$ 343 $ 13,332
AFDR
Tracking Cost Per Lead & Sale
2025
2024
2023
2022
2021
49 %
48 %
46 %
44 %
50 %
50 %
58 %
56 %
59 %
63 %
0 10 20 30 40 50 60 70 80
Cost Per Lead Cost Per Sale
Cost and conversion
Despite a wealth of data available to franchisors, the AFDR continues to uncover that only about half of franchisors track fundamental metrics such as cost per lead or cost per sale.
In 2025, 58 % of respondents reported tracking their cost per lead, up from 56 % in 2024, while fewer than half( 49 %) monitored cost per sale.
During the AFDR presentation at FLDC, Courtney asked the audience for a show of hands on who tracks these key numbers. To those who didn’ t raise their hands, he advised,“ Please talk to someone who has their hand up and see how you can apply this to your budgeting process. Remember: We are feeding success and starving failure.”
The need for discipline is becoming more critical and costly. The average cost per lead has risen to $ 351, up from $ 271 in 2024. The price to secure each new franchisee jumped from $ 13,757 in 2024 to $ 17,550 in 2025. Those numbers are driven by inflation and an industry-wide push for higherquality leads.
“ If you’ re getting smart and really accurate about your lead-generation programs, and you’ re reaching your target audience with your messaging, sometimes, it costs a little bit more to get that person,” Phibbs noted.“ If you’ ve got a good lead and it moves forward, and you close the deal, then it’ s money well spent.“
Sales closing ratios
Tracking conversion rates across the sales funnel can offer insight into the effectiveness of your franchise development team. The survey reports the following sales ratios in 2025:
• Leads to sales. 2 %, a slight decrease from 2.3 % in 2024 but up from 1.8 % in 2023
• Qualified leads to sales. 12 %, up from 10 % in 2024 and a dip from 13 % in 2023
40 | Franchise Update | Issue 4, 2025
• Applications to sales. 32 %, up from 28 % in 2024 and 31 % in 2023
• Discovery days to sales. 75 %, up from 65 % in 2024 and 73 % in 2023.
“ You really need, as a development person, to figure out when people are entering your process and where they are exiting in your process,” Courtney said.“ If you’ re really managing your funnel this deeply, you’ ll find that you can fix things, correct things, or move on.”
Long road to a deal
The report underscores that franchise sales for many brands are a marathon, not a sprint. The average journey from initial lead to signed agreement has stretched to 24 weeks, which Courtney suggested is a lagging indicator of economic indecision. Phibbs advised franchisors to consider front-loading 2026 budgets to generate leads and move them through the sales funnel earlier to combat the slowdown.
“ there’ s a place for relevant goals, accomplished goals, or achievable goals versus reaching for the stars and then saying,‘ Oh, we didn’ t quite hit it.’”
Brokers and balance
Brokers continue to play a significant role in franchise development. Of the franchisors surveyed, 52 % use brokers. That statistic has remained steady over the past five years.
Among those who use brokers, 70 % secured a sale through a broker in the past year with an overall close rate of 16 %. Most of those deals come from service brands and midrange investments between $ 100,001 and $ 250,000.
Success comes at a cost. Given that the average broker-sourced lead costs $ 4,057, the presentation highlighted the need for a strategic approach. The key is to find the sweet spot, Courtney advised, urging brands to define the ideal number of deals they want to flow from this channel. Franchise development teams that find the right balance continue to add significant value.
Realistic goals
Franchisors were asked to share input on goal setting. Only about 30 % of those queried reported outperforming their 2025 franchise recruiting goals, a modest figure at first glance. But, as Phibbs pointed out, there’ s more to the story. The data suggest that brands setting data-informed, realistic targets are delivering stronger results than brands that don’ t. The study found that 71 % of brands that reported lower goals exceeded their targets.
70 %
Cost Per Lead( nonbroker)
Higher
30 %
Lower
$ 343 $ 13,332
Cost Per Sale( nonbroker)
“ There’ s a place for relevant goals, accomplished goals, or achievable goals versus reaching for the stars and then saying,‘ Oh, we didn’ t quite hit it,’” Phibbs said.
High-performing franchisors who exceeded their goals reported an average cost per lead of $ 343( nonbroker). Cost per sale( nonbroker) was $ 13,332.
“ Of course, they are doing more deals, so hopefully, that’ s going to drive their cost per acquisition down,” Courtney said.
AI arrives
The 2026 AFDR introduces a new benchmark to measure the arrival of artificial intelligence( AI) in franchise development, revealing an industry in the early stages of actively testing its potential.
Adoption is rapidly emerging— 52 % of brands are already using AI tools— but confidence is lagging. Roughly a quarter of leaders feel“ very confident” in their use of the technology. Brands are primarily deploying AI to improve efficiency, handle initial contact tasks, and streamline the sales process. The most common uses are:
• Email personalization( 59 %)
• AI chatbots( 44 %)
• Market analysis( 44 %)
• Candidate screening( 9 %)