Good news for business in 2022.
The International Franchise Association released its 2022 Franchising Economic Outlook showing that franchising is leading the economic recovery in the United States. The report highlights exceptional 2021 job and business growth across all franchising sectors, ranging personal services to lodging. The data indicates 2022 will be another strong year for job and wage growth in the dynamic, local-focused franchising industry.
“At every level, local franchise businesses offer opportunities for economic and career advancement,” said IFA President and CEO Matthew Haller in a news release. “For aspiring entrepreneurs, franchising removes barriers so they can more easily open their own businesses. On the other side of the Great Resignation is a great reimagination that has emboldened white collar workers and store employees alike to become local business owners.”
Franchises pay nearly 3 percent higher wages than similar independent companies; 65 percent of them offer health insurance, well above the national average of 49 percent; and more than three-quarters offer vacation time, sick-leave, and other benefits, according to Oxford Economics research.
The 2022 Franchising Economic Outlook is IFA’s annual study detailing the franchise sector’s performance for the past year and projected economic outlook for the year ahead, as well as an in-depth state outlook for all 50 states and Washington, D.C.
Key highlights from the 2022 report include:
- Following 2020 shutdowns, output for franchises rebounded by over 16% in 2021, reaching nearly $788 billion in output.
- Franchise growth is expected to stabilize in 2022, expanding by 2.2% to reach a total of 792,014 franchise establishments, 17,000 more than 2021.
- Franchises’ GDP contribution to the overall economy will remain stable at 3% in 2022, but the growth rate is likely to slow to 5.7%, still higher than the pre-pandemic level.
- In 2021, franchise employment increased by 8.8%—adding over 46,000 jobs per month. Franchise employment is forecasted to grow at a slightly lower rate of 3.1% to a total of 8.5 million jobs, back to the pre-pandemic level, a net gain of up to 300,000 jobs.
- Franchised establishments in the Personal Services sector are predicted to lead the growth in 2022, followed by Commercial & Residential Services.
State and Regional Level
On the state and regional level, the report shows that states have experienced different rates of economic recovery due to disparities in business climates, migration trends, and changes in consumer preferences, the news release added. On the state level, it is predicted that:
- States in the West and South will experience the fastest upward trajectory of franchise business growth in 2022.
- The Southeast region, which has the largest franchise concentration in the U.S., will have an estimated 231,500 total establishments by 2022, employing 2.6 million workers and contributing $235.9 billion in output to the U.S. economy.
- The top 10 states for franchise growth in 2022 are projected to be: Texas, Florida, Arizona, South Carolina, Idaho, Tennessee, North Carolina, Utah, Montana, and Nebraska.
The full report is available here.
About the International Franchise Association
With 60 years of excellence, education, and advocacy, the International Franchise Association says it is the world’s oldest and largest organization representing franchising worldwide. 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 franchise establishments that support nearly 8.2 million direct jobs, $787.7 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.
Source: International Franchise Association