Each year, our industry eagerly awaits the release of the International Franchise Association’s (IFA) Economic Outlook Report. The much-anticipated predictions were made public a couple of weeks ago and FranNet of DFW & Oklahoma is here to share the best takeaways. The IFA compiled this report with the help of FRANdata, the leading industry experts on business intelligence and a valuable partner of FranNet.
While the full report is 36 pages long, FranNet of DFW & Oklahoma has reviewed the contents and present the following takeaways for our audience of budding entrepreneurs:
A Strong Recovery Continues…
From a business outlook perspective, franchising had a strong year in 2021 which is expected to continue apace. The industry’s contribution to the overall GDP is predicted to remain at +3%, employment is forecast to grow at +3.1% with a net gain of 257,000 new jobs. The predictive number of new franchise establishments is 17,000 units.
Leading the pack for franchise growth industries is Personal Services, expected to expand at a rate of +3.1% overall. QSR and Hospitality/Lodging will continue their own recovery, each with a positive net gain in the single digits. Thanks to a real estate market on the rise – both residential and commercial – this sector is predicted to have the second-highest overall growth rate at +2.7%.
Top States for Franchise Growth
You’ll never guess where Texas ended up on the list of states predicted to have the best rate of overall franchise growth. If you had Texas on your Bingo Card at No. 1, come claim your prize! FRANdata tied the proposed franchise growth levels to net migration over the past two years. Leading the pack was Texas, followed by Florida, Arizona, and North Carolina.
One Concern Remains…
While the IFA’s 2022 Economic Outlook Report does paint a rosy overall picture for the franchising industry, there is still concern over rising interest rates and how this might factor into small business lending rates. Thankfully, consumer spending and confidence are still fairly robust, with a healthy index score of 115.8 as we closed out 2021. We’ll all be paying attention to how the Fed manages its planned interest rate hikes later this year.
The report’s executive summary concludes that the year 2022 should be a year of “rebalancing and normalization”, which sounds plenty positive and upbeat. Factors such as last year’s “Great Resignation” have helped boost the fortunes of franchisors with a fresh round of budding entrepreneurs. The final numbers calculated by FRANdata reveal predicted increases across the three biggest factors. Franchising is expected to expand 2.2%, franchise employment should hit 3.1%, and GDP growth output is expected to rise by 4.9%. In conclusion, these facts, figures, and percentages provided in the IFA’s 2022 Economic Output Report all reflect what FranNet of DFW & Oklahoma is seeing in the trenches.
If you’d like to explore the full range of possibilities that come with small business ownership through franchising, let FranNet of DFW & Oklahoma be your guide. Our no-cost, no-obligation consultations have helped hundreds of entrepreneurs secure a future that belongs to them and them alone. We’d love to introduce you to a whole new world of possibilities through franchise ownership.