12,000 New Units and Economic Output Bump of 1.6% Are Expected
- The International Franchise Association’s 2026 Franchising Economic Outlook report predicts that the economic output of franchising will exceed $921.4 billion in 2026.
- Franchises will post the most growth in the Southeast and Southwest.
- Child-related franchises and residential and commercial services will grow faster than other industry categories.
- The report tracks about 9,000 brands in all 50 states and Washington, D.C.
The International Franchise Association on Thursday released its 2026 Franchising Economic Outlook report, which forecasts that 12,000 franchised U.S. businesses will launch this year. The annual report also predicts that the economic output (the total value of goods and services sold) of franchised businesses will increase 1.6%, topping $921.4 billion in 2026; that total was $907.3 billion in 2025.
So what regions and what types of businesses are likely to achieve the fastest growth? More franchises will open in the Southeast and Southwest than in other areas of the United States, according to the report. The IFA’s report foresees that children’s services (childcare, education, fitness, sports, etc.) and commercial and residential services (maintenance, construction/remodeling, decorating/design) will lead other franchise categories with a 3.2% year-over-year growth rate.
Provocative Predictions and Findings
Following are topline data and determinations in the IFA report.
- The total of U.S. franchised businesses will end this year at about 845,000 units, reflecting a 1.5% bump. At year-end 2025, the U.S. had 832,521 franchise units in operation. (This reflects significant growth in franchising during roughly the past decade; in 2017, the U.S. Census Bureau stated that the United States had only 498,234 franchise establishments in operation.)
- Franchising’s share of the U.S. economy will support nearly 8.9 million jobs by Dec. 31. That translates to an increase of more than 150,000 jobs and an overall hike of 1.8%.
- Franchising’s gross domestic product, or GDP, should rise 1.8% during the year, increasing from $549.9 billion in 2025 to $558.4 billion in 2026.
- Franchising will expand 2.5% in the Southwest and 1.7% in the Southeast. The report attributes those regional surges to business-friendly policies, lower cost of living and population growth.
- The 10 fastest-growing states, in descending order of growth, will be Texas, Florida, Georgia, Arizona, North Carolina, Colorado, Michigan, Utah, Ohio and Maryland. Michigan, Ohio and Utah are new to the top 10, the report stated, largely because of their relative affordability and their potential for expansion.
- For the first time since the Covid-19 pandemic, the output increase experienced by full-service restaurants (fine, casual and midscale dining) will exceed that of quick-service restaurants.
- Two trends in the lodging industry are that high-income consumers will continue to spend on personalized and experiential luxury travel, while value-focused consumers probably will reduce their spending.
- Successful single-unit franchisees leverage their operational expertise as they invest in additional locations.
- Since the pandemic, the rising awareness of preventive healthcare has propelled the sector to become the third-largest franchised industry.
- Retail foods, products and services will grow by 2.3% this year.
- Health and wellness franchises, led by those that provide in-home health care, should grow by 2.1% in 2026.
- Private equity investing picked up in the third and fourth quarters of 2025; it will continue to accelerate in 2026.
Report as a Whole
IFA President and CEO Matt Haller said the report underscores the resilience of franchise businesses, particularly after the economic uncertainties of 2025. “After a year of recalibration, franchising is better positioned to navigate an improving economic environment than independent businesses due to tax certainty, lower interest rates and investments in AI that will propel brand growth, franchisee unit-level economics, and wage growth for the franchise workforce,” Haller said in a news release.
The 2026 Franchising Economic Outlook report is prepared by the research and analysis firm FRANdata, which tracks approximately 9,000 franchise brands in all 50 states as well as Washington, D.C. In addition to issuing expectations for the current year, the annual report looks back at what occurred in franchising during the previous year.
To Read the Full Report
Access the entire 2026 Franchising Economic Outlook document. For another look at franchising in the U.S. economy, review the IFA’s Value of Franchising report, issued in January. That report found that franchises provide stronger wage growth, superior benefits, better business ownership opportunities and more generous community contributions than non-franchise businesses.
