The Canadian Franchise Association (CFA) is kicking off 2026 with an inside look at the trends reshaping two powerhouse sectors of franchising—foodservice and retail.
With the franchise industry projected to be worth $133.3 billion by 2026, these categories are entering a new era marked by accelerating innovation and fast-changing consumer expectations, said the Association.
The Franchise Canada Show is taking place February 7-8 in Toronto.
Here’s its Foodservice Industry Trends:
Popular Categories
- Full-Service Restaurants: Restaurant brands continue to attract franchisees with scalable operations, steady revenue, and innovative menu offerings. As more consumers prioritize in-person experiences, dining out in full-service restaurants continues to be popular.
- Culturally Rooted Brands: Concepts rooted in a founder’s personal, regional, or cultural background are gaining momentum, offering authenticity that resonates with customers.
Sector-Specific Trends to Watch
- Fusion Menus: Combining different cuisines allows brands to stand out while appealing to a wider audience. Fusion menu items are growing in popularity, especially with younger demographics who are drawn to unique menu offerings.
- AI & Smart Operations: Franchise systems are increasingly using AI to streamline operations, from optimizing ordering and inventory to analyzing consumer feedback. These tools help franchisees run more efficiently, make data-driven decisions, and focus on growth.
Retail Industry Trends:
Popular Categories
- Pet Care: Franchises offering pet products and services continue to see strong demand, as Canadians increasingly prioritize the health and well-being of their pets. Rising pet ownership, a willingness to spend on premium products and services, and the humanization of pets are driving growth in this sector, making it a resilient and high-potential category for franchisees.
- Health & Fitness: Wellness focused franchises remain popular, attracting consumers looking for holistic wellness, and lifestyle experiences. Growing awareness of health and mental well-being, combined with increased disposable income for lifestyle and self-care services, is fueling strong demand in this sector. Wellness brands are harnessing technology to deliver products and services, from infrared saunas to video fitness classes to IV drips.
Sector-Specific Trends to Watch
- Eco-Friendly Practices: Sustainability is becoming a major factor in where people spend their money. Consumers, particularly younger generations, are increasingly drawn to sustainable and environmentally conscious brands, creating opportunities for franchisees to align with these values.
- Experience-Driven Retail: Retail concepts are focusing on interactive and memorable experiences to build loyalty and stand out in competitive markets.
- Tech-Enabled Shopping: From e-commerce platforms and mobile apps to digital loyalty programs and AI-driven insights, technology is helping franchisees improve efficiency, optimize operations, and enhance customer experience.
Looking ahead, foodservice and retail remain some of the most attractive sectors for franchise investment, offering strong consumer demand, opportunities for innovation, and room to grow, says the Association.
Sherry McNeil, President & CEO at the Canadian Franchise Association, said franchising is never a dull business.
“It’s changing, evolving, innovating each and every day, right from frontline customer level all the way to the head office level. And I think the one thing people sometimes forget is that franchising is very integrated into the Canadian lifestyle,” she said.
“They say the average Canadian deals with a franchise location three to five times a day. When you think about it, where did I get my coffee in the morning? Did I drop off some dry cleaning? Did I drop my child at daycare? Where did I get lunch? Did I get my dog groomed, et cetera? Did I buy dinner to take home?”
McNeil said some of the trends remain very constant. Retail and restaurants are still very strong. And customers are looking for an experience-driven opportunity.
“If I’m a consumer and I’m going to a restaurant, I’m going to a restaurant owned and operated by a local small business owner who lives, works, and contributes to that community. But they want that social connection. They want a memorable experience if it’s a casual dining experience,” added McNeil.
“And we’re seeing authenticity as a key differentiator as a trend that’s coming forward. So the restaurant itself is a brand, but it’s associated with the person who lives in the community, that franchisee and maybe what the franchisee supports in that community, or how their kids play hockey with the customers’ children, et cetera. They’re supporting the food bank, their charity of choice. But the customer experience is also being tied back now to the founders. What’s the founder’s history, in some cases? So we’re seeing that rise as well.”
McNeil said consumers are looking for a different type of experience.
“Younger demographics want to explore unique flavours, innovative food formats, non-traditional food combinations.”
Franchisees are looking for concepts that have strong operational performance, a compelling customer experience they can deliver on.
“But customers are also looking for convenience. They want a location that’s not too far from their home or their kids’ schools, so they can drop off whatever it is or pick up lunch on their way to and from their day-to-day lives. Some of that remains very static. Convenience has always been important, but it’s becoming more so. And we’re seeing new franchisees gravitate toward strong brands or brands they think are unique, with unique touchpoints to the consumer.”
People should do a self-assessment if thinking of becoming a franchise owner
McNeil said not everyone is cut out to be a franchise owner.
“You have to do a self-assessment and decide: do I want to be in business for myself but not by myself? If so, franchising is a great route because you have the support of the franchisor and all the other franchisees who are living and breathing the same brand. You’re experiencing many of the same challenges, and you can share best practices, leverage learnings, or learn how to drive same-store sales or improve customer experience. But if you’re not someone who is good at following systems and routines, or learning from others, if you’re a self-starter who wants to make it on your own, franchising might not be the right path,” she said.
“But because there are so many different types of franchises out there, new and emerging franchises can be an opportunity for those with a high entrepreneurial drive who want to be on the ground floor with the founder, testing products, making a difference, providing feedback as they grow from five locations to 10, to 15, to 20.
“That entrepreneurial, pioneering spirit can really thrive there. That person might not be a great fit for a brand that already has 1,100 units, where systems, routines, and processes are very established. To me, it’s really about self-assessment and self-awareness and where you fit best among the opportunities available through franchising. There is a franchise for everyone.”
McNeil said she encourages everyone to do their due diligence and research.
“That self-assessment piece is really important to find the right fit. Franchising is about being in business for yourself but not by yourself. But I would caution people to watch for fraud. Fraud exists everywhere. People or companies claiming to be franchisors. Please do your due diligence to ensure they are a franchisor. Just because a company has a website doesn’t mean they’re a franchisor.”
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