“At all levels, local franchise businesses provide opportunities for economic and professional advancement,” said the IFA President and CEO. Matthew Haller. “For aspiring entrepreneurs, franchising removes barriers so they can more easily open their own business. On the other side of the Great Resignation, there is a great reimagining that has encouraged white-collar workers and store employees become local business owners.”
Franchises pay nearly 3% more than similar independent businesses; 65% of them offer health insurance, well above the national average of 49%; and more than three-quarters offer vacation, sick leave and other benefits, according to a study by Oxford Economics.
The 2022 Franchise Economic Outlook is the IFA’s annual study detailing the performance of the franchise industry for the past year and the projected economic outlook for the year ahead, as well as an in-depth outlook on the state for all 50 states and washington d.c.
Key highlights from the 2022 report include:
- After the 2020 closures, franchise production rebounded more than 16% in 2021, reaching nearly $788 billion output.
- Franchise growth is expected to level off in 2022, increasing 2.2% to a total of 792,014 franchised locations, 17,000 more than in 2021.
- The contribution of franchise GDP to the overall economy will remain stable at 3% in 2022, but the growth rate is expected to slow to 5.7%, still higher than the pre-pandemic level.
- In 2021, franchise employment increased by 8.8%, adding more than 46,000 jobs per month. Franchise employment is expected to grow at a slightly lower rate of 3.1% to a total of 8.5 million jobs, back to pre-pandemic levels, a net gain of up to 300,000 jobs.
- Franchise establishments in the personal services sector are expected to lead growth in 2022, followed by commercial and residential services.
At the state and regional level, the report shows that states have experienced different rates of economic recovery due to disparities in business climates, migration patterns and shifts in consumer preferences. At the state level, it is expected that:
- Western and Southern states will experience the fastest upward trajectory of franchise business growth in 2022.
- The Southeast region, which has the highest concentration of franchises in the United States, will have approximately 231,500 total establishments by 2022, employing 2.6 million workers and contributing $235.9 billion of production to the US economy.
- The top 10 states for franchise growth in 2022 are expected to be: Texas, Florida, Arizona, Caroline from the south, Idaho, Tennessee, North Carolina, Utah, Montanaand Nebraska.
About the International Franchise Association:
Celebrating over 60 years of excellence, education and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. The IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance, and promote franchising and the approximately 775,000 franchised establishments that support nearly 8.2 million direct jobs. , $787.7 billion of economic output for the US economy, and nearly 3 percent of gross domestic product (GDP). IFA members include franchise companies in more than 300 different business format categories, individual franchisees and companies that support the industry in marketing, legal, technology and business development.
Catherine Knight Patterson
SOURCE International Franchise Association