What Georgia’s Economic Outlook Means for Franchisors

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

By Jeff DwyerStaff Writer

6:06AM • 07/06/23

This month, 1851 is taking an in-depth look at ALEC-Laffer’s 16th annual “Rich States, Poor States” Economic Competitiveness Index and how it 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.

For the state of Georgia, these rankings reveal a lot about where the state economy is going and where there is opportunity for their economy to grow.

2023 Economic Outlook Ranking: 12
2023 Economic Performance Ranking: 8

The State

Georgia’s economy has shown impressive growth in recent years. According to IBISWorld, in 2022, the state’s gross state product (GSP) reached $579.7 billion, which is a 2% increase over the past five years.

In 2022, the state’s recorded population stood at approximately 10,887,743 people. In addition to the state’s GSP, Georgia has also seen a steady population growth rate of 0.9% between 2017 and 2022. And in 2023, that number continued to increase, as Georgia is now ranked as the eighth most populated state in the U.S. with just over 11 million residents.

In regard to Georgia’s employment figures, the state continues to recover from COVID-19-related shutdowns. Trading Economics reports that Georgia’s unemployment rate fell to 18% in the first quarter of 2023 from 19.4% in the same month a year earlier. Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business said the state added 182,1000 jobs in 2022 but may lose roughly 7,500 jobs in 2023. However, Dhawan forecasts that, in 2024, the state will add 74,600 more jobs and predicts another 87,600 jobs in 2025.

“The Peach State has experienced a better and faster job recovery than the nation, recouping all lost jobs and gaining more on top of those,” Dhawan noted.

Making Sense of the Data

What does this mean for Georgia’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Georgia has been outperformed by only seven 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. Georgia has seen an absolute domestic migration of around 309K, the ninth-highest number in the country.

The Economic Outlook tells another story about Georgia’s 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, is influenced directly by state lawmakers through the legislative process. In this ranking, Georgia appears at No. 12, with a top marginal personal income tax rate of 5.75% and a top marginal corporate income tax rate of 6.37%.

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 businesses, it shouldn’t discourage them from investing in their dream franchises if they're in a market with a slower growth rate.

Franchise Growth Plans

So what should franchisors do with this information? 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. Though most franchisors take a shotgun approach — meaning wherever a prospective 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, findings within the report should not be the deciding measure for franchisors, but they should play a role in the decision.

Pet Wants

Current units in state: 6
Growth capacity in state: 55
Total jobs created at max growth capacity: 200+
Total unit count: 150
Investment range: $131,350 to $202,500

Pet Wants, the pet wellness franchise that focuses on providing fresh and healthy food to pets, has identified several states across the country for expansion. The brand, which currently has six units in Georgia, believes there’s more room to expand in the state due to its increasing population of pet owners.

“All of our target states are in the top half of states with favorable conditions for strong franchise growth and success,” said Pet Wants president DeNita Carani. “In many cases, year-round favorable weather also plays a strong part in our target markets, allowing our franchise owners to organically connect with their customer base in community events.”

HomeTeam Inspection Service

Current units in state: 9
Growth capacity in state: 2 to 5 more markets
Total jobs created at max growth capacity: 50
Total unit count: 200+
Investment range: $60,100 to $86,800

Although HomeTeam Inspection Service is offering franchise opportunities across the U.S., the home inspection concept is primarily looking to expand in places like Georgia due to the number of people who are moving to the state and purchasing property.

“When identifying growth opportunities and target markets, our Franchise Development Team researches and reviews quite a bit of real estate data to identify trends, growth, and new burgeoning areas,” said Matt Cook, the Franchise Development Manager at HomeTeam Inspection Service. “The markets identified by HomeTeam as 2023 Target Markets, are a mixture of available territories and states which are currently growing faster than the rest of their counterparts across the country.”

Joshua Tree Experts

Current units in state: 0
Growth capacity in state: 24
Total jobs created at max growth capacity: 50
Total unit count: 2
Investment range: $196,760 to $303,091

Joshua Tree Experts, the emerging Pennsylvania-based brand that offers services such as tree care maintenance, plant health care, lawn care and pest control, is gearing up to offer franchise opportunities in a number of locations across the U.S., including Georgia, Massachusetts, Colorado, New Jersey, North Carolina, Ohio and Texas.

“We have noticed that, with the changing environmental conditions, these states are becoming more interested in tree care services,” said Dylan DeGroat, the director of franchise development at Joshua Tree Experts. “We believe that targeting the southern portion of the United States come late July into August will be extremely helpful to providing a successful launch.”

Sunny Street Café

Current units in state: 0
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 23
Investment range: $598,000 to $956,000

Sunny Street Café, the breakfast and lunch concept with 23 units and counting, is targeting southern U.S. markets for expansion. The brand’s plan to open new locations in places like Georgia and Florida is due to these states’ growing populations and ideal climates. The Sunny Street Café team wants to offer its customers year-round outdoor patio seating under blue skies.

“First, we will fill out our existing markets,” said Scott Moffitt, president at Sunny Street Café. “Step number two would be to expand into contiguous markets, where we have an opportunity, brand recognition, and our distribution and support systems already exist. Outside of those strategies, we’re also interested in expanding across the Southeast — Georgia, Florida and the eastern seaboard. North and South Carolina make a lot of sense for us.”

Franchise Brands Headquartered in Georgia:

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

What Georgia’s Economic Outlook Means for Franchisors

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