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.

By Victoria CampisiStaff Writer

10:10AM • 07/04/23

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 Idaho, 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: 4
2023 Economic Performance Ranking: 4

The State

In 2022, the real gross domestic product (GDP) of Idaho was $84 billion. This was an increase over 2021, when the state's GDP was $80.09 billion.

Following an influx of people moving from other states, Idaho was the second-fastest growing state in the country in 2022, with a population that nearly reached 2 million people for the first time in July, according to the U.S. Census Bureau. Compared to the previous estimate in July 2021, Idaho grew by 1.8% to an estimated population of 1,939,033 people in July 2022. Only Florida grew at a faster rate in terms of percentage growth.

As of May 2023, Idaho’s seasonally adjusted unemployment rate was 2.6%, remaining unchanged for the fourth consecutive month. May’s labor force, or workers who are employed or unemployed but looking for work, also increased by 1,719 people (0.2%) to 962,466.

Making Sense of the Data

What does this mean for Idaho’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Idaho has been outperformed by only three 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. Idaho has seen an absolute domestic migration of 196,129, the 12th highest in the country.

The Economic Outlook tells another story about Idaho’s economy. The ranking is based on the 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, Idaho appears at No. 4, with a top marginal personal income tax rate of 5.8% and a top marginal corporate income tax rate of 5.8%.

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 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, findings within the report should not be the deciding measure for franchisors, but they should play a role in the decision.

Dog Training Elite*

Current units in state: 0
Growth capacity in state: As many as possible
Total jobs created at max growth capacity: N/A
Total unit count: 324
Investment range: $159,050 to $186,750

Dog Training Elite, the dog training franchise that focuses on empowering dog owners through strong relationships with their pets, has identified Idaho as a prime market for franchise expansion after seeing interest from prospective franchisees.

“Our franchise development team has candidates that are interested in [Idaho],” said Nicole Evans, Vice President of Development.

HomeTeam Inspection Service

Current units in state: 1
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 200
Investment range: $50,100 to $76,800

HomeTeam Inspection Service, the home inspection concept that leverages a team model for a quicker, more efficient service, identified Idaho as a prime market for franchise expansion after conducting market research based on trends, growth and growing areas.

“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 Adam Long, president of HomeTeam. “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.”

Slim Chickens

Current units in state: 1
Growth capacity in state: N/A
Total jobs created at max growth capacity: 75 per location
Total unit count: 200+
Investment range: $1,600,000 to $4,000,000

Fast-casual chicken chain Slim Chickens is also targeting Idaho for Development. It will open its first location in Meridian in August. “Our plans are to open some 20, 21, in Southern Oregon and Southern Idaho,” Oscar Garcia, operations director for franchisee Ultra Vortex Chicken, told Idaho Statesman.