Why Franchising Will Outpace the U.S. Economy in 2025
This year, the franchise industry is on pace to outperform the U.S. economy. Here's why.
This story appears in the May 2025 issue of Entrepreneur. Subscribe »
Entrepreneurship has long been the backbone of the American Dream, and at its core lies the transformative power of franchising.
In 2025, franchising continues to shine as a dominant force in the U.S. economy — offering aspiring entrepreneurs a pathway to going into business for themselves, but not by themselves. The organization I lead, the International Franchise Association (IFA), projects that franchising is set to grow 2.4% this year, outpacing the broader U.S. economy's expected 1.9% GDP growth, with projections of over 210,000 jobs created. We expect the number of franchise establishments to increase by more than 20,000 units this year, or 2.5%, to 851,000 total units across the country.
That's a testament to its resilience and potential, even in the face of uneasiness in the economy due to wavering consumer confidence, geopolitical and policy uncertainty in the U.S., and lingering high interest rates for small businesses.
Related: 8 Reasons Why We Need Entrepreneurs Now More Than Ever
A catalyst for economic growth
Franchising's strength lies in its unique ability to pair entrepreneurial ambition with the stability and name recognition of an established brand.
While not all franchise brands are created equal, the winning formula is clear: When potential franchise investors choose to partner with brands that uphold responsible franchising practices, they benefit from an existing business playbook, a network of other franchisees, and support from the brand.
From quick-service restaurants to retail stores to residential services, franchises span nearly every industry imaginable at a wide range of investment costs. The IFA anticipates the greatest growth to come in the personal services and retail food, products, and services categories — but there's growth to be found throughout the system.
Before you buy a franchise, of course, the IFA recommends that potential franchise investors conduct significant due diligence when researching a franchise opportunity, talk to existing and former franchisees in those systems, and hire their own legal counsel that has experience reviewing franchise agreements.
Related: The Basics of Making Money in Franchising
Overcoming challenges and misconceptions
Despite its many advantages, franchising has faced hurdles in recent years, such as shifting policy environments and misconceptions about its business model at the federal and state levels.
However, these challenges have been largely overcome due to franchise brands and franchisees banding together through advocacy efforts — which we've been proud to lead.
Through proactive engagement with lawmakers and regulators, and federal court decisions striking down rules like the joint employer standard that struck at the heart of the franchise model, the IFA is ensuring that franchising remains a robust pathway to entrepreneurship and that the door to opportunity can be opened through franchising for generations to come.
The franchise industry can't just talk to lawmakers, of course: We also must talk to the public, and invite them to learn more about this great industry. That's why we host events like our inaugural IFA World Franchise Show, from May 9 to 10 in Miami Beach, Florida, where prospective buyers can find hundreds of franchises across all investment levels to explore.
A bright future for franchising
Franchising is more than a business model — it's a pathway to success for countless entrepreneurs looking to own their own business and make an impact in their community.
As we witness continued growth in 2025, marked by projections of $936.4 billion in franchise output nationwide, the IFA remains steadfast in advocating for franchisees and franchisors alike. By fostering collaboration across all stakeholders, from business owners to suppliers, franchising continues to strengthen its role as a cornerstone of economic growth.
Related: How to Become an Entrepreneur - 8 Tips to Get Your Business Going, Even if You Don't Know Where to Start
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