The IFA releases annual Franchising Economic Outlook report.
By Andrew Carlo
The franchise industry passed growth projections in 2024, according to a report from the The International Franchise Association (IFA).
The IFA’s annual Franchising Economic Outlook report indicates that despite political and economic headwinds, including elevated inflation, franchise growth was at 2.2% last year compared to an earlier projection of 1.9% increase.
According to the IFA, franchises could see additional 2.4% growth this year in comparison to a rate of 1.9% growth for the overall economy as projected by the Congressional Budget Office (CBO).
“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.”
Other findings in the 2025 Franchising Economic Outlook report include sizeable location growth. The IFA says that the number of franchise establishments will increase by more than 20,000 units, or 2.5%, to 851,000 total units in 2025. While franchising employment increased by 2.2% last year, with the addition of more than 189,000 jobs, another 210,000 jobs in franchising are expected for this year.
Regarding the financial size of the industry, IFA indicates that total franchise sales are expected to exceed $936.4 billion in 2025. This marks a 4.4% increase from $896.9 billion in 2024.
Geographically, the fastest-growing markets for franchise growth are the Southeast and Southwest where sales are forecast to move ahead by 6.2% and 8.5%.
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. The IFA reports that the states, which are likely to experience the fastest growth include Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland.
When it comes to the types of franchises seeing the biggest surges this year, the IFA points to personal services and retail food, products, and services. These franchises should pace the industry with growth expected at 4.3% and 3.5%.
“Once again, franchising continues to exceed economic expectations,” said Darrell Johnson, CEO of FRANdata, which conducted the report. “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, a research and analytical firm, the 2025 Franchising Economic Outlook the full report is available here.
“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,” Haller said.
