Breaking Down the IFA’s 2018 Franchise Business Outlook

We hope you’ll agree that 2018 has gotten off to a pretty good start, economically speaking. While the stock market has had a couple of dips—corrections if you will—the balance sheet for the country still shows a good amount of strength for business development. And that’s good news for all budding entrepreneurs considering a foray into the world of franchising. During this edition of FranNet’s blog, we’re going to look at some of the takeaways from the International Franchise Association’s (IFA) 2018 Franchise Business Outlook

The business climate for the conclusions reached in the report were already set long before the findings were published. Last year’s historic tax reform package (The Tax Cuts and Job Act of 2017) and several other deregulations have definitely sparked the growth our government was looking for. Perhaps the biggest takeaway in the full report is this direct quote: “…the franchise sector is strong and expected to grow faster than the rest of the U.S. economy.” For those with the entrepreneurial spirit, that’s certainly news you can use.

The IFA Franchise Business Outlook was prepared for the IFA Franchise Education and Research Foundation by IHS Economics, a leading analytics firm specializing in data, risk management and integrated information. Among the key findings and quoted directly from the report are the following bullet points. Get ready to put a smile on your face: 

  • Franchise establishments are expected to grow an additional 1.9 percent in 2018 to 759,000
  • Franchise employment is projected to grow 3.7 percent, continuing to outpace the rest of the economy
  • The gross domestic product (GDP) of the franchise sector is forecast to exceed U.S. GPD growth and increase by 6.1 percent to $451 billion. The franchise sector will contribute approximately 3 percent of U.S. GDP in nominal dollars
  • Franchise business output is expected to increase by 6.2 percent to $757 billion
  • Franchise Personal Services experienced strong growth over the past year and is expected to rank first in growth of the number of establishments and in employment in 2018

In prepared remarks delivered in an IFA press release about the 2018 Franchise Business Outlook Report, CEO Robert Cresanti had this to say: “Over the last year, Congress and the Administration have set their sights on removing the barriers and brakes holding our economy back and stifling job creation. Regulations have been trimmed, taxes have been cut, and, as a result, the franchise community has continued its economic momentum. As we move into 2018, we expect lawmakers will remain steadfast in their support for a strong business environment. Franchises will thrive and continue to strengthen the American economy by providing jobs in every community, playing an important role in the lives of Americans, and supporting a variety of job creating industries, from manufacturing to agriculture.”

These quotes should be music to the ears of prospective franchisees. It seems clear that 2018 will afford the exact type of business climate necessary to nurture strong franchise growth across multiple sectors. The one and only caveat that the franchise industry is still concerned about appears to be the joint employer ruling which we have talked about before in this space. The Save Local Business Act, in its current form, remains vague and in search of a more permanent fix. 

We’re now working on our third month of the year and if you’ve been considering a peek into the world of franchising, all the planets do seem to be aligned. And if you need help taking those first few steps, FranNet would welcome you contacting us for a no-cost, no-obligation visit to discuss your goals, hopes and dreams of becoming your own boss.

It’s what we do best.


Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!

Mar 1, 2018