What are the Franchise Growth Sectors?

After you’ve decided to seek business ownership through franchising, the investigative process begins as you choose from thousands of concepts. Because it’s wise to keep an open mind about the type of business you may own, this step can sometimes be a tad overwhelming. But if you know where to seek and find trustworthy industry information, you’ll always be in excellent hands. Our industry trade association, the International Franchise Association (IFA), and FRANdata, the leading franchise research firm, are both excellent resources and they recently collaborated to produce a key forecasting report.

It’s entitled, IFA 2021 Economic Outlook for Franchising, and here’s what it has to say about the industry’s recovery, as well as which franchise sectors they say are primed for the most growth:

Covid Recedes, Franchising Recovers

Aside from certain industries such as restaurants, lodging, and hospitality, franchising didn’t fare too badly during the pandemic. In fact, many signs seem to show that interest in pursuing an entrepreneurial future actually rose among the population—which likely had a lot to do with downsized employees and those rethinking their future amidst uncertain circumstances. The good news for the franchising industry, in general, is that the report predicts, among most metrics, that we’ll be back to pre-pandemic levels by the end of 2021.

By the Numbers

Economic outlooks are all about prognostications and predictions. FRANdata, being the leading research firm for our industry, ran the numbers and the calculations look robust. They predict that in 2021, franchising will see an additional 26,000 new units, the addition of 800,000 new jobs, and a contribution of $477 billion to the U.S. GDP. They predict the total number of those employed in the franchise industry to top eight million. Lastly, the total number of franchise establishments is predicted to grow at a rate of 3.5%.

Top-3 Franchise Growth Sectors

In a section of the report that covers industry growth, here’s what FRANdata revealed about the top-three ranked franchise growth sectors:

  • Commercial & Residential Services – this area remained red hot right through the pandemic and is expected to continue surging. FRANdata predicts 3.4% growth
  • Real Estate – low-interest rates and insatiable demand for home sales will keep this sector strong. FRANdata predicts 3.5% growth
  • Retail Food, Products & Services – a devastated landscape is about to re-emerge stronger, bouncing back full of opportunity to replace shuttered eateries. FRANdata predicts 3.3% growth

As the rollout of vaccinations continues apace in the U.S., more and more of our economy will reopen, setting the stage for what some economists have predicted could be a redux of the “Roaring Twenties”. While the health and safety of our population will always be the most important priority, it’s definitely pleasing to see that a return to normalcy is not only possible—but probable. And maybe even sooner than we think.

Back to our audience of budding entrepreneurs. When you begin the investigative process, we hope that you choose to work with a seasoned professional broker. Consultants at FranNet, who both live and work in your area, can offer you guidance in a turnkey setting—all at no cost and no obligation to you. Schedule an appointment and let’s work together to find the perfect franchise opportunity for you to own.

May 12, 2021