2025 Franchising Economic Outlook
The 2025 Franchising Economic Outlook is IFA’s annual study, in partnership with FRANdata, 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.
This year’s report shows 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 report highlights sector growth across eight key franchising business lines and details regional trends, including the top states for franchise growth. It also provides key insights into the state of the U.S. economy, trends in business, and challenges facing small business owners.
Key findings from the 2025 Franchising Economic Outlook include:
The top 10 fastest-growing states for franchise growth are: Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland.
- 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.