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2025 Franchising Economic Outlook: Yes, Franchising Is Still Booming (And Here’s Why)

Updated: Mar 28

I read and summarized the IFA's 2025 Franchising Economic Outlook so you don't have to.


Woman reading a copy of the 2025 IFA Economic Outlook
Woman reading a copy of the 2025 IFA Economic Outlook

Spoiler alert: Franchising is still doing just fine—more than fine, actually. The 2025 Franchising Economic Outlook is out, and it’s got good news for those of us who like our businesses scalable and our burgers franchised.

Here’s the TL;DR: Everything’s going up—except the West. More units, more jobs, more output, and more reasons to believe franchising is still one of the best business models in the U.S. economy.

Let’s break it down, with a little caffeine and clarity.


The Big Picture: Franchising = Growth

You know it’s going to be a good year when your industry is flirting with a record $936.4 billion in output. That’s billion with a B. We're talking about over 850,000 franchise locations doing their thing, slinging products, offering services, and creating 213,000+ new jobs in the process.

And while the Fed may be doing its awkward slow dance with interest rates, most signs are pointing toward a friendlier economic climate. Inflation is simmering down, small business optimism is holding strong, and consumers are still spending like their credit cards don’t have limits (hint: they do).


What’s Hot? Personal Services and Retail Food

If you’re in personal services or retail food/products, pop the champagne—or better yet, the protein shake. These two are expected to lead the charge in 2025:

  • Personal Services: Up 4.3%

  • Retail Food, Products, and Services: Up 3.5%

From boutique fitness and beauty to therapy and childcare, personal service brands are cashing in on niche appeal and flexible models. And retail food? It continues to thrive because—let’s face it—Americans really love snacks.


By the Numbers (Because We Love Stats)

Here’s your franchise forecast in hard numbers:

  • Franchise units: Up 2.5%, to 851,402

  • Employment: Up 2.4%, adding 213,000+ jobs

  • Franchise GDP: Up 5%, to $578 billion

  • Top Growth Regions: Southeast (+6.2%), Southwest (+8.5%)

  • Least Exciting Region: The West (-0.5% in output—maybe it’s the avocados?)



The Southeast and Southwest are booming for Franchise growth.
The Southeast and Southwest are booming for Franchise growth.


The Regional Rundown

The Southeast is still the belle of the franchising ball, representing 30.4% of all franchise units. But the Southwest is showing off, with 8.5% output growth—everything really is bigger in Texas (and Arizona).

Meanwhile, the West is dragging its feet a bit, possibly weighed down by higher costs and tight regulations. And the Northeast? Solid, but not breaking records.


Top States to Watch:

Basically, if it’s sunny and has a decent cost of living, franchises are flocking there.


What About Industries?

Every franchise sector is growing, but some are doing it more stylishly than others.

  • Quick Service Restaurants: Up 2.2%—breakfast and lunch are back, thanks to return-to-office life.

  • Lodging: Up 1.0%, but moving slow due to high construction costs.

  • Real Estate: Up 0.7%—a modest bump despite housing market challenges.

  • Business Services: Still growing, thanks to strong entrepreneurial energy.

  • Commercial & Residential Services: Getting a boost from a modest recovery in home sales.


Economic Forces at Play

Let’s zoom out for a moment. What’s making all this growth possible?

  • Lower interest rates (thanks, Fed)

  • Stable inflation (finally)

  • Strong consumer spending (even if it’s debt-fueled)

  • Entrepreneurial momentum (430,000 new business apps/month in 2024!)

  • Small Business Optimism: Still standing strong

Of course, it’s not all sunshine and royalties. There are still labor shortages (especially in childcare), a tight housing market, and state policies in places like New York and Illinois that make franchising harder than it needs to be.




Final Thoughts: Optimism, With a Dash of Realism

If 2024 was good, 2025 is shaping up to be even better. Franchising is expanding across industries and regions, creating jobs, and helping entrepreneurs build wealth—and burgers, and spas, and tutoring centers.

Sure, there are challenges, but the momentum is undeniable. The takeaway? If you're in the franchise game, stay in. If you're not, maybe it's time to start scouting for your next opportunity.

Because in 2025, franchising isn’t just surviving—it’s thriving.


If you are exploring franchises, and would like guidance at no cost to you, book a call with one of our consultants.



 
 
 

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