What Indiana’s Economic Outlook Means for Franchisors

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

By Jeff DwyerStaff Writer

9:09AM • 07/05/23

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 Indiana, 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: 7
2023 Economic Performance Ranking: 19

The State

In 2022, concerns began to surface around a potential short-term recession in Indiana, and state officials predicted the economy would be stagnant come 2023. However, a recent Economic Forecast update from Tom Jackson, a principal economist at S&P Global Market Intelligence, found the state had “stronger than expected economic performance at the end of 2022 into early 2023.” Additionally, the job market seemed to do better than anticipated, as the state’s unemployment rate dropped from 3.9% in 2021 to 3.3% in 2023.

In terms of population, according to the Indiana Business Research Center, in 2022, Indiana had the smallest annual population increase in nearly a decade and only added 19,505 new residents. This is the smallest annual increase since 2015 and is only the second time in 35 years that the state added fewer than 20,000 residents in a single year. Matt Kinghorn, the senior demographer at the Indiana Business Research Center believes this is a main driver for the state’s slow but better-than-nothing recovery.

“Due largely to the ongoing impact on the COVID-19 pandemic, the number of deaths in Indiana remained exceptionally high in 2022,” said Kinghorn. “Add in another year with relatively low fertility rates, and there were only 1,024 more births than deaths in the state last year. For context, Indiana had an average natural increase of roughly 21,150 residents per year between 2010 and 2019.”

Overall, the report released by Tom Jackson notes that Indiana’s economy remains on “solid footing.”

Making Sense of the Data

What does this mean for Indiana’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Indiana has been outperformed by only 18 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. Indiana has seen a decrease in absolute domestic migration by about 19,861, placing the state at 26th in the country.

The Economic Outlook tells another story about Indiana’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, Indiana appears at No. 7, with a top marginal personal income tax rate of 5.17% and a top marginal corporate income tax rate of 4.9%.

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.

Fresh Coat* Painters

Current units in state: 2
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 170+
Investment range: $66,150 to $96,250

Fresh Coat Painters is a residential and commercial painting franchise that operates under the Strategic Franchising Systems umbrella. Fresh Coat is actively looking for new franchise partners in Indiana and across the U.S., including Connecticut, Florida, Illinois, Kentucky, Maine, Massachusetts, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas and Vermont.

“We are very bullish on growth and have made heavy investments in technology, leadership and support to ensure our franchisees can scale their business,” said Fresh Coat president Tara Riley. “We continue to focus on franchise development and expect to pass the 200 mark by the end of the year. We know that means we have to find the right franchisees, help them grow profitable businesses and continue to expand our footprint.”

Wings and Rings*

Current units in state: 6
Growth capacity in state: 5+
Total jobs created at max growth capacity: 50 to 60 per location
Total unit count: 88+
Investment range: $1,129,950 to $1,670,500

Wings and Rings, the Cincinnati, Ohio-based sports restaurant and bar concept, is looking to expand operations in the South, Southwest and Midwest regions of the United States. As such, the brand is seeking to expand in Florida, Texas, Kentucky and Ohio, in addition to Indiana.

Dan Doulen, the director of franchise development at Wings and Rings says there’s an “immediate potential” to open dozens of new Wings and Rings locations in each of these states for the right single-unit and multi-unit franchisees.

Fit For You Franchising

Current units in state: 1
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 18 Fitness Premier 24/7 Clubs
Investment range: $279,849 to $575,499

Fit For You Franchising is actively offering franchise opportunities for its group fitness franchise, Fitness Premier 24/7 Clubs, in Indiana, Wisconsin, Iowa and Tennessee. The brand already has a presence across Illinois and Indiana. While Fitness Premier aims to expand, Emily Janssen, the brand’s director of real estate and construction, says they want to build out their current markets.

“Our business model works best when there’s more than one Fitness Premier location,” said Janssen. “We want to make it an easy transition for them, and we want them to have a good location where they can find success.”

Franchise Brands Headquartered in Indiana:

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

What Indiana’s Economic Outlook Means for Franchisors

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