Whether or not you like Donald Trump as a person or the president, one thing is clear: Much of the business community is feeling very optimistic about they hope lies ahead. Trump is very pro-business in a way that only a shrewd businessman can be. Businesses throughout the nation are looking forward to what they hope will be years of solid growth, and that includes the franchising industry. If you’re a veteran looking for the right business opportunity, you want to find something that is poised to take advantage of growth opportunities. What insights do franchising growth trends have to offer in this regard?
Franchising Growth Trends Predicted to Continue
Franchising in general has already clocked no fewer than seven consecutive years of growth. As of now, 1.6% growth is predicted in the number of franchise locations for 2017 according to the International Franchise Association (IFA) – an increase of 11,500 locations to total more than 744,000. In the Franchise Business Economic Outlook report published each year by the IFA, employment in franchising is expected to add 250,000 new jobs, expanding the franchise workforce by 3.3% to a total of nearly 7.9 million employees. Gross domestic product for the industry is expected to grow from $405 billion to $426 billion, a solid 5.2% increase.
As IFA president and CEO Robert Cresanti said on a conference call with reporters in late January, “Franchising…establishments are growing faster and creating more jobs at a faster pace than the overall economy. They’re getting more sales and growth than other businesses.” While these positive franchising growth trends are encouraging, they’re also very general. You want to know about more specific areas of growth in order to choose the right franchise opportunity.
Finding Specific Opportunities in Franchising Growth Trends
The IFA provides projections for growth within broad categories of franchises it calls “lines,” detailing expectations for growth in number of locations, employment, and “output” (which can be thought of as sales). I think that last figure is one of the most important, so here are the three kinds of franchises poised to grow the most by sales in 2017:
- Full-Service Restaurants: 6.8%
- Quick-Service Restaurants: 6.7%
- Personal Services: 6.1%
While the two kinds of restaurants are self-explanatory, you may be scratching your head wondering what is meant by personal services. This is a broad category that includes educational services, health care, entertainment and recreation, personal and laundry services, veterinary services, loan brokers, credit intermediation and related activities, and personal transportation. If you’re not interested in running a restaurant, there are still all kinds of choices in the personal services line of franchises. And the reason this sector is going to do so well is because consumers are finally feeling good about the economy and their personal finances thanks to rising disposable income and household net worth.
Franchising Growth Trends by Location
Franchising is like real estate in terms of the mantra “location, location, location.” So where in the country is franchising poised to grow the most in 2017? Here’s what the IFA report says: “States in the South and West will lead the nation in franchise employment and output growth in 2017. Economic growth in both regions has benefited greatly in recent years from renewed flows of domestic migration.” You need to have confidence that you’ll be able to hire the workers you need, so here are the predicted top five states for franchise employment growth in 2017:
- Arizona: 4.7%
- Utah: 4.6%
- Nevada: 4.4%
- Florida: 4.1%
- Colorado: 4.1%
These are just a few franchising growth trends that might help point you in the right direction when choosing a franchise. If you’re ready to take the analysis to the next level, Veteran Franchise Centers can walk you through a process to help you make the choice that’s right for you.