Pa. projected as a top state for franchise business growth, study says

Pennsylvania is projected as the sixth best state in the nation for franchise growth this year, according to a study by the International Franchise Association (IFA). 

Th annual Franchising Economic Outlook states that Pennsylvania will add 948 new local franchise businesses and 9,894 jobs in 2025. The franchise sector is projected to contribute $33.2 billion to the state’s economy in 2025, bringing business ownership opportunities, economic growth, and job creation. Population growth trends, the region’s business-friendly policies, and industry growth are contributing factors in the study.    

“The resilience of the franchise business model not only helped the sector survive the uncertainty of recent years, but thrive in the face of challenging economic conditions,” IFA President and CEO Matt Haller said in a statement. “A more favorable economic and regulatory climate have created new optimism and confidence for the year ahead. For those considering a franchise investment or IFA members growing their brands, 2025 is poised to be a banner year. Franchising in Pennsylvania remains a major driver of growth and upward economic mobility.”  

Per the study, Pennsylvania is expected in 2025 to grow 3.2%, totaling 30,313 franchise businesses; add 9,894 new jobs, totaling 320,635 franchise employees; and provide $33.2 billion in economic output. 

The 2025 Franchising Economic Outlook is IFA’s annual study detailing the franchise sector’s performance for the past year and projected economic outlook for the year ahead, as well as an in-depth state outlook for all 50 states and Washington, D.C. 

The report also forecasts that nationally, franchises will grow 2.4% in 2025, a faster rate than for the broader U.S. economy. A stabilizing labor market, easing interest rates, and increasing optimism are expected to propel franchise growth. National findings from the 2025 Franchising Economic Outlook include the following: 

• The number of franchise establishments will increase by more than 20,000 units, or 2.5%, to 851,000 total units.   

• In 2025, franchising is expected to add approximately 210,000 jobs, growing at a rate of 2.4%, bringing franchising employment to more than 9 million jobs.  

• Franchising employment grew by 2.2% in 2024, adding more than 189,000 jobs.  

• Total franchise output is projected to exceed $936.4 billion in 2025, increasing by 4.4%, from $896.9 billion in 2024. Franchise GDP will increase at a pace of 5% to $578 billion.   

• Franchising will grow faster than the U.S. economy, which is projected to increase by 1.9% in 2025 according to the Congressional Budget Office.   

• Personal services and retail food, products, and services are expected to be the fastest-growing industries in 2025, increasing by 4.3% and 3.5%, respectively.   

• Fueled by business-friendly policies and a lower cost of living, growth in the Southeast and Southwest is forecast to outpace the rest of the U.S. franchise market in 2025, with output growing by 6.2% and 8.5%, respectively.  

• The top 10 fastest-growing states for franchise growth are Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland. 

The study was conducted by the research and analytical firm FRANdata. 

“Once again, franchising continues to exceed economic expectations,” said Darrell Johnson, CEO of FRANdata. “Even amid concerns about labor requirements, franchising outpaced our projections last year. With inflation easing and interest rates declining, the economic outlook for franchising in 2025 is strong, with favorable conditions and supportive policies paving the way for continued growth and expansion across various sectors.”