Franchising had an exceptional year in 2021, and 2022 looks to be another strong year of recovery. Bolstered by both the strengthening labor market and steady consumer spending, franchising is expected to continue to expand, trending upwards with the United States’ overall economic progression, but the pace of the growth in 2022 is most likely to moderate, due to the current headwinds in the economy.
In this series, we will be focusing on predictions for 2022 based on various segments, starting with industries. A selection of highlights on the 2022 forecast for industries are:
- Franchised businesses in the business services sector are expected to contribute a total of $99.8 billion in output to the economy in 2022, an improvement of 4.7%
- The Commercial & Residential Services sector is projected to reach 77,708 establishments in 2022, a continued advancement from last year’s estimated number of businesses of 75,678.
- The housing market is expected to have another strong year in 2022 because of strong consumer demand. Driven by intensified needs from people looking for housing inspection services, real estate brokers, appraisers, and property management services, franchises in the sector are all expected to see further growth.
- Franchised businesses in the lodging segment are expected to contribute a total of $87.1 billion in output to the economy, improving by 5.2% compared to 2021 levels.
- 2022 is a major opportunity for the retail sector to restructure outdated supply chains, inventory standards, and other elements to reinvent the store front for the digital age.
- We forecast that the Personal Services sector is going to be the head of franchising expansion in 2022, experiencing the highest growth both in number of establishments and in output. The output is anticipated to increase by 10.5% to $39.6 billion, slightly outpacing the pre-pandemic level.
- According to Boston Consulting Group, “Across the restaurant industry, digital ordering now represents 28% of all orders compared with 10% before the pandemic, with most brands showing increases.”
- Looking ahead, automation will make its way into restaurant operations, with robot and drone delivery services becoming more common and robots conducting routine kitchen tasks.
The 2022 Economic Outlook for Franchising report was prepared by FRANdata, the research partner of the International Franchise Association (IFA). Read the full report here. Learn more about the FRANalyst who authored the report, Christina Niu, here.