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What Alaska's Economic Outlook Means for Franchisors

If you’re a franchisor looking to develop your business in Alaska, you’ll want to consider the state’s policy variables and growth rates when scaling your plans.

This summer, ALEC-Laffer published its annual Economic Competitiveness Rankings, which forecasts a state’s current standing within 15 state policy variables. The report features two different rankings: Economic Outlook — a forecast based on a state’s current standing in 15 state policy variables — and Economic Performance — a retrospective measure based on a state’s performance over a 10-year period from 2008 until 2018. For the state of Alaska, these rankings reveal a lot about where the state economy is going and where there is opportunity for their economy to grow. 

  • 2020 Outlook Ranking: 26
  • 2008–2018 Performance Ranking: 48


The State

Alaska is known for its vast natural resources and much of their economy relies on the harvesting of oil, minerals, lumber, and fish. The state’s remoteness from major markets and cold climate at times make it difficult — not to mention costly — to extract these resources for enterprise. 

Since the advent of COVID-19, Alaska’s cornerstone industries have suffered greatly. Fisheries in particular have been hit hard in light of a suffering global restaurant industry. Oil rigs have been on the receiving end of federal budget cuts as well as the global trend away from the use of fossil fuels. The economy has even affected the education industry; in mid-September, it was reported that the pandemic has cost the University of Alaska $15 million in revenue and funding. As a result of the multitude of hard-hit sectors, Alaska’s unemployment has skyrocketed and has a long road to recovery.

Making Sense of the Data

What does this mean for Alaska’s economy? To start with the Economic Performance report, the index shows that within the past ten years, Alaska has been outperformed by 47 other state economies. The performance index is based broadly on a state’s performance within State Gross Domestic Product, Absolute Domestic Migration and Non-Farm Payroll Employment. The categories that slowed the resource-driven state down was their Non-Farm Payroll Employment and Gross GDP status. Alaska only grew 1.2 percent in Non-Farm Employment, and remained stagnant at 0.0 percent for state GDP. The Land of the Midnight Sun’s highest ranking in these three categories was 31 for Absolute Domestic Migration as a result of a 45,514 person loss from their population.

The Economic Outlook tells another story about the Alaska economy. The ranking is based on a state’s current standing in 15 state policy variables. Each of these factors, ranging from sales tax Burden to state minimum wage, are influenced directly by state lawmakers through the legislative process. In this ranking, Alaska is seated 26. Although they’re ranked in the middle of the pack, the Last Frontier has the capacity to outperform more than half of the union.  

The report indicates that, generally speaking, states that spend and tax less experience higher growth rates than states that spend and tax more. While this is an important finding for entrepreneurs looking to start their own business, it shouldn’t discourage them from investing in the franchise of their dreams if they're in a market with a slower growth rate. For states like Alaska, this presents an opportunity to grow. The dollar is projected to stretch further in Alaska than in most other states, and, in a time when natural resources — particularly oil — are in low demand, there will be Alaskans looking for new career opportunities. 

When it comes to deciding where franchisors should develop their brand, it’s always important to look at the complete picture of what the region has to offer. Although in the past Alaska has been significantly behind in performance, its potential for growth is improving exponentially and is likely to continue upward and outward into a new frontier. 

Franchise Growth Plans

So what should franchisors do with this information? Though most franchisors take a shotgun approach — meaning wherever a prospect franchisee inquires, the franchisor will typically entertain that marketplace — the strategy of looking at these overall policies can help them scale their business at a more efficient rate. With that said, the findings within the report should not be the deciding measure for franchisors, but they should play a role in the decision. 


  • Current units in state: 0
  • Growth capacity in state: 5+
  • Total jobs created at max growth capacity: 75+

New York-based fitness franchise GYMGUYZ also has its sights set on Alaska for further franchise growth as it expands out from established territories in the East Coast and Mid-Atlantic. 

Footprints Floors*

  • Current units in state: 0
  • Growth capacity in state: 5+
  • Total jobs created at max growth capacity: 75+

Linton Dowling, Footprints Floors’ Marketing Director, seconded the notion of Alaska’s potential. According to the home improvement franchisor, their leadership team uses high-quality technology to understand what towns within each state offer the greatest potential for their locations and rely on that data to promote franchising opportunities.

“When targeting markets, we rely heavily on our mapping software,” said Dowling. “We use this to understand where our marketing dollars will reach the widest audience. This is important, particularly as a developing/growing brand with limited marketing spend. We then focus on numerous tools such as our Development CRM, GA, and GSC. These data points will provide scope as to what the ‘booming’ market generating the most interest is. Collating that with our sales team feedback gives us their real-time account of why particular states are booming or soon to be due to lead feedback.”

*This brand is a paid partner of 1851 Franchise. For more information on paid partnerships please click here.