WASHINGTON (dpa-AFX) - Franchise industry is expected to continue growing based on the the momentum of the U.S. market boom in 2020, despite an uncertain economy, according to a study conducted by franchise market research and consulting firm FRANdata for the International Franchise Association (IFA).
According to The Franchise Business Economic Outlook for 2020, the number of franchised businesses in the U.S. is expected to grow by 1.5 percent to 785,316 establishments. Though most franchise businesses will sustain robust growth in 2020, the industries with the most expected growth are personal services, quick-service restaurants (QSR), and full-service restaurants.
The franchise industry creates tens of thousands of opportunities for small business ownership and millions of jobs for employees across the U.S.
The states that will see the most franchise establishments and employment growth in 2020 are ranked in the following order: Texas, Colorado, Arkansas, Florida, Idaho, Tennessee, Georgia, North Carolina, South Carolina, and Nevada.
The study says increasing consumer spending, rising disposable income, and a strong labor market will help franchise industry to witness a strong momentum in 2020.
The industry is also expected to add 232,000 jobs in 2020, growing total employees by 2.8 percent to 8.67 million. This could boost the overall Gross Domestic Product (GDP) contribution in the U.S. by 4.6 percent to $494.96 billion - faster than the U.S. nominal GDP growth rate of 4.1 percent for 2020 as forecast by the IMF.
Franchise output in nominal dollars is projected to improve by 4.1 percent to $819.57 billion in 2020.
In 2019, the franchise business supported nearly 8.4 million direct jobs, $787.5 billion of economic output for the U.S. economy and represented 3 percent of the total GDP.
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