 4.2% in May and below forecasts of 3.8%. Uh energy costs increased 15.7 percent, which was below the 23.5% in May as a ceasefire between the U.S. and Iran uh alleviated inflationary pressures from the energy component. Uh so a lot of this, it looks like gasoline prices rose 26.7%, fuel increased, fuel oil increased 42.9%. Inflation also slowed for shelter and food compared to the previous month. The CPI decreased 0.4%, more than forecasts of a 0.1% drop in the largest fall since April of 2020. So uh looks here that that um the these uh gasoline oil um seem to be a driver for these these uh increase in in inflation here uh uh in June. But overall, seeing that come down a little bit is great. Now, the one thing to remember is that monthly inflation compounds, so it's three and a half percent over where it was in the previous month. So when when we look at it, it's looking at the increase. It's uh let me expand this out. So it's three and a half percent in June. Um and uh May's 4.2. So you can see this, and if I'm saying this correctly, so please, if you hear this and I said it wrong, please feel free to correct me or or call me out on it. But this is three and a half percent over uh I don't think it's month over month, it's previous June that it's look three and a half percent over last June. Uh let me read this again. Yeah, maybe it is month, let me see, compared to 4.2% in my May. Okay. Um, so anyway, it's it's showing uh let's see, uh May, June previous was three point eight percent, which uh let's see here. Yeah, 3.8 percent. Interesting. Uh so uh point being that uh this is a step in the right direction, but again, this is this is uh the the idea that inflation compounds because it's just looking at previous data points, whether it was last month or last uh June. I I I'm trying to figure that out here quickly. Um but um anyway, it's uh uh uh important to know that that's over that time period. And so when we look at the next one, it's over the previous time period, so it's constantly uh it's rarely declining, it's almost always going up. So uh just some food for thought. Okay, next up is the University

Consumer Sentiment And Buyer Hesitation

Tom DuFore 14:26

of Michigan uh consumer surveys of consumers, and this is the index of consumer sentiment. And so uh I like to take a look at this. I tend to find that this is a bit of a uh an indicator showing what the sentiment was previously, so it's it's not necessarily a great indicator of where we are at this exact moment. It's tend seems to be a better indicator of where we were maybe two or three months ago, is what I tend to see in this in my interpretation of it. However, nonetheless, it's still a great uh um uh data set or data point to look at to say, well, what are the consumers generally thinking? What are they generally looking at? And so this is the last 10 years data, and you can see here in the last 10 years, this is the lowest points it's been at. It did tick up a little bit this past month from the lowest point it was at over the last 10 years. Uh, but in general, the trend uh since uh basically 2025, you can see it's just kind of you can see a uh if you were to draw a line from the beginning of 25 to right now, it's kind of a decline and almost all the way back to uh early part of 2024. So, you know, over about two years, and there have been some ups and downs, but in general, the trend is showing a decline uh and pretty quickly. So uh we'll see what that continues to look like. So I know I said earlier that you might be getting better leads from the PMI reports, but uh this could mean that uh your the consumers still may uh are are are uh you know maybe uh taking cover a little bit and are going to be a little bit uh harder uh to convince to uh spend their money on whatever goods or services they're they're considering. So recognize that it might still be challenging for your franchisees to generate revenue or for you to generate uh leads um and uh generate um uh new franchise sales uh uh in the uh current climate. Okay, next up, I'll I I'm taking a look here at the uh this is the Vistage uh CEO confidence report. And so I like this,

CEO Confidence And Small Business Index

Tom DuFore 16:47

they do a quarterly confidence report, and this shows um vestige is a collection, it's a mastermind group of generally high performing CEOs and leaders around the country and around the world, even. But um what I like on this is it shows here uh that uh Q2 uh is uh for 2026 is at 84.2 percent. And you can see that back in Q2 of 2025 it was 77.2 percent. So over the last um year, you you can see that we've seen a nice little uh upswing of improving confidence uh uh in the CEOs here. So uh just some food for thought as as you're going through and considering. And uh I think that's a good sign when we see some optimism at the top uh of some of these organizations. Uh as you would likely expect, these leaders and CEOs are generally strategically thinking and looking out on the horizon. So if they're they have tend to have a positive outlook, I think that tends to be a good indicator of what what they foresee happening in their business. Okay, next up is the US Chamber of Commerce produces a small business index survey on a quarterly basis. This is a a summary of this, but you can see here that uh in Q2 of 2025, so a year ago, it was 65.2, uh, and Q2 of this year, it's 66.5. So it's gone up a little bit. However, uh you can see over the last year it it kind of rose in Q3 and then it's declined in Q4, Q1, and Q2, uh kind of trending down. Um, but you can see this dating back all the way to Q2 of 2022. It's kind of these, it's just these little subtle, uh, it's just these little subtle changes, like it almost looks like a wave, you know, just little teeny waves of, but for the most part, very steady and consistent, right between about 60 and 70 on this small business uh index score. Um, you know, the lowest point here was 60 back in uh Q1 of 2023, and the highest point was Q3 of 25 at 72. So it's in a pretty tight um uh window there.

Small Business Challenges Ranked

Tom DuFore 19:18

Okay, uh the other thing I wanted to show were the key challenges. Was it challenges or findings? Oh no, under challenges. Okay. So the biggest challenge is facing small business owners. This is straight from the source. These owners are interviewed and and talking about things. So if you're a franchise or these are things you need to be thinking about uh on how you're going to address these things or talk to these things with your franchise system. On the other hand, if you are a in franchise lead generation or franchise development, uh this these very well could be things that are on the hearts and minds of prospective uh uh franchisees looking to join your system. So the the far above the the highest ranking uh uh item on this chart, it's not even close of what is the biggest challenge facing small business owners? Number one standout is inflation. Inflation costs and the costs of things going up. And so, as a franchise or have a plan on how you're going to help hedge expenses and see if you're able to reduce some. Uh, the number two on this list, and by the way, what uh the percentage of respondents, uh 57% of the respondents said inflation was a concern. The number two is uh data point here is uh revenue, where there are concerns about revenue, and that looks like that's around about 28, 26, 28, somewhere around there. It's my best estimate reading how this chart is laid out. Um, number three on the list this quarter is affording employee benefits in healthcare. Number four is supply chain issues, and then number five and six look like they're basically tied, and that's interest rates and attracting talent, and that looks to be down around about 12%. So the the number one by far is inflation costs and then revenue and then affording employee benefits in healthcare. So uh all of that to say, um, if you're in uh franchising, these are things to be aware of that your your franchisees, they're small businesses too. Most of them are, and so you're likely going to be bumping into this along the way. Okay.

New Business Formations And Demand

Tom DuFore 21:50

Speaking of small business, let's take a look at the number of new business formations. So this is produced, this report's produced by the uh United States. Census Bureau. It was released July 9th, so uh just over a week ago. And here's the report. And what you can see, we can see a big spike here in June that there were a total of 531,423 new business applications filed across the United States. It's a 1.1% increase over last month. Um, and high propensity business applications was 149,714. Um, so uh, you know, I I just keep harping on this, but you look pre-COVID in 20 uh prior to 2020, you can see that it was just starting to trend for a couple years for 2018-19, uh, going into 2020, around about 300,000 um new applications per year, um, or excuse me, per month. Um, then uh you see it shortly after COVID there, 2020 was kind of a big zig and zag mixed in there. But then going forward, 21, 22, uh, 23 into 24, you kind of see it's right around that 400,000-ish new business applications. And then we see in 25 a little dip, and then just kind of this big upswing going from about 400,000 over 500,000 over about an 18-month time window. And I I really like to focus on this because what you see here when we take a look at this is that the um the the uh uh uh new business startup and new business sentiment is on the hearts and minds uh of Americans. Uh, they're starting businesses. So whether they buy your franchise or not, they're looking at they're seriously looking at buying a business. So it or starting a business. So if you're in franchise development in franchise lead generation, any lead that comes in, you have to go in with an assumption that they're serious about starting some kind of business. Might not be yours, but they're serious about it. Okay, speaking of startup sentiment, let's take a look at the

Franchise Startup Sentiment Shifts

Tom DuFore 24:18

franchise insights by franchise ventures. They uh published this report here on July 8th, 2026, so uh about nine days ago. And it uh this is a report by Michael Alston for Franchise Insights, and it shows the startup sentiment softens again in 2026, excuse me, in June of 2026. So it shows uh it reads in the first paragraph after stronger startup sentiment in February through April of 2026, June saw the second month of decreasing optimism as less than half 47.5% of persons exploring franchise ownership agree or strongly agree that now is a good time for startup, down from 52.2 percent in May and 62.2 percent in April. So, uh, what is this showing? Well, this is just showing what the actual sentiment is of buddying entrepreneurs that are saying is now a great time to start the business. Um, and uh, you know, less than half are saying yes. Uh so I think that's worth noting also. Um, so you might see it's a little bit more challenging now. Uh speaking of uh starting the business, let's talk about sources of funding.

Funding Sources Buyers Actually Use

Tom DuFore 25:33

So these are the top three sources of franchise funding according to today's prospects. This is by Michael Alston for Franchise Insights, and this was published June 24th, 2026, and it shows the top three on this uh list. The top three funding sources are the number three by a pretty uh good-sized margin here. Number one is personal savings, just using their own money. Number two is an SBA loan, and number three is a bank or other loan providers. So when I look at this, it makes me think that as a franchise or it's important to have a solution for uh funding to help your franchisees to help support that. And doesn't mean you necessarily have to provide the funding, there are lots of great lenders and uh brokers out there that can help facilitate that. Um, and there are plenty of great ones in franchising. If you'd like referrals over to a few, we're we're happy to share some with you. Uh then uh there was a poll done here to talk about what characteristics are most important to

What Buyers Want And Top Categories

Tom DuFore 26:44

you when starting the business. So this came out July 1st. This is by Michael Alston for Franchise Insights. And so it shows uh the characteristics that are most important to buyers looking to start a franchise, higher earnings potential was number one, followed by flexibility of work schedule, followed by low cost of entry, then ability to work from home. Uh so I found that to be interesting and worth noting. And then our final chart that I always like to show is the top 10 business opportunity categories. And home services is at is the number one in this category. It's at 26%. Number two is business services at 23.9%. Number three is senior and healthcare at 11.7%. Number four is cleaning and maintenance at 9.1%. Uh, let's see, number five is child related at 6.2%. Number six is food and restaurant at 5.1%, number seven is retail at 4.6%, number eight is education at 3.3%, number nine is vending at 1.7%, and number 10 is automotive at 1.6%. And so what this means, in my opinion, when I look at these, is that if you tend to be in one of these top five categories, generally speaking, it's easier for you to find uh uh leads of potential franchise candidates. Um and and at least in the top 10, you know, you're it's gonna be easier. Uh, top five is going to be uh the easiest, is is what I think. And and looking at that. So um that's our session today,

Subscribe, Review, And Free Consult

Tom DuFore 28:29

folks. Um, I I'd love, I'd I'd love for you to like and subscribe to the podcast if you haven't done so already. Please leave us a review. We always appreciate that. And if if you're ready to talk about franchising your business or you need help with your franchise system, hey, reach out to Big Sky Franchise Team. Uh we offer a free, no obligation consultation and for you to speak with someone on our team or schedule some time with me to see how we can support your efforts. Thank you so much for being here. I really appreciate it, and have a great weekend.