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1851 Publisher Nick Powills explains how franchisors and franchisees can tap into ALEC-Laffer’s economic report to make informed decisions about expansion.
In the fast-paced world of franchising, staying informed about economic outlooks and state-specific data can be crucial for both franchisors and franchisees. This month, 1851 is taking an in-depth look at ALEC-Laffer’s 16th annual “Rich States, Poor States” Economic Competitiveness Index. In a recent webinar, 1851 Franchise Publisher Nick Powills explained how the report can be useful to franchisors as they expand their footprints.
The report ranks all 50 states based on two criteria: 1) Economic Outlook, a state’s current standing in 15 state policy variables; 2) Economic Performance, a retrospective measure based on a state’s performance over the past 10 years. This data includes information about economic conditions, cost of living, salaries, commuting and air quality. By analyzing this information, franchisors and franchisees can gain valuable insights into the potential of different states for business growth.
All franchise brands need a well-defined growth strategy to expand successfully. Here are some factors to consider while formulating a growth strategy:
The state economic outlook is a powerful tool for franchise expansion decision-making. Understanding the value of the dollar and the overall quality of life in a state can significantly impact franchise success. States with a higher value for the dollar and a better quality of life can offer more favorable conditions for franchise growth.
Let's take a look at an example from the report. Utah, ranking consistently at the top, offers a high value for the dollar and a better quality of life. Franchisors interested in expanding into Utah can benefit from lower costs of living and potentially higher salaries, leading to increased franchisee success metrics.
On the other hand, states like Illinois, ranking lower, might present higher costs of living and taxes, making it less favorable for franchise growth.
For franchisors, focusing on states with lower costs of living and a higher value for the dollar can increase the likelihood of franchisee success and higher gross sales, resulting in better royalties.
For franchisees, choosing states with a better economic outlook means their investment will have more significant potential for growth and profitability.
This month, 1851 Franchise has been offering a user-friendly breakdown of state-specific data, making it easier for both franchisors and franchisees to analyze each state's potential. The articles not only provide insights into the data and rankings, but also highlight real-world examples of franchisors and franchisees operating in each specific state.
Check out our full list of state-by-state articles, ranked from best to worst based on the Economic Competitiveness Index, here:
While the economic outlook report is a valuable tool, it is essential to remember that success in franchising also depends on factors like hustle, grit and determination. States ranking lower in the report should not discourage potential franchisees, as their dedication and hard work can still lead to success.
Overall, leveraging state information is crucial for making informed decisions in the world of franchising, helping franchisors and franchisees prioritize growth strategies and target states with the highest potential for success. Remember that while data is essential, the determination and dedication of franchisees play a significant role in achieving success in any state.
So, whether you are a franchisor or a franchisee, take advantage of the state economic outlook report to pave the way for your journey in franchising.
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