In the wake of the COVID-19 pandemic, our world continues to seek a firmer footing, and businesses in some industries are struggling while franchise owners are reporting an exceptionally bright outlook for the rest of 2023.
Although many industries are facing economic uncertainty and labor and wage-related challenges, the future of franchising is looking remarkably positive in terms of job growth, unit growth, economic output, and other factors.
If you are considering turning your established brand into a franchise, now might be the time to speak to our team at Pinnacle about taking that next step. If you are a current franchise owner, you may want to explore the possibility of increasing your onboarding of franchisees and opening new units.
At Pinnacle Franchise Development, we partner closely with franchisors—both new and established—to help them reach new heights in their success story. Check out the rest of this blog to find out how the Franchise world is projected to perform in 2023.
According to the 2023 Franchising Economic Outlook—the annual report released by the International Franchise Association (IFA)—the total number of franchise establishments in the U.S. is expected to grow by a healthy 1.9%. At this rate of growth, franchises will add nearly 15,000 units.
Growth is expected to be particularly strong for service-based businesses and quick-service restaurants (QSRs). Those businesses alone are expected to average a 2.5% growth rate in 2023. For example, in 2020, there were 183,543 QSRs. In 2023, there are expected to be a total of 196,858 of these popular fast-casual establishments.
The rapid of growth of QSRs, service-based businesses, and other franchise establishments is expected to make a hefty contribution to the U.S. economy. The total economic activity in nominal dollars had been $825.4 billion in 2022. It’s expected to significantly surpass that figure in 2023, with estimates placing total economic output at $860.1 billion.
The increase in economic output is especially impressive considering inflation rates. About 50% of franchisees surveyed agreed that the support of their franchise network enabled them to withstand inflation-related issues.
In fact, CEO of FRANdata said, “In spite of all the challenges, the cooperative nature of franchise businesses helped better insulate franchise owners from macro-economic uncertainty.” This indicates it may be an appropriate time for franchisors to investigate methods of strengthening the support, training, and resources they offer to their franchisees.
The U.S. economy continues to add jobs at a brisk pace. In fact, the U.S. Bureau of Labor Statistics (BLS) reported that in May of 2023 alone, employers added 339,000 new nonfarm employees to their payroll.
In the world of franchising, we’re encouraged to see that hiring is looking notably robust. Franchisors already contribute millions of jobs to the economy, and they’re expected to add about 254,000 new jobs throughout 2023. That’s an increase of about 3% for a total of 8.7 million franchise employees.
Take advantage of the momentum happening in the world of franchising. With more than 28 years of combined experience delivering franchise development services, the team at Pinnacle Franchise Development is well-positioned to support your growth trajectory.
We offer a full suite of services to new franchise owners and established brands alike—ranging from franchise sales outsourcing to lead generation support to franchise consulting services. Contact us today to discover how you can elevate your brand with the team at Pinnacle.
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