Originally published in Franchising.com

By James Doyle, CMO, PIRTEK USA & PIRTEK Canada

The franchise landscape has come to a fork in the road.

In 2025, thousands of retail locations closed across the United States, affecting everything from legacy department stores to quick-service restaurants. Rising labor costs, compressed margins, supply chain volatility, and shifts in consumer spending habits forced many discretionary retail brands to reassess their footprints. For franchise candidates watching from the sidelines, the message was unmistakable: not all brick-and-mortar models are created equal.

But the retail story isn’t entirely one of decline. It’s one of recalibration.

What we’re seeing instead is a shift in investor interest away from discretionary retail and toward essential, service-driven franchise models. Those that are tied to infrastructure, maintenance, logistics, and recurring B2B demand are performing strongly. In uncertain economic cycles, franchise buyers increasingly prioritize durability over trendiness. They want models rooted in necessity rather than novelty.

Why essential services are outperforming

Essential-service franchises operate differently from discretionary retail in three key ways:

1. Demand is needs-based, not preference-based
When equipment fails, pipes burst, systems break down, or critical infrastructure requires maintenance, the work must be done regardless of consumer confidence. These services are tied to uptime, safety, and continuity, and not impulse purchases.

2. Revenue is diversified across industries
Many service brands operate in B2B environments, supporting construction, manufacturing, transportation, healthcare, or utilities. That diversification buffers individual market fluctuations and reduces reliance on walk-in consumer traffic.

3. Operating models are more flexible
Mobile-first or hybrid models allow franchisees to scale without the same overhead pressures traditional retail faces. In many cases, physical storefronts serve as operational hubs rather than traffic-dependent retail environments.

This flexibility is where we’re seeing the most evolution.

The strength of tiered franchise models

One of the most resilient structures emerging in franchising is the tiered model, which combines mobile service with a physical location. Rather than relying solely on retail foot traffic, the storefront becomes an efficiency center: inventory management, dispatch coordination, and customer service support. Revenue generation happens both in the field and in-store.

This structure allows brands to benefit from local presence while mitigating some of the exposure traditional retailers face.

In my category with Pirtek, hydraulic and industrial hose maintenance and replacement are key for industrial service sectors. By operating both mobile service units and retail service centers, we make for a more effective partner to our customers. The retail footprint enhances customer convenience and accessibility, while mobile operations deliver fast, on-site service to our customers to get them back up and running fast. That balance has allowed certain service brands to expand even as broader retail categories contract.

The lesson for franchisors isn’t that retail is obsolete, but rather that retail must serve a strategic operational purpose, not simply exist as a point of sale.

What franchise buyers are prioritizing in 2026

Heading into the second half of 2026, serious franchise candidates are asking more disciplined questions:

Is the brand’s core service tied to essential demand?
How exposed is the model to consumer spending swings?
What percentage of revenue is recurring or B2B?
Can the business scale without significant fixed-cost expansion?
Does the physical location drive revenue or just support it?

There is also greater scrutiny around unit economics, territory strength, and operational support systems. Buyers are less motivated by “hot” concepts and more focused on businesses with proven staying power.

What this signals for the broader franchise sector

The retail closures of 2025 were not simply a downturn; they were a sorting mechanism. Concepts overly reliant on discretionary spending, promotional pricing, or shrinking foot traffic faced significant pressure. Meanwhile, brands built around service, maintenance, and operational necessity continued to expand.

This does not mean retail has no future. It means retail must evolve. Brands that integrate service components, diversify revenue streams, and adopt flexible operating structures will be best positioned for long-term growth.

For franchisors, the takeaway is clear: resilience must be built into the model. For franchisees and prospects, durability should outweigh trend appeal.

As the market moves deeper into 2026, the strongest growth stories will likely come from brands that keep businesses, homes, and communities operating, and not just selling to them.

James Doyle is chief marketing officer of Pirtek USA and Pirtek Canada.