What Mississippi’s Economic Outlook Means for Franchisors

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 Mississippi, 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: 22
• 2023 Economic Performance Ranking: 37

The State

Research from University Research Center, Mississippi Institutions of Higher Learning shows that the real gross domestic product (GDP) for Mississippi increased by 0.2% in 2022. In the latest forecast, it is expected that the Mississippi economy will expand by 0.1% in 2023, which is an improvement of 0.5 percentage points compared to the previous quarter's forecast. This improvement is due to stronger net exports and inventory investment in the U.S. economy in the fourth quarter of 2022, which were better than expected. Looking ahead to 2024, the projection shows that the real GDP for Mississippi is expected to increase by 1.0%. This is an increase of 0.2 percentage points from the previous quarter's forecast.

Meanwhile, Mississippi’s population has been witnessing a decline. In 2022, the population was 2,940,057, a 0.32% decline from 2021. And in 2021, it was reported at 2,949,586, a 0.29% decline from 2020.

In May of this year, 29 counties in Mississippi posted unemployment rates less than or equal to the state’s rate of 3%. Rankin and Union Counties posted the lowest unemployment rate for the month of May at 2.1%, followed by Lafayette County at 2.2%. Jefferson County had the highest unemployment rate for May at 10.2%, followed by Issaquena County at 7.9%. 

Making Sense of the Data

What does this mean for Mississippi’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Mississippi has been outperformed by 36 other state economies. 

The performance index is based broadly on a state’s performance within state GDP, absolute domestic migration and non-farm payroll employment. Mississippi has seen an absolute domestic migration of -91,808, ranking it 36th in the country. 

The Economic Outlook tells another story about Mississippi’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, Mississippi appears at No. 22, with a top marginal personal income tax rate of 5% and a top marginal corporate income tax rate of 5%.

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. 

Southern Classic Chicken

• Current units in state: 0 
• Growth capacity in state: N/A
• Total jobs created at max growth capacity: N/A
• Total unit count: 18
• Investment range: $777,500 to $1,245,500 (assuming leased real property)

Southern Classic Chicken is looking for entrepreneurs and restaurant professionals to join the family-driven brand and is targeting areas around its home state of Louisiana, including Mississippi. And it's looking for the perfect locations to do so, says founding partner Alan Fanning. 

“We were looking at staying in areas with higher populations at first, but we’ve started looking at it a little differently,” he told 1851 Franchise. “We’re trying to find those niche spots where people aren’t looking, but the numbers are still there. We’re not going to be right beside some of the bigger players — we’ve never done that. But we have a really good following because of it.”

Slim Chickens

• Current units in state: 6
• 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

Slim Chickens, a leader in the “better chicken” segment of fast-casual restaurants, is continuing to grow in Mississippi. In May, it announced its latest opening in the state with multi-unit franchisee group Southern Partners. 

“We are looking forward to serving our cooked-to-order chicken tenders to more communities in Mississippi,” says Jackie Lobdell, vice president of franchise development at Slim Chickens. “Expanding our loyal following across the state is so exciting as we continue to see more residents in Mississippi embrace our southern hospitality and inviting atmosphere.” 

Franchise Brands Headquartered in Mississippi

• McAlister's Deli
• Newk’s Eatery