What Kansas’ Economic Outlook Means for Franchisors

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

By Victoria CampisiStaff Writer

8:08AM • 07/14/23

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 Kansas, 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: 30
2023 Economic Performance Ranking: 39

The State

In the fourth quarter of 2022, the real gross domestic product (GDP) growth rate for Kansas was 0.7% per year, compared with 1.9% the previous quarter. Industries including mining, quarrying, and oil and gas extraction were 25.2%, the highest in the state.

Kansas's population increased eight out of the 11 years between 2010 and 2021. It saw the largest annual population increase of 0.8% between 2019 and 2020, while its largest decline took place between 2016 and 2017 when the population dropped 0.1%. Between 2010 and 2021, the state grew by an average of 0.2% per year. Currently, the state has a growth rate of 0.57% annually, which ranks 31st among all 50 states.

In May, data from the Bureau of Labor Statistics showed that the unemployment rate in Kansas was 2.9%, lower than the national average, ranking it 20th in the country.

Making Sense of the Data

What does this mean for Kansas’ economy? To start with the Economic Performance report, the index shows that within the past 10 years, Kansas has been outperformed by 38 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. Kansas has seen an absolute domestic migration of -114,603, ranking it 39th in the country.

The Economic Outlook tells another story about Kansas’ 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, Kansas appears at No. 30, with a top marginal personal income tax rate of 5.7% and a top marginal corporate income tax rate of 7.0%.

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.

Paris Baguette*

Current units in state: 1 (coming soon)
Growth capacity in the state: N/A
Total jobs created at max growth capacity: 15 to 20 per location
Total unit count: 4,000+
Investment range: $652,565 to $1,750,900

Bakery café concept Paris Baguette is expanding franchise operations in Kansas, with its most recent signing in Wichita and Kansas City.

“We are thrilled to announce additional expansion within Kansas,” explained Mark Mele, chief development officer. “There’s a tremendous amount of opportunity in the bakery café space. No other bakery café franchisors are doing what Paris Baguette is on the same scale.”

A&W Restaurants*

Current units in state: 12
Growth capacity in the state: 5-15
Total jobs created at max growth capacity: N/A
Total unit count: 1,000+
Investment range: $871,000 to $1,469,554 for a freestanding restaurant; $401,000 to $1,051,088 for an inline restaurant; and $276,000 to $704,000 for a captive restaurant.

In 2022, A&W Restaurants, the iconic American restaurant franchise with over 500 locations throughout the U.S., revealed it was gearing up to expand throughout Kansas. The brand kicked off expansion plans with franchisee SJ Singh, who brought A&W to the city of Ellis.

“We believe Kansas has the capacity to house several more additional successful restaurants,” said John Palumbo, A&W’s senior director of franchise development. “We are excited about our new franchise partner and that we have been able to help him achieve his dream of opening his own A&W.”

Franchise Brands Headquartered in Kansas:

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