[All the information taken from the International Franchise Association’s 2024 Franchising Economic Outlook]
There’s no doubt that we faced significant economic challenges in 2023. A few of which include rising inflation, labor shortages, and high interest rates. Many of these difficulties remain in 2024. However, even in an uncertain economy, franchising remains a robust and profitable business model that experts expect to continue growing.
Where in the United States Will Franchising Grow the Most in 2024?
While all regions expect to see growth in 2024, it’s likely that the southeast and southwest regions will outpace the rest of the United States. These areas experienced the most population and industry growth.
Currently, the southeast region “is home to approximately 30% of all U.S. franchised businesses”. This makes it the leader for the most franchised businesses in the country. The midwest follows as the second-largest region.
When it comes to individual states, Texas is the top state for franchising as it has been for the last three years.
THE TOP 10 STATES FOR FRANCHISE GROWTH IN 2024
- Texas
- Florida
- Georgia
- North Carolina
- South Carolina
- Tennessee
- Maryland
- Arizona
- Colorado
- Virginia
Which Industries Will See the Most Growth in 2024?
The personal services and quick service restaurant (QSR) industries are projected to see the most growth in 2024.
#1 – Personal Service
Personal services are “services related to beauty, health and fitness, storage, moving, education, childcare, sports and recreation, pets, and travel”. They are expected to grow by 3.0% in 2024.
Why are they projected to grow?
During the COVID-19 pandemic, various restrictions created a pent-up demand for services such as luxury spas, salons, nonsurgical skincare, specialized hair services, and more. These beauty-related services rebounded post-COVID because consumers placed a stronger emphasis on personal health and wellness.
#2 – Quick Service Restaurants (QSRs)
QSRs include “limited-service restaurants that serve meals at lower price points and typically provide fast service, a limited menu, and limited table service”. It’s forecasted that these establishments will grow by 2.2% in 2024.
Why are they projected to grow?
Demand for units with smaller footprints increased due to rising real estate costs and the cost of buildup. Restaurants with drive-thrus tend to fit these parameters causing the “initial investment cost to fall to less than $500,000”.
Additionally, consumer demand for fast food and take out increased as “approximately 21% of new concepts were categorized as QSRs”.
Looking to Purchase a Franchise in 2024?
Thinking about starting a business? Franchise ownership offers many advantages over starting your own business from scratch, one of which is the franchising industry’s resilience even in tough economic times.
At FranNet, our expert franchise consultants will help you find the right franchise opportunity. At no cost to you, they will evaluate your skills and goals, match you with a franchise brand that fits, and then walk you through the process from start to finish. Schedule your free consultation today to get started!
