The Analog Comeback Is the Best News Franchising Has Had in a Decade

By Joad Lopez

Joad Lopez explains why AI could make physical franchise experiences more valuable.

As AI accelerates the digitization of commerce, physical experience is becoming more valuable, and the franchise model is structurally built to capture that shift.

The conventional narrative about the future of retail positions physical and digital as opposing forces. One expanding, one contracting. One winning, one losing.

The data does not support that narrative. What it shows instead is something more interesting and considerably more relevant for international franchise operators: the acceleration of digital commerce is not replacing physical experience. It is making it more valuable.

This is the defining commercial dynamic of the next decade. And the franchise model, properly understood and properly built, is positioned to be one of its primary beneficiaries.

The Numbers Are Already Moving

This is not a forecast. The shift is measurable now.

Global in-store retail sales are projected to reach $25.7 trillion in 2026, representing 3.35% growth year on year. Physical stores still account for approximately 84% of total retail sales worldwide. In the United States alone, Coresight Research forecasts more than 5,500 new store openings in 2026, up 4.4% year on year. Net closures still outpace openings in that market, but the direction of travel on new investment is consistent: physical retail is being built, not abandoned.

The regional picture adds important texture for international franchise operators specifically.

Asia Pacific is leading physical retail growth at 5% real spending growth, driven by markets where mobile commerce and physical experience have never been positioned as alternatives. Southeast Asia, with some of the highest mobile commerce penetration in the world, is simultaneously one of the most active markets for differentiated physical retail investment. Singapore, Malaysia, Indonesia, and Thailand are markets where digital payment and digital ordering became normalised faster than almost anywhere else. They are also markets where a genuinely differentiated physical experience commands a premium that would surprise many Western franchisors.

Europe is showing more modest but consistent growth of 2 to 3%. The Colliers Global Retail 2026 Outlook found that across European markets, shopping centres and physical retail continue to serve as the primary vehicle for brand experience, loyalty building, and community. CBRE’s European Retail Outlook 2026 noted that experiential retail is now expanding beyond London and Paris into secondary cities across the continent.

The consumer data reinforces the investment data. A 2025 Euromonitor International survey found that 54% of connected consumers globally prefer shopping in physical stores that deliver an engaging, immersive experience. A 2026 Placer.ai survey found that more than 55% of retail industry professionals expressed confidence in brick-and-mortar performance. A Retail Brew survey found that 62% of retailers are investing in physical stores specifically to strengthen brand perception, with 58% citing loyalty building. Conversion ranked lower than both.

That last finding is significant. Retailers are not opening physical stores primarily to sell product. They are opening them to build the relationship that makes every other channel perform better. The physical location is becoming the brand engine. The experience anchor. The reason a customer chooses one brand over another across every touchpoint.

Why the Experiential Hunger Is Not Nostalgia

The temptation is to read the growth in physical experience as a nostalgic reaction. People retreating from complexity. A demographic correction. A temporary sentiment.

The evidence does not support that reading either.

Google search interest in analog radio reached record highs in 2026. Searches for live events, music festivals, in-person fitness, and community experiences have grown consistently in markets that are simultaneously more digitally connected than at any point in history. Running clubs are expanding in cities with the highest smartphone penetration. Vinyl sales are growing in markets where streaming has the deepest market share.

These are not contradictory behaviours. They are the same behaviour expressing itself across different categories. The more time people spend in digital environments, the more acutely they seek the specific thing that digital cannot replicate: physical presence, sensory richness, the feeling of being in a room that has its own atmosphere and demands their full attention.

The structural explanation is straightforward. As AI and digital interfaces handle an increasing share of transactional commerce, physical presence becomes a scarce resource rather than a default one. The experience of going somewhere, of that somewhere being genuinely worth going to, acquires a value premium that transactional retail never generated.

This is not a nostalgia cycle. It is a supply and demand dynamic playing out across consumer markets globally. Digital abundance is creating physical scarcity. And scarcity, in commercial terms, creates opportunity.

The Brands Already Building on This

The most instructive examples of this dynamic are not luxury conglomerates, though they are participating. Coach opened its first café in Jakarta in 2024, then four in the United States and over a dozen internationally, reporting double to triple digit sales increases at stores where the café was added. Ralph Lauren has operated branded cafés since 2014 across London, Barcelona, Hong Kong, and Singapore. Capital One now operates sixty-five community cafés in the United States. These expansions are not hospitality experiments. They are strategic investments in physical presence as a brand-building mechanism, made by organisations that have studied the data on what drives loyalty at scale.

The more instructive signal for international franchising specifically comes from founder-led brands building on this insight from the ground up.

Pickl is a Dubai-born burger brand founded in 2019. No preservatives, no hormones, no antibiotics. Grain-fed beef, fresh fried chicken, plant-based options. It won Best Burger at the Time Out Dubai Restaurant Awards and Best Fried Chicken and Restaurant of the Year at the Deliveroo Restaurant Awards in the same year. It now operates 50 locations across the UAE with franchise partners in Bahrain, Qatar, Saudi Arabia, Egypt, and Kuwait. And targeting 1000 restaurants in the coming years. Pickl is not selling fast food. It is selling the feeling of a neighbourhood burger joint done properly. Quality and consistency in a region where the experiential standard is high and consumers know the difference. That feeling has proven portable across cultures and borders because it was built around something real from the start.

Altipeak International Holdings, an Irish franchise that began franchising in 2024, is built around altitude training and recovery: cold water immersion, hyperbaric therapy, experiences that are completely analog in their core delivery. No screen can replicate what happens in an Altipeak facility. The brand is expanding across the UK precisely because it is offering something that the digitally saturated fitness market cannot produce algorithmically.

These brands are not outliers. They are early indicators of what the franchise category is becoming in markets that have digitised fastest. The brands that understand they are selling an experience rather than a product are attracting the most engaged partners and building the most durable customer loyalty.

The International Dimension: Where the Opportunity Is Largest

The experiential hunger is not evenly distributed. It is most acute in the markets that have digitised fastest. And it is structurally different in the Gulf markets, where physical retail never needed a revival because it never declined.

In the Gulf, retail is social infrastructure. The mall in Kuwait, Qatar, or Saudi Arabia is not primarily a place to buy things. It is where community happens. Where families spend extended time. Where the brand that earns its place in that social fabric becomes embedded in something far more durable than a transaction. The international franchisor entering these markets with a genuinely experiential brand is not competing against digital convenience. They are participating in a social ritual that digital commerce has never threatened and shows no signs of threatening.

The strategic implication for international franchise expansion is specific. The operator who has built a genuinely experiential brand, who understands clearly what feeling they are creating and has built the operational architecture to protect that feeling across cultural contexts, is entering the majority of active international franchise markets at exactly the right moment.

The consumer appetite is demonstrably there. The investment infrastructure for physical expansion is being built. The competitive field of genuinely experiential international brands is still narrow enough that doing it properly creates real and durable market position.

What This Demands of Franchise Systems

The franchise model is, at its structural core, a system for replicating an experience. Not a product. Not a transaction. An experience.

The brands that have scaled most successfully across borders have always understood this. Their operational documentation exists in service of protecting a feeling, not just standardising a process. Their partner selection criteria are built around finding operators who understand what the brand is trying to create, not just operators with capital and location access. Their launch frameworks exist because the first 90 days of operation are when the experience either takes root in a new market or does not.

The brands that have struggled internationally are, in many cases, the ones that treated the franchise as a product distribution system. The experience was assumed. The process was documented. And when the process arrived in a new cultural context without the experience underneath it, it generated novelty and then silence. The opening weekend looked like success. The footfall decline six months later was the actual result.

In a commercial environment where AI handles an increasing share of transactional commerce, experiential brands are not competing against other experiential brands. They are competing against the friction of leaving the house. Against the phone. Against the seamless convenience of a digital transaction. The only reason a customer chooses to leave that convenience and come to a physical space is if that physical space gives them something the phone genuinely cannot.

That is not a small ask. It is the entire competitive game for physical retail in the next decade.

The franchise model, built around the replication of a genuine experience, delivered by partners who understand what they are protecting, supported by systems designed to translate that experience across cultural contexts, is structurally equipped to win that game.

The question is not whether the opportunity exists. The data makes clear that it does. The question is whether the founders running these brands have built the operational discipline to deliver on it consistently, across markets, at scale.

Because the middle is disappearing. Average physical experience and average digital both face the same competitive pressure. What remains is exceptional.

And exceptional physical experience, delivered with operational discipline across borders, is exactly what the franchise model was designed to produce.

Joad Lopez is a Barcelona-based International Expansion Advisor, Founder of JL International, and author of Before You Sign Anything: A Founder’s Guide to International Franchise Expansion. He has been the founder, the franchisor, and the scaler. 47 deals, 8 countries, 3 continents. Today he helps founders avoid the expensive mistakes he lived through. He is also a global speaker at events including the Saudi Franchise Expo and the IFA International Franchise Show in London, and the Franchise Expo Germany. joadlopez.com