US franchising sector seen staying strong in 2022 amid regional differences
File/ Tim Greenway
In Maine, Firehouse Subs is one of 272 franchise brands. Shown here are Michael and Michelle Koman, at their new Firehouse Subs franchise in Westbrook at Rock Row.
Despite regional differences, the U.S. franchising sector as a whole is projected to remain robust in 2022 as the labor market strengthens and consumer spending stays strong, according to a new national barometer.
In its latest annual economic outlook report released last week, the Washington, D.C.-based International Franchise Association projected that the sector would contribute $501 billion to the U.S. economy in 2022. That represents a 5.7% increase over the $474.2 billion estimated for 2021.
The report found that the sector will end the year with more than 792,000 establishments nationwide, a 2.2% increase over 2021, and add 3.1% jobs to bring the total to 8.5 million.
"At every level, local franchise businesses offer opportunities for economic and career advancement," said IFA president and CEO Matthew Haller. "As we continue to navigate pandemic-related challenges, policymakers should resist the urge to adopt a hard posture against the local businesses leading our economic recovery,"
Maine boasts 272 franchise brands led by Dunkin, Subway and McDonalds, and 864 franchisees, according to figures recently compiled for Mainebiz by FRANdata, a market research company based in Arlington, Va. Among Maine-based brands, South Portland-based Aroma Joe's has 30 locations in Maine with nine more in development.
How regions stack up
With 121,533 franchise establishments and output of $143.7 billion estimated for 2022, the northeastern part of the country trails most of its regional peers, while the Southeast is expected to have the largest franchise concentration this year, the International Franchise Association found in its latest report.
The group also expects states in the West and South to experience the fastest upward trajectory of franchise business growth in 2022.
Franchises in all other states are also most likely going to ramp up in 2022, though at a slightly lower rate, helping the economy recover from the pandemic-induced downturn, according to the report.
Maine did not rank among the top 10 states for franchise growth in 2022; those are projected to be Texas, Florida, Arizona, South Carolina, Idaho, Tennessee, North Carolina, Montana, Nebraska and Nevada.
Asked about the effect of in-migration into Maine during the pandemic on the franchising sector, Jeff Hanscom, the International Franchising Association's vice president of state and local government relations, told Mainebiz that "an increased pool of franchisees would on its face certainly seem to drive continued growth in the region."
Find the full report here.
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