Resilient by Design: Franchising is Poised for Growth Amid Uncertainty

Even in an era marked by challenging headwinds—lingering inflation, high borrowing rates, and an unpredictable regulatory climate—the franchise community has not only survived, but thrived. As we gathered in Las Vegas at the 2026 IFA Annual Convention under the theme of Evolve, IFA members representing all aspects of the franchise model shared this sentiment of enthusiasm for what’s ahead following a year of adjustment and recalibration.

As we look ahead, it’s clear that franchising is better positioned to navigate an improving economic environment than independent businesses, and that’s no accident. It’s a testament to our model and the people and policies that power it.

According to IFA’s “2026 Franchising Economic Outlook,” franchising’s economic output is projected to rise by 1.6% this year.

Our forecast predicts an increase of franchise units from 832,521 to 845,000 units, an uptick of 1.5%. Franchise employment is anticipated to grow by more than 150,000 jobs (1.8%) to nearly 8.9 million jobs.

These are more than just numbers or statistics; they are proof points of the inherent strength of franchising. Our model empowers individuals to become small business owners with the backing of proven systems. Franchisees benefit from established brands with trusted playbooks and peer networks that mitigate risks and increase opportunities.

While franchising is often associated with fast food, child services and commercial and residential services are expected to be the fastest growing industries in 2026, both expanding at respective rates of 3.2%. The increase in child services has been fueled by the rise of dual-income households and more awareness of the importance of early childhood education. Growth in residential services is attributed to an uptick in repairs and maintenance, lawn care, and pest control. Those trends are expected to continue upward as homeownership increases amid further expected interest rate cuts from the Federal Reserve.

This year, the health and wellness industry’s upward trajectory is expected to continue at an above-average growth rate of 2.1%. Since the Covid-19 pandemic, consumer focus on preventive healthcare and overall wellness has propelled the sector to become the third-largest franchise industry, a trend poised to accelerate with the interest in healthier living.

For the first time since the pandemic, full-service restaurants are expected to outpace quick-service restaurants (QSR) in growth. Among QSR, consumer preferences are shifting toward “experiential dining” rather than purely value-driven offerings. Similarly, in the lodging industry, high-income consumers are expected to continue spending on personalized and experiential luxury travel.

IFA’s forecast also illustrates how franchise establishments play an increasingly important role in creating labor demand for young people entering the workforce. With youth unemployment at 10.4% in 2025, which is more than double the national average, franchise establishments offer opportunities and open doors to those beginning their professional journeys.

IFA’s economic outlook illustrates the importance of sound policies that support our model. Business-friendly policies and lower costs of living have fueled population growth in the Southeast and Southwest, which are expected to maintain their positions as the top regions for franchise expansion at 1.7% and 2.5%, respectively. Nationwide, the top 10 fastest-growing states for franchising in 2026 are Texas, Florida, Georgia, Arizona, North Carolina, Colorado, Michigan, Utah, Ohio, and Maryland. With relative affordability and potential for expansion, Michigan, Ohio, and Utah have emerged as newcomers on the top 10 list, and we look forward to their continued growth.

Other green shoots in the franchise economy include key provisions in last year’s budget reconciliation bill, especially the permanence of the Section 199A qualified business income deduction and 100% bonus depreciation, taking hold. The long-term certainty on these and other tax issues was a result of many months of IFA advocacy and support from the franchise community.

IFA continues its laser-like focus on the bipartisan American Franchise Act, which will codify a clear federal joint-employer definition and end the decade-long regulatory whiplash, bringing even greater growth and certainty to the business model. Since the bill’s introduction last fall, IFA has led this charge on Capitol Hill, engaging lawmakers and highlighting franchising’s role in job creation and economic mobility. In 2026, the measure gained the endorsement of the bipartisan Problem Solvers Caucus and now has more than 80 cosponsors in the U.S. House.

Looking ahead, franchising’s future remains bright. As economic uncertainties evolve, our model’s blend of independence and support will keep us ahead. If 2025 was a year of recalibration for franchises, 2026 should be marked by steady and consistent brand growth, franchisee unit-level economics, and wage growth. We’re excited for what the future holds.

Matt Haller is president and CEO of the International Franchise Association.