Franchising Projections for a Bright 2025
The International Franchise Association (IFA) has released its anticipated annual Franchising Economic Outlook. This year is expected to reflect strong growth, powered by a stabilizing labor market and lower interest rates. Franchising is set to continue as a major economic driver across various sectors.
Growth Rates and Job Creation
The report highlights impressive projections for the upcoming year. Franchise establishments are anticipated to surpass 851,000 units, reflecting an increase of over 20,000 units throughout the year. Additionally, the franchise sector is likely to add approximately 210,000 jobs, which translates into a growth rate of 2.4%. This projected increase will bring the total number of jobs associated with franchising to beyond 9 million.
Impressive Franchise Output
Franchise output is expected to exceed an impressive $936.4 billion in 2025, marking a substantial growth rate of 4.4% from the previous year. Furthermore, the Gross Domestic Product (GDP) generated by franchising is projected to rise by 5%, which amounts to a milestone of $578 billion. These figures illustrate how franchising aims to outperform the broader U.S. economy, which is projected to show only a 1.9% increase in 2025.
Leading Industries and Regional Insights
Personal services, along with retail food, products, and services, are expected to be the fastest-growing industries within franchising, with anticipated increases of 4.3% and 3.5%, respectively. Moreover, the economic landscape in the Southeast and Southwest regions is predicted to outperform the national growth rates, benefiting from favorable business policies and living costs.
Top States for Franchise Growth
The IFA report provides insights into the states experiencing the highest growth within franchising. These include Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland. Each of these states will play a significant role in the expansion of franchise establishments and employment opportunities.
The Resilience of Franchising
Darrell Johnson, CEO of FRANdata, emphasized the remarkable resilience of the franchise business model, which has continued to exceed economic expectations. Even amid previous challenges such as labor shortages, the franchising sector has shown strong adaptability, thanks to favorable economic conditions and supportive policies. As we journey into 2025, the outlook remains assuredly positive for franchise businesses.
About the International Franchise Association
The International Franchise Association (IFA) stands as the oldest and largest entity representing franchising globally, with over 60 years of service. The IFA advocates for the nearly 830,000 franchise establishments that contribute significantly to the economy, generating about $896.9 billion in total output. Furthermore, the association aids franchisees and franchise companies across over 300 business categories.
CONTACT: Katherine Knight Patterson
(202) 662-0783
Frequently Asked Questions
1. What is the expected franchise growth rate for 2025?
The franchise sector is projected to grow by 2.4% in 2025, exceeding broader economic projections.
2. How many jobs will franchising add in 2025?
Franchising is expected to create around 210,000 jobs in 2025.
3. What industries are leading in franchise growth?
Personal services and retail food, products, and services are set to be the fastest-growing industries in franchising.
4. Which regions in the U.S. are expected to see the most franchise growth?
The Southeast and Southwest are predicted to outpace the national market, benefiting from a favorable business climate.
5. What role does the International Franchise Association play?
The IFA advocates for franchise interests, providing education and resources to support growth and sustainability in the industry.
