IFA Says Franchise Output in 2026 to Exceed $920 Billion
Franchise employment, economic output and unit counts are all primed for growth in 2026. In its annual economic outlook report, the International Franchise Association expects a strong output despite subdued consumer demand.
Economic output from franchises in the United States is continuing its upward trajectory despite persistent challenges in recent years.
In 2025, the output was estimated at $907.2 billion, up from $891.1 billion in 2024. The increase, according to the International Franchise Association’s annual economic report, was aided by inflation easing to 2.7 percent from 2.9 percent. Additionally, wage growth in the labor market stabilized.
Franchises, however, also were met in the last year with a slowdown in consumer spending growth, from 5.7 percent in 2024 to 3.7 percent in 2025, leading to some softer same-store sales and heightened top-line pressure. For the year ahead, with policy stabilization and anticipated Federal Reserve rate cuts, the IFA is projecting the franchise output to grow by 1.6 percent, exceeding $920 billion in 2026.
It’s one of several growth metrics expected this year. The report, published in partnership with the research firm Frandata, noted a projection of 1.5 percent in establishment expansion, with franchise units expected to reach 850,000. Employment in the franchise space is also expected to rise by 1.8 percent, or 156,000 employees, for a workforce of nearly 8.9 million.
By category, the industries expected to have the most growth in economic output are child services and commercial/residential services, both increasing 3.2 percent. Child services is expected to increase from $22 billion to $22.7 billion, while commercial and residential services is estimated to rise from $138.8 billion to $143.3 billion.
The boost in child services is driven by the rise of dual-income households and growing awareness of early childhood education. Commercial and residential services, meanwhile, is helped by an aging building stock, particularly homes, with the only 2 percent of houses built after 2020.
The next high growth category is retail at 6.3 percent, followed by health and wellness at 2.1 percent, full-service restaurants at 2 percent, personal services and lodging both at 1.8 percent, and business services at 1.6 percent. Lower growth rates are expected for automotive and quick-service restaurants, both anticipated at 0.5 percent, and real estate at 0.4 percent, with constrained consumer spending.
SOURCE: FRANCHISETIMES.COM