bannerFranchise News

What Idaho’s Economic Outlook Means for Franchisors

If you’re a franchisor looking to develop your business in Idaho, 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 that 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 backward-looking measure based on a state’s performance over the past 10 years. For the state of Idaho, the future of their economy looks bright with a ranking of 11 among the 50 states for performance and third overall for outlook. 

The State

Over the past few months, Idaho — like all other 49 states in the union — has been met with ups and downs as a result of the COVID-19 pandemic. Though the advent of the virus has had an adverse effect on the United States’ economy as a whole since early March, Idaho has emerged as the first state to rebound economically. Idaho’s rebound has been steady since April and has consistently led the 50 states for best financial shape with tax revenues beating the forecast by $37 million in  August. The Gem State also ranked third among the states for lowest unemployment. Though Idaho hit a state-record-high unemployment rate of 11.8% in April — the height of the COVID-19 pandemic — the state has since dropped down to 5% in August.

Governor Brad Little recently said, “We’re far better off in Idaho than elsewhere, thanks to our handling of the pandemic and fiscal conservatism in state government – our management of the state budget and watchful eye on regulations. We are well-positioned to handle the ongoing impacts of COVID-19.”

Making Sense of the Data

What does the state of Idaho’s economy mean in tandem with the State Competitiveness Index? To start with the Economic Performance report, the index shows that within the past ten years, Idaho has been outperformed by only 10 other state economies — Texas, Washington, and Utah led the pack in the top three performing states. The performance index is based broadly on a state’s performance within State Gross Domestic Product, Absolute Domestic Migration and Non-Farm Payroll Employment. Though much of Idaho’s economy relies on agriculture, the state has diversified its economy significantly since 2008 and ranked sixth overall at a 16.3% growth rate for Non-Farm Payroll Employment.

The Economic Outlook tells another story about the Idaho 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. Idaho ranked third overall for outlook among the other 50 states, an impressive ranking in any economy. With Idaho’s recovery from the COVID-19 pandemic moving swiftly, its economy remains on track to continue to grow and perform well.

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 their dream franchise if they're in a market with a slower growth rate. For Idaho, this means business owners have a great deal to grow with the state, as their dollar can be stretched further than most.

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. 

Amazing Lash

  • Current units in state: 0
  • Growth capacity in state: 5+
  • Total jobs created at max growth capacity: 15+

JD Prager, Sr. Director of Real Estate and Construction for WellBiz BrandsAmazing Lash’s parent company — said the brand has room to grow in Idaho.

“To determine our top development markets, we did a white space analysis and found that both brands have a growth potential of 1,000+ units,” said Prager. “That leaves a lot of geography to tackle. So, we took a two-pronged approach. Seeing as though both brands are membership-based models, we have customer data on everyone who receives a service at all of our locations.”

Workout Anytime

  • Current units in state: 1
  • Growth capacity in state: 5
  • Total jobs created at max growth capacity: 35

Terri Harof, Director of Franchise Development at Workout Anytime, said that Idaho is a state that is primed for growth.

“Idaho is a fantastic target market for growth,” said Harof. “We have one multi-unit franchisee who relocated to Idaho from Florida. They had been very successful in Florida, but they saw a big opportunity to grow in Idaho.”

Beef O’ Brady’s

  • Current units in state: 1
  • Growth capacity in state: 20
  • Total jobs created at max growth capacity: 35

Jamie Cecil, vice president of franchise sales at Beef O’ Brady’s, said population has everything to do with their strategic growth.

“As of right now, we have one Beef O’ Brady’s location in Boise,” said Cecil. “We’re always looking to grow, though population density has a lot to do with our strategy. It’s all about numbers and finding the right people to franchise with us.”

Franchise Brands Headquartered in Idaho