Alaska Forecast to Lose 16 Franchised Businesses in 2023
Fewer Units Despite Output Growth
The 2023 Franchising Economic Outlook report anticipates a 1.3 percent drop in Alaska’s franchised businesses, ending the year with 1,213 units. The loss of jobs represents 0.2 percent of the 13,091 Alaskans employed by franchises.
The report adds that economic output by all franchises in the state increased to $1.3 billion in 2022, or 1.7 percent growth. That is expected to continue into 2023 by 0.9 percent.
“Even with today’s economic headwinds, franchises in Alaska continue to grow, provide career-building jobs for their employees, and give back to their local communities,” says IFA President and CEO Matt Haller. “After an historic year of growth during the post-pandemic recovery, franchising is predicted to exceed pre-pandemic growth levels, showing the power of the business model and its distinct advantages for prospective business owners.”
At a national level, the report forecasts an increase in the overall number of franchise establishments by almost 15,000 units in 2023, or 1.9 percent, to 805,000 units.
Franchising will add approximately 254,000 jobs in 2023. Growing at 3 percent, total franchise employment is forecasted to reach 8.7 million.
Quick service restaurants, already the business line with the most units nationwide (192,057 estimated in 2022), are projected to have the largest growth, 2.5 percent, along with personal services franchises. Only real estate, the smallest franchise sector, is forecast to shrink nationwide. Business services franchises are forecast to have the largest growth in employment, at 5.2 percent.
The report shows that states have experienced different rates of franchise business growth due to disparities in business climates, migration trends, the labor market, and major industry investments. The top ten states for franchise growth in 2023 are projected to be Texas, Illinois, Florida, Georgia, Tennessee, North Carolina, South Carolina, Arizona, Colorado, and Indiana.
According to the full IFA report, most states are expected to gain franchise units, while Alaska, Hawaii, Minnesota, New York, North Dakota, Vermont, West Virginia, and the District of Columbia are forecast to contract. Alaska’s forecast growth in economic output from franchised businesses is the smallest of any state, and only the District of Columbia is expected to shrink.
The report does not forecast which business lines are most likely to close up shop.