A stabilizing labor market, easing interest rates and increasing consumer optimism are expected to propel another banner year for franchising, the latest economic forecast from the International Franchise Association (IFA) predicts. Personal services, retail food, products and services are projected to be among the fastest-growing industries, with the Southeast and Southwest being the fastest-growing regions.
“The resilience of the franchise business model not only helped the sector survive the uncertainty of recent years, but thrive in the face of challenging economic conditions,” said IFA President and CEO Matt Haller. “A more favorable economic and regulatory climate have created new optimism and confidence for the year ahead. For those considering a franchise investment or IFA members growing their brands, 2025 is poised to be a banner year, and franchising remains a major driver of growth and upward economic mobility.”
The IFA report showed that franchise growth exceeded projections for 2024, even in the face of ongoing economic uncertainty and policy headwinds. On top of the 2.2% growth experienced in 2024, which exceeded the 1.9% projection, the report forecasts that franchises will grow an additional 2.4% in 2025, a faster rate than the 1.9% projected for the broader economy by the Congressional Budget Office (CBO).
Key findings from the 2025 Franchising Economic Outlook include:
- The number of franchise establishments will increase by more than 20,000 units, or 2.5%, to 851,000 total units.
- In 2025, franchising is expected to add approximately 210,000 jobs, growing at a rate of 2.4%, bringing franchising employment to more than 9 million jobs.
- Franchising employment grew by 2.2% in 2024, adding more than 189,000 jobs.
- The top 10 fastest-growing states for franchise growth are: Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado and Maryland.
The report was compiled in conjunction with research and analytical firm FRANdata. Click here for more from the forecast.