The franchise industry should continue to experience smooth economic sailing ahead, according to a new report out by franchise research and advisory company FRANdata. The study found the number of franchise establishments is expected to increase by 1.5% to 785,316. Franchise employment is forecast to increase by 2.8% to 8.67 million, adding a total of 232 thousand jobs. Franchise output in nominal dollars is projected to improve by 4.1% to $819.57 billion in 2020.
Franchising will continue to play a major role as a driver for growth in our economy.
“We forecast that most franchise businesses will sustain robust growth in 2020, especially in the personal services, quick service, and full-service restaurant segments,” says Darrell Johnson, CEO of FRANdata. “Franchising will continue to play a major role as a driver for growth in our economy.”
Franchise businesses influence state economies by creating jobs, increasing output, and contributing to GDP growth. The report says the following states will see the most franchise establishments and employment growth in 2020: Texas, Colorado, Arkansas, Florida, Idaho, Tennessee, Georgia, North Carolina, South Carolina, and Nevada. Overall, franchise business development will continue to increase in the South and West due to growing populations, state-level economic policies, and favorable business tax climates.
To study the impact of franchising to the economy, FRANdata examined macroeconomic trends and the historical performance of all franchise brands operating in the United States over a ten-year period and across all major industries. For state level franchising activity, FRANdata analysts calculated each state’s franchise establishments, employment, and output for a 3-year and estimated each state’s contributions to the franchise industry for 2019 and forecasted for 2020.
You can access the full report here: https://franchiseeconomy.com/assets/26604.pdf.
Reprinted from Franchise.com, February 2020