Franchising continues to exceed expectations in US

The USA’s International Franchise Association (IFA) has released its annual Franchising Economic Outlook showing that franchise growth exceeded projections for 2023, even in the face of ongoing economic uncertainty.

 On top of the 2.2 percent growth experienced in 2023, the report forecasts that franchises will grow an additional 1.9 percent in 2024, adding 15,000 units and 221,000 jobs in the United States. IFA also released the findings from its 2024 Franchisor Survey detailing the challenges posed by the labour market, rising prices, and policy trends.

‘More than anything, these reports demonstrate the resilience of the franchise business model,’ said Matthew Haller, IFA President and CEO. ‘Even in the face of macroeconomic factors like high inflation, labour availability and the cost of capital, franchised businesses continue to outpace the growth of the broader economy. For those considering a franchise investment or IFA members growing their brands, franchising continues to be a major driver of economic growth and small business creation.’

Key findings from the 2024 Franchising Economic Outlook include:

• The number of franchise establishments will increase by more than 15,000 units, or 1.9%, to 821,000 units. Franchising exceeded FRANdata’s projections for 2023, with establishments estimated to have grown by 2.2% compared to the 1.9% previously forecast and an increase compared to the 1.8% growth rate recorded for 2021 to 2022.
• Franchising is expected to add approximately 221,000 jobs in 2024 and bring the total employees to 8.9 million in the United States.
• Total franchise output will increase by 4.1%, from $858.5 billion in 2023 to $893.9 billion in 2024.
• Personal services and quick service restaurants (QSRs) will experience the strongest growth of any industry.

The US Franchisor Survey mirrors the recent Franchising Confidence Index here which found that New Zealand franchising enters 2024 more optimistic than 2023 despite some economic headwinds and challenges.

New Zealand's own triennial Franchising New Zealand survey is currently under way. Results from the 2021 Survey can be seen here.

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