1851

For franchisors, understanding regional economic patterns and forecasts is integral to developing informed growth strategies and predicting the success of their franchisees. Perhaps even more important than understanding which states are thriving is understanding which states are struggling. This article explores the 25 states that are currently less conducive to franchising, as determined by&nbsp;<a href="https://www.richstatespoorstates.org/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-top-25-worst-state-economies-for-franchising-in-2023-2723133" target="_blank" rel="nofollow">ALEC-Laffer's 16th annual "Rich States, Poor States" Economic Competitiveness Index</a>.This comprehensive index provides a detailed economic forecast for each state based on 15 essential economic policy factors, which have historically influenced state competitiveness and growth. The forecast helps identify states with less robust economies, potentially hindering brand success in the next decade.ALEC-Laffer's report provides two crucial rankings: economic performance and economic outlook. The first measures a state's performance over the past decade, while the latter predicts future performance based on the current status of 15 state-policy factors. In general, the report indicates that states with lower taxes and spending typically experience higher growth rates.For example, in a state like New York, an opportunity for franchise growth may not be the most promising. Why? Compare it to Utah. New York’s personal income tax progressivity is nearly four times higher than Utah’s — the state with the best prospective economic outlook. Also, New York’s top marginal corporate tax rates are 18.28% compared to Utah’s 4.85%.Here are the other 24 states, ranked from worst to best, that present greater challenges for franchising, based on the Economic Competitiveness Index:<ol><li><a href="https://1851franchise.com/what-new-yorks-economic-outlook-means-for-franchisors-2722920">New York</a></li><li><a href="https://1851franchise.com/what-vermonts-economic-outlook-means-for-franchisors-2723015">Vermont</a></li><li><a href="https://1851franchise.com/what-minnesotas-economic-outlook-means-for-franchisors-2723035">Minnesota</a></li><li><a href="https://1851franchise.com/what-new-jerseys-economic-outlook-means-for-franchisors-2723025">New Jersey</a></li><li><a href="https://1851franchise.com/what-illinois-economic-outlook-means-for-franchisors-2723012">Illinois</a></li><li><a href="https://1851franchise.com/what-californias-economic-outlook-means-for-franchisors-2723095">California</a></li><li><a href="https://1851franchise.com/what-maines-economic-outlook-means-for-franchisors-2722960">Maine</a></li><li><a href="https://1851franchise.com/what-oregons-economic-outlook-means-for-franchisors-2723014">Oregon</a></li><li><a href="https://1851franchise.com/what-hawaiis-economic-outlook-means-for-franchisors-2722962">Hawaii</a></li><li><a href="https://1851franchise.com/what-marylands-economic-outlook-means-for-franchisors-2722918">Maryland</a></li><li><a href="https://1851franchise.com/what-rhode-islands-economic-outlook-means-for-franchisors-2723037">Rhode Island</a></li><li><a href="https://1851franchise.com/what-connecticuts-economic-outlook-means-for-franchisors-2723034">Connecticut</a></li><li><a href="https://1851franchise.com/what-new-mexicos-economic-outlook-means-for-franchisors-2723036">New Mexico</a></li><li><a href="https://1851franchise.com/what-massachusetts-economic-outlook-means-for-franchisors-2722942">Massachusetts</a></li><li><a href="https://1851franchise.com/what-nebraskas-economic-outlook-means-for-franchisors-2713976">Nebraska</a></li><li><a href="https://1851franchise.com/what-pennsylvanias-economic-outlook-means-for-franchisors-2722985">Pennsylvania</a></li><li><a href="https://1851franchise.com/what-washingtons-economic-outlook-means-for-franchisors-2722967">Washington</a></li><li><a href="https://1851franchise.com/what-montana-s-economic-outlook-means-for-franchisors-2722984">Montana</a></li><li><a href="https://1851franchise.com/what-iowas-economic-outlook-means-for-franchisors-2722964">Iowa</a></li><li><a href="https://1851franchise.com/what-missouris-economic-outlook-means-for-franchisors-2723013">Missouri</a></li><li><a href="https://1851franchise.com/what-kansas-economic-outlook-means-for-franchisors-2722917">Kansas</a></li><li><a href="https://1851franchise.com/what-delawares-economic-outlook-means-for-franchisors-2722916">Delaware</a></li><li><a href="https://1851franchise.com/what-west-virginias-economic-outlook-means-for-franchisors-2722941">West Virginia</a></li><li><a href="https://1851franchise.com/what-kentuckys-economic-outlook-means-for-franchisors-2722936">Kentucky</a></li><li><a href="https://1851franchise.com/what-louisianas-economic-outlook-means-for-franchisors-2722983">Louisiana</a></li></ol>Despite the ranking, aspiring entrepreneurs should not be deterred from investing in a franchise. If market conditions are favorable and a brand addresses a need in that market, franchisees can still thrive and grow their businesses. However, entrepreneurs in states with lower economic outlook rankings might consider franchising opportunities with lower entry costs.For franchise owners and potential investors, the data provided by ALEC-Laffer’s 16th annual “Rich States, Poor States” Economic Competitiveness Index provides crucial insights. However, even in states with lower economic outlooks, the right business strategies and understanding of market needs can lead to successful franchising opportunities anyway.

The Top 25 Worst State Economies for Franchising in 2023

1851 Franchise

Here are some of the states that have the weakest opportunities for franchise success, based on ALEC-Laffer’s most recent state-by-state comparison of economic competitiveness and outlook.

the-top-25-worst-state-economies-for-franchising-in-2023

Senior Care Authority

“You Are Family”: How Senior Care Authority Creates Deep, Lasting Connections

you-are-family-how-senior-care-authority-creates-deep-lasting-connections

Mosquito Hunters

Photo of Pest Hunters and Humbug Holiday Lighting teams

Mosquito Hunters Triples the Opportunity: 3-in-1 Franchise Model Fuels Growth

mosquito-hunters-three-in-one-franchise-model

Shuckin' Shack

Photo of Shuckin' Shack Oyster Bar beverages

Shuckin’ Shack Looks To Expand South Carolina Presence With Growth in Florence

shuckin-shack-franchise-florence-south-carolina

United Water Restoration Group

The Importance of Quick Response in the Water Restoration Business: How United Water Restoration Group Leads the Way

the-importance-of-quick-response-in-the-water-restoration-business-how-united-water-restoration-group-leads-the-way

Senior Care Authority Celebrates Major Wins and Welcomes Four New Franchisees in Q1 2025

senior-care-authority-celebrates-major-wins-and-welcomes-four-new-franchisees-in-q1-2025

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Franchise Face-Lifts: Why Major Restaurant Brands Are Betting Big on Remodels

franchise-face-lifts-why-major-restaurant-brands-are-betting-big-on-remodels

How New Tariffs Are Causing Price Hikes and Surcharges for U.S. Businesses and Franchises - 1851

Tariffs Prompt Price Hikes, Surcharges as Businesses (and Franchises) Brace for Rising Costs 

tariffs-prompt-price-hikes-surcharges

Pizza Hut - EYM Group - Chapter 11 Bankruptcy - 77 Pizza Hut Locations Sold - 1851 Franchise

77 Pizza Hut Locations Sold After Franchisee Bankruptcy Filing

pizza-hut-franchisee-bankruptcy-eym-group

Jersey Mike's - Blackstone - Global Growth - 1851 Franchise

Jersey Mike’s Ramps Up Global Growth Following Blackstone Acquisition

jersey-mikes-blackstone-growth

Layoffs Surge to Pandemic-Era Highs, Opening Doors for Franchise Growth

layoffs-surge-to-pandemic-era-highs-opening-doors-for-franchise-growth

Paris Baguette Ranks Among Top Franchises on Entrepreneur’s Franchise 500® for 2025 - 1851 Franchise

Paris Baguette Ranks Among Top Franchises on Entrepreneur’s Franchise 500® for 2025

paris-baguette-ranks-among-top-franchises-on-entrepreneurs-franchise-500-for-2025

&pizza - Fast-Casual Pizza Chain Begins Franchising - 1851 Franchise

&pizza Embraces Franchising To Fuel Bold New Growth Strategy

andpizza-franchising-ceo-mike-burns

CFOs See Recession as Likely in ’25; Why Now Is the Time To Water the Franchise Buyer Seeds

cfos-see-recession-as-likely-in-25-why-now-is-the-time-to-water-the-franchise-buyer-seeds

Franchisee spotlight image with Randy and Sandy Craft, Children's Lighthouse logo on blue background

The Crafts’ Successful Journey from New Parents to Children’s Lighthouse Franchisees

the-crafts-successful-journey-from-new-parents-to-childrens-lighthouse-franchisees

Lindora’s New President Discusses Franchise Growth and the Future of Health and Wellness

lindoras-new-president-discusses-franchise-growth-and-the-future-of-health-and-wellness

franchisee spotlight graphic with photo of Venetya Evans and Sylvan Learning logo

IT Leader Celebrates One Year of Sylvan Learning in Simi Valley: A Passion for Education and Technology Drives Her Mission to Help Students Succeed

it-leader-celebrates-one-year-of-sylvan-learning-in-simi-valley

Military Veteran and Craft Beer Enthusiast to Bring Voodoo Brewing Co. to Toledo, Ohio

military-veteran-and-craft-beer-enthusiast-to-bring-voodoo-brewing-co-to-toledo-ohio

Amateur Bodybuilder and Business Partner Bring Passion for Fitness to World Gym Franchise in Fulton, New York

amateur-bodybuilder-and-business-partner-bring-passion-for-fitness-to-world-gym-franchise-in-fulton-new-york

The Top 25 Worst State Economies for Franchising in 2023

MORE STORIES LIKE THIS