What the Latest Fed Rate Cut Means for Franchising and Things You Can Do Right Now
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From Temple, Texas, live. In our most recent meeting, Art Coley, CEO of CGI Franchise, talked with a financial advisor about the most recent Federal Reserve rate cut and, more importantly, what franchisors and franchisees can do with this information. Here are the key takeaways from the session:
Why franchise businesses do well in tight markets
Art made a point that has been proven over the years: brands are made when things get tough. When capital costs a little more and getting new customers is harder, weak models go away and disciplined operators win. Now is the time to ask:
Are our unit economics really in the top quartile of our field?
• Is our lead generation stable and varied?
• Are we really world-class at the first unit before we ask for the second?
This is also when lenders look closely at the franchisor, not just the candidate. Your Item 19 discipline, onboarding results, and system-wide margins are more important than ever.
Talent Tailwinds You Can Use
There are two groups of candidates with a lot of potential that are getting bigger:
1. Baby Boomer owners retiring. A lot of people are ready to leave solid, well-run independent businesses. Opportunity for roll-ins, conversions, and expanding into new areas, all while keeping the same cash flow.
2. Operators who are well-funded and well-educated because they lost their jobs in tech or government. A lot of them have money (401k or stock plans), are professional, and are ready for the next step in their lives. They react to structured playbooks and help from brands.
How to send them a message:
• For independent businesses owned by retirees: staff safety, preservation of local legacy, back-office help, and national marketing.
• For transitions from corporate to owner: clear ROI, proven systems, and a ramp plan (with conservative underwriting).
Strategies for Existing Businesses That Win Market Share
To ensure recruitment delivers against the brand’s overall business goals, alignment at every level is critical. Miles When growth slows down, roll-up plays shine:
• Conversion: Get someone to sign up for your brand and become a customer—this is the quickest way to get more people to know about your brand.
• Acquire & Convert: Help a new franchisee buy an independent business and then change its name.
• Tuck-In: Your current franchisee buys an independent business nearby and adds its operations to their own.
• Bolt-On: Adding a complementary franchise, like property management to a real estate brokerage, increases the share of wallet.
Art’s experience running large-scale conversion programs (like a previous roll-up that added 50+ independents and tens of millions in system sales during a time of tight credit) shows how powerful this lever can be when you put it to use. That means putting together a package that includes a step-by-step playbook, a list of vetted lender partners, integration SOPs, a timeline for brand standards, and a plan for rebranding in 90 days.
AI, Workflows, and the Real World of Work
You can’t just “throw more bodies” at problems when there aren’t as many new workers coming into the workforce. The financial advisor’s advice was similar to something we see every day in ROS®:
• AI is not a silver bullet; it is a force multiplier. Use it to make screenings the same, summarize interviews, bring up signals (like coachability and values alignment), and make sure people follow through. This will free up people to build relationships.
• The process is profit. Turnkey, documented workflows (like lead response, appointment setting, Discovery Day, and onboarding) let you do more work without hiring more people.
You won’t lose to AI; you’ll lose to the team that uses AI in a strict process.
Short-term opportunities:
1. Write a post explaining the rate cut and linking to a gated “Readiness Kit.”
2. Send a franchisee town hall deck that shows where the rates are, when the lender panel will be, and what to get ready for.
3. Start a two-track nurture for your target personas, which are retiring owners and corporate operators.
4. Create a strategy pod for your existing business that includes sales, operations, legal, and finance, with a goal of converting or tucking in 90% of leads within 90 days.
5. Check your lead-to-Discovery Day process in ROS® by looking at response times and the quality of the handoff. Use one AI tool to help you, like a scorecard for interview summaries.
Mid-term opportunities: You should hold a Lender Roundtable (webinar) with 2–3 financing partners, such as the SBA, ROBS/401(k) funding, HELOC/private banking, and other relevant sources.
• Test one acquisition (either tuck-in or convert) and make the playbook public (as a case study).
• Share a compliance-reviewed KPI dashboard with your network. Being open and honest will help you earn trust.
A Word from Art
Great companies don’t become great when things are easy; they become great when the market gets tough. Franchising gives people a chance to succeed with a system that has worked before, and it’s our job to keep making that system better.
Final Thoughts
There is never a “perfect” time to start or grow a business. But there are times when being ready pays off big time. This is one of those times when rates are slowly going down, people are looking for returns, and talent is moving around.
The Recruitment Operating System® (ROS®) is a proven system to help franchise companies implement and execute a predictable, repeatable, and sustainable franchisee recruitment program.
Based in Temple, Texas, we work with brands worldwide.
