2023 Franchise Industry Year-in-Review and 2024 Outlook

As we get ready to close out another successful year at Franchise FastLane, we thought our readers would benefit from looking back at the year that was for the franchising industry – as well as the potential outlook in 2024. In a recent podcast appearance a couple of months back, International Franchise Association (IFA) President Matthew Heller stated, “Franchising always tends to perform a little bit better than the overall economy. To break it down to one word, it’s ‘resilient,’ it’s a very resilient business model.”

Below is a recap of how the industry performed, as well as a look into what 2024 holds in store for the franchising industry.

Looking Back on 2023

According to the annual Franchise Economic Outlook Report from the IFA – there was much to be excited about when 2023 dawned. Released just after the annual IFA Convention in February, this in-depth report is a snapshot of the industry as a whole, predicting specific growth numbers and a detailed rundown of individual business sectors for the franchising industry. These predictive numbers reflect the current state of franchising in the U.S., with accurately forecast totals revealing:

• The overall number of franchise establishments was predicted to increase by almost 15,000 units in 2023, a 1.9% year-over-year jump. To date, there are approximately 805,000 franchise establishments in the U.S.
• Franchising was predicted to add up to 254,000 new jobs in 2023. With a growth rate pegged at 3.0%, that brought the total number of combined employees in the franchise-related workforce to just under nine million
• The gross domestic output of all combined franchised businesses was predicted to increase some 4.2%, year-over-year, increasing to $860.1 billion

Which states saw the most franchise-related activity in 2023? The report predicted strong growth in both the southeast and southwest areas of America. Among the top 10 on the list were: Texas, Illinois, Florida, Georgia, Tennessee, North Carolina, South Carolina, Arizona, Colorado, and Indiana. All in all, it’s a safe bet to say that 2023 was a success for the franchising industry!

Looking Ahead to 2024

No matter how you slice it, franchising activity in 2024 will inexorably be tied to interest rates. The ebb and flow of rate hikes or reductions will continue to have a direct impact on lending, which is critical to the expansion of more franchise establishments. At the most recent meeting of the Federal Reserve, Chairman Jerome Powell left interest rates where they stand. Looking ahead through the end of 2024, the Fed expects to cut interest rates by 25 basis points on at least three occasions. With the number of franchise establishments hovering around 900,000 currently, it’s not much of a stretch to think the industry could surpass the one million mark – which will be a significant milestone – bound to bring even more attention to franchising in the U.S. As for specific industries and business sectors expected to remain popular among franchisee candidates, here’s a short list:

• Home improvement franchises (like Bloomin’ Blinds, Koala Insulation, Wallaby Windows, Best Choice Roofing, The Brothers That Just Do Gutters, Five Star Bath Solutions, Spray-Net, Canopy Lawn Care and Anchored Tiny Homes)
• Mobile-based franchises (like Shrunk 3D, DonutNV, Zoom Drain, All Dry Services, EverLine Coatings and Services, Bar-B-Clean, and Hallmark Homecare)
• Mind/Body/Health/Wellness franchises (like The Tox, The Exercise Coach, and Gameday Men’s Health)
• Educational and/or youth-oriented franchises (like Soccer Stars, M14Hoops, and Tippi Toes)

There’s also no doubt that 2024 being an election year will have some reverberating effects on the franchising industry – as well as all the others. History has shown us that society almost always becomes more cautious when uncertainty is present.

As for Franchise FastLane, 2023 was without a doubt our best year ever – and the statistics don’t lie. After reviewing our performance internally, we’re proud to share that in 2023 we’ve helped award franchises in more than 1,950 territories, changing over 750 lives through business ownership. To that end, we can’t thank our brand partners, consultant partners, and FastLaners enough for their hard work, grit, and dedication to inspiring life change through franchise ownership.

Are You Ready to Take Your Brand to the Next Level?

Franchise FastLane is the No. 1 Franchise Sales Organization (FSO) in the country and our mission is to responsibly drive extraordinary growth for the chosen few. If you are interested in learning more about the possibility of joining the FastLane or CarPool, please click here to apply. To keep up with all the latest happenings, make sure you follow us on LinkedIn, like us on Facebook, and check out our collection of photos on Instagram.