What New Hampshire’s Economic Outlook Means for Franchisors

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

By Victoria CampisiStaff Writer

10:10AM • 07/11/23

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 New Hampshire, 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: 19
2023 Economic Performance Ranking: 17

The State

New Hampshire experienced below-average real gross domestic product (GDP) growth in the first half of 2022, but has recently grown at or slightly above the national rate of growth. In 2023, New Hampshire is expected to have a growth rate of 1.2%.

The state also saw positive employment rates over the past three months, with a 0.3% increase. However, the state has experienced notable declines in its labor force due to a drop in the labor force participation rate. The unemployment rate in New Hampshire has declined significantly since the beginning of the year, reaching 1.9%. In terms of industry-level employment, New Hampshire has seen a decline in manufacturing job growth over the past few months. Additionally, certain sectors, such as health care and leisure/hospitality, have experienced job losses in the state's service industry.

Meanwhile, the population of New Hampshire increased by 7,700 people or 0.55%, reaching a total of 1,395,000 between July 2021 and July 2022. This population gain was the second largest in the New England region. Notably, the increase was entirely attributed to migration, with 10,200 more individuals moving into New Hampshire than leaving during the same period. Of this migration gain, almost 62% can be attributed to people moving from other states.

Making Sense of the Data

What does this mean for New Hampshire’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, New Hampshire has been outperformed by 16 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. New Hampshire has seen an absolute domestic migration of 24,040, ranking it 20th in the country.

The Economic Outlook tells another story about New Hampshire’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, New Hampshire appears at No. 19, with a top marginal personal income tax rate of 0% and a top marginal corporate income tax rate of 7.5%.

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.

TWO MEN AND A TRUCK*

Current units in state: 1
Growth capacity in state: N/A
Total jobs created at max growth capacity: 1-22 per location
Total unit count: 400+
Investment range: $105,500 to $435,600

TWO MEN AND A TRUCK®, the national, full-service franchised moving company, opened its first-ever location in the state of New Hampshire in 2022. As more residents flock to the area, the demand for TWO MEN AND A TRUCK’s moving services are only set to grow.

“We were already getting a lot of calls from New Hampshire residents because we are close to the border in Massachusetts, so we had already done out-of-state moves in the area,” said franchisee Joe Turbeville. “We felt like if we put the right team members in place, we knew the business would thrive in New Hampshire. Plus, we already have a shared infrastructure and hub on the East Coast, and we saw first-hand the growing demand for moving services. We knew we could fill that void.”

Junk Junk Baby!

Current units in state: 0
Growth capacity in state: 2-3
Total jobs created at max growth capacity: N/A
Total unit count: 1
Investment range: $84,775 to $131,500

Emerging junk hauling franchise Junk Junk Baby is looking at three states around its Massachusetts headquarters to open up new franchise territories: Connecticut, New York and New Hampshire. By creating a network of close, intrastate franchise locations, Junk Junk Baby! can create powerful brand awareness in the Northeast and focus on really supporting its first few franchisees. Then look to expand in locales further across the nation.

“We have incredible opportunities for growth in markets across the country, but we are starting with the Northeast because those are the markets we know best and where we can offer the most immediate support,” said CEO Eric Myers. “Our strategy is to grow out in concentric circles, to ensure every new franchise owner is never too far from a territory that is already up and running and finding success.”

**Fresh Coat* Painters**

Current units in state: 0
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 170
Investment range: $53,945-$76,845

Fresh Coat Painters, the 170-unit residential and commercial painting franchise under the Strategic Franchising Systems umbrella, has identified several markets primed for franchise growth, including New Hampshire. The brand is targeting New Hampshire as it plans to hit 200 units by the end of the year.