Top 10 States with the Highest Growth in the Retail Franchise Sector

The retail franchise industry has an important role in the US economy, contributing around 3% of the total GDP according to the International Franchise Association (IFA). As of 2021, there were around 775,000 franchise locations in the US, providing 8.2 million jobs and generating an economic output of $787.7 billion.

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

Get a professional MEP design for your franchise fitout project.

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

Top 10 States for Retail Franchises in 2022

The IFA has analyzed growth rates for the franchise industry throughout the US, and they have identified the 10 states with the best outlook in 2022. Their latest report provides the estimated growth rate in three important areas: number of franchise establishments, employment, and economic output. 

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

• The number of franchise establishments is growing by +2.2% in 2022.
• Franchise industry jobs are growing by +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, Southeast states are expected to have around 231,500 establishments in operation, employing a workforce of 2.6 million and generating $235.9 billion. Over 29% of US franchise establishments are located in the Southeast, with a similar share of the industry’s jobs and economic output.

Which Franchise Business Lines Have the Highest Growth?

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

As you can see in the table above, personal service franchises are expected to have the highest growth in 2022 (+3.1%). This business line 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 fitout project. This ensures a quick approval with the local building department, while meeting all technical specifications provided by the franchise. In case you’re using a rented commercial space, we can also help you meet any requirements established by the landlord.