For Second Consecutive Year, Franchising Exceeds Economic Expectations, Outpaces Broader Economy

Stabilizing labor market, easing interest rates, increasing optimism expected to propel another banner year for franchising; Personal services and retail food, products, and services among the fastest-growing industries; Southeast and Southwest fastest-growing regions

WASHINGTON – The International Franchise Association (IFA) today released its annual Franchising Economic Outlook showing 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).

The full report, conducted by FRANdata, is available here.

“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 Matt Haller, IFA President and CEO. “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.”

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.
Total franchise output is projected to exceed $936.4 billion in 2025, increasing by 4.4%, from $896.9 billion in 2024. Franchise GDP will increase at a pace of 5% to $578 billion.
Franchising will grow faster than the U.S. economy, which is projected to increase by 1.9% in 2025 according to the Congressional Budget Office.
Personal services and retail food, products, and services are expected to be the fastest-growing industries in 2025, increasing by 4.3% and 3.5%, respectively.
Fueled by business-friendly policies and a lower cost of living, growth in the Southeast and Southwest is forecast to outpace the rest of the U.S. franchise market in 2025, with output growing by 6.2% and 8.5%, respectively.
The top 10 fastest-growing states for franchise growth are: Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland.

“Once again, franchising continues to exceed economic expectations,” said Darrell Johnson, CEO of FRANdata. “Even amid concerns about labor requirements, franchising outpaced our projections last year. With inflation easing and interest rates declining, the economic outlook for franchising in 2025 is strong, with favorable conditions and supportive policies paving the way for continued growth and expansion across various sectors.”

Conducted by FRANdata, an industry-leading research and analytical firm, the 2025 Franchising Economic Outlook is IFA’s annual study detailing the franchise sector’s performance for the past year and projected economic outlook for the year ahead, as well as an in-depth state outlook for all 50 states and Washington, D.C.

About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 830,000 franchise establishments that support nearly 8.8 million direct jobs, $896.9 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.