If we’ve learned anything in 2022, it is that we need to expect the unexpected. Just when it seemed like things were starting to get back to normal, a new set of challenges threw a wrench into most people’s and businesses’ plans for the new year.
But, according to a recent report from Franchise Direct, the franchise industry—as a whole—is thriving. Revenues are up, more businesses are franchising, and the industry’s overall economic impact is bigger than ever.
Franchise Industry Revenues are Expected to Top $825 Billion in 2022
For 2022, Franchise Direct forecasts total franchise industry revenues of $826.6 billion. This represents significant growth, as the publication reports that “in 2017, the U.S. franchise monetary output was $720.44 billion.” So, even with the U.S. economy collapsing in 2020 and struggling to rebound in 2021, it seems that franchisors are doing pretty well in 2022.
Franchise Direct reports that today, more than one in seven businesses in the United States is a franchise. It also reports that franchising is more popular in some geographic regions than others. According to the publication, “the Southeast has the largest franchise concentration and the Midwest is the second-largest region in terms of franchise establishments, followed by the Western, Northeast, and Southwestern regions.” On a state level, Franchise Direct reports that the following states are seeing the most rapid growth in franchise ownership:
Notably, however, Franchise Direct also cites an International Franchise Association (IFA) analysis which concluded that franchising’s overall contribution to the U.S. economy “will remain stable at 3% [of GDP] in 2022.” But, regardless of whether the franchise industry is growing faster than the economy as a whole, the fact that the industry is seeing growth at all in 2022 is generally a good sign.
Is 2022 a Good Year to Buy a Franchise?
Given these figures, is 2022 a good year to buy a franchise? Based on the data, it certainly doesn’t seem like a worse year to buy a franchise than any year in recent memory. Of course, some franchise concepts and systems are better suited to the current economy than others, and some are potentially more recession-proof as well.
Ultimately, the decision to buy (or not buy) a franchise should be based on careful consideration of several factors. The economy and the state of the franchise industry as a whole are two big ones, but more micro-level considerations will often guide prospective franchisees’ decisions. Are you passionate about a particular franchise opportunity? Are you confident in your ability to succeed? Do you have the financial resources that are necessary? These are just a few of the many questions prospective franchisees will need to answer carefully as they move forward.
Request a Free Initial Consultation with Attorney Jeffrey M. Goldstein
Are you thinking about buying a franchise? We offer four tiers of fixed-fee franchise business reviews for prospective franchisees. To discuss your options with attorney Jeffrey M. Goldstein in confidence, please call 202-293-3947 or request a free consultation online today.
