Economic strain has been a constant conversation for the last several years. Like many things, the economy suffered immense disruptions during and after the COVID-19 pandemic. Breakdowns in global supply chains, labor shortages, and increased consumer spending from stimulus checks culminated in some of the highest inflation rates in decades, peaking at 9% in June 2022. Other factors like the rise in interest rates and a growing wage gap only compounded the pressure for business owners and consumers. Flash forward to 2026, and experts are reporting steady growth in franchising.

As the leading franchise consulting company, we examined the many reasons why franchising stands out as a popular business expansion model for existing and prospective business owners in our rebounding economy.

Setting the Stage for Recovery

While we’ve addressed the variables at play for the economic turmoil, there are equally powerful forces that have spurred economic expansion. To start, global and national supply chains that were disrupted in the wake of 2020 have finally stabilized, making way for adjusted pricing and normalized lead times. Adjustments to U.S. tax policies have also contributed to brighter conditions. The Big Beautiful Bill, signed in July 2025, cemented a series of tax cuts outlined in the 2017 Tax Cuts and Jobs Act and raised state and local deduction caps. We provided a more in-depth discussion on how this legislation is spurring growth in franchising in a previous article.

As fluctuations in discretionary consumer demand calmed, wages increased, and the labor market settled, the effects of consumer goods and exports were able to make significant contributions to overall GDP. Other strides in GDP were attributed to private investments in various industries and technological advancements across the nation. Similarly, the headwinds associated with the U.S.’s strong tariff policy have finally begun to fade, giving consumers and businesses alike a reprieve from the international pressures.

Overall, these economic forces have bolstered consumer confidence, both in day-to-day life and the entrepreneurial aspirations that primed markets for growth in franchising.

A Closer Look at Growth in Franchising

The International Franchise Association (IFA), in partnership with FRANdata, recently released the 2026 Franchising Economic Outlook, a comprehensive analysis and forecast for economic conditions in the franchising industry. Franchising, in particular, has been highlighted by economists and researchers as one of the fastest-growing sectors heading into the spring and summer months.

In 2025, franchise operations were still navigating a year of mixed market signals in everything from limited borrowing capabilities to shifting consumer demand. As a result, many franchises assumed a more deliberate business strategy to mitigate risk and maximize profitability. Part of this approach required leveraging the competitive advantages of a franchise model. Nationwide franchises emphasized operational efficiency at the unit level by tightening control over costs, sharing resources between corporate and local entities, and opting for careful and targeted expansions rather than sweeping multi-unit investments. Other characteristics like national brand recognition, compelling promotions and marketing campaigns, as well as more trusted relationships with lenders, made franchise operations more resilient to economic downturns compared to other independent business models.

By leveraging procedures, support structures, and purchasing power, these operations demonstrated their abilities to endure the toughest economic conditions and sustain lasting growth in franchising.

Franchising Market Predictions for 2026

Given these advantages, the report provided by the IFA and FRANdata shared its 2026 projections for growth in franchising. Based on collected data and the ongoing market situation, the research team believes franchising operations will expand by 1.5%, translating to approximately 845,000 new units added across a broad spectrum of franchise types. The surge in locations will then spur an estimated 1.8% increase in employment, adding 156,000 jobs for a total of 8.9 million jobs related to franchising. Together, franchise output is projected to rise by 1.6%, bringing total economic output well beyond $920 billion. The report also estimated the franchising industry will contribute 3%, or $558.4 billion, toward total US GDP in 2026.

These market predictions also shed light on the specific segments expected to experience the most growth in franchising. Leading the charge are child service providers like The Goddard School and Primrose Schools, and commercial and residential service markets like Molly Maids and SERVPRO, with a 3.2% expansion rate due to increased consumer demand. Motivations in values-based purchases and essential spending are also predicted to drive 2.3% growth in the retail food, products, and services category, positioning operations like Kilwins Chocolates, Ace Hardware, and others for expansion. Even aging demographics and a growing emphasis on health are projected to generate a 2.1% increase in wellness franchises like Planet Fitness and StretchLab.

Through the advantages of codified structural support, we will see growth in franchising as a testament not only to the business model’s ability to stay the course, but also to the ways it can leverage moderate growth for sustainable success well into the future.

Seize the Opportunity with FranSource

Have recent economic conditions led you to put your business expansion plans on hold? Even with positive market predictions, are you still feeling hesitant to make the jump? At FranSource, we understand the hesitation many owners feel regarding the potential risks involved in growing their businesses, especially when it comes to externalities like market fluctuations.

Even after recent economic downturns, franchising remained a steady mechanism for protecting business owners and their franchisee partners from its full effects. Instead, it provided vital systems, procedures, and partnerships that brought order to an otherwise unpredictable environment. These advantages are catalysts that will drive growth in franchising through 2026 and beyond.

As franchise development specialists, we’ve had the honor of helping hundreds of clients achieve their business expansion goals by harnessing the unique strengths of franchising. Using a detailed and dedicated approach, we walk alongside clients to build franchise networks with operational, legal, sales, and marketing processes personalized to your specific business needs. Contact us today to seize the opportunity to expand your business through franchising.