Top 10 States with the Fastest Growth in the Retail Franchise Industry

The retail franchise industry plays an important role in the U.S. economy, contributing about 3% of total GDP, according to the International Franchise Association (IFA). As of 2021, there are approximately 775,000 franchises in the U.S., providing 8.2 million jobs and generating economic output of $787.7 billion.

The franchise sector is expected to continue growing and the IFA published the Franchise Economic Outlook for 2022 on 15 February. The report provides an overall economic outlook for the U.S. franchise industry, along with detailed information by line of business and by state. This includes a list of the 10 states that are expected to have the highest franchise growth rate in 2022.

Get a professional MEP design for your franchise retrofit project.

Opening a new franchise can be a promising business opportunity, especially in states that currently have high growth rates. However, remember that you must meet the specifications and manuals provided by the franchise, along with local building codes and owner specifications. These requirements also apply to MEP installations, and the simplest solution is to obtain a professional design from a qualified engineering firm.

Top 10 States for Retail Franchises in 2021

IFA analyzed the growth rates of the franchise industry in the US and identified the 10 states with the best prospects in 2022. Its latest report provides the estimated growth rate in three important areas: number of franchise establishments, employment and economy. exit.

There is a favorable outlook for the U.S. retail franchise industry overall. In 2021, IFA reported 774,965 establishments, 8,192,600 jobs and economic output of $787.7 billion. With growth forecast for 2022, the franchise industry is expected to reach 792,014 establishments, 8,449,162 jobs and an economic production of US$826.6 billion. More than 17,000 new franchise locations are expected to open, creating more than 256,000 jobs.

• The number of franchised establishments grows +2.2% in 2022.
• Jobs in the franchise industry are growing +3.1%.
• The economic output of the retail franchise sector is growing by +4.9%.

The Southeast is currently the largest market for the retail franchise sector. By the end of 2022, the Southeast states are expected to have around 231,500 establishments in operation, employing a workforce of 2.6 million and generating US$235.9 billion. More than 29% of US franchised establishments are located in the Southeast, with a similar share of the sector's jobs and economic production.

Which lines of franchise business show the greatest growth?

The IFA predicts 17,050 new franchise openings for 2022, which represents a growth rate of 2.2% compared to 2021. However, this growth is not distributed equally across all lines of business:

As you can see in the table above, personal services franchises are expected to see the biggest growth in 2022 (+3.1%). This line of business is followed by commercial and residential services (+2.7%) and table/full-service restaurants (+2.5%). These three sectors will have growth rates above the general industry forecast of +2.2%.

Opening a new franchise location is simpler when you get a professional MEP design for the retrofit project. This ensures quick approval with the local building department while meeting all technical specifications provided by the franchise. If you use a rented commercial space, we can also help you meet the requirements established by the landlord.