What New Jersey’s Economic Outlook Means for Franchisors

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

By Jeff DwyerStaff Writer

9:09AM • 07/24/23

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 North Dakota, 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: 47
2023 Economic Performance Ranking: 38

The State

There’s good news for New Jersey’s economy, as economists say the Garden State is, so far, 2023’s most-improved state for business. The state economy grew by 2.6% since last year, which was the 13th best in the country. And while this marks good news for the state, New Jersey isn’t in the clear as of yet. According to state treasury officials, New Jersey could be headed for a “mild” recession before the end of the year.

“I don’t think we’ve seen anything to indicate that, if there was a recession, it would be anything more than a short-term or mild recession,” said state treasurer Elizabeth Maher Muoio.

In terms of population, New Jersey is seeing more residents move out rather than coming in. As Northjersey.com notes, the state’s population dropped between 2021 and 2022 by more than 6,250 residents. As of July 2023, there are roughly 9.2 million residents living in New Jersey.

Making Sense of the Data

What does this mean for New Jersey’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, New Jersey has been outperformed by 37 other state economies.

The performance index is based broadly on a state’s performance within state gross domestic product (GDP), absolute domestic migration and non-farm payroll employment. New Jersey has seen a decline in absolute domestic migration of about 520K, placing the state at 47th in the country.

The Economic Outlook tells another story about New Jersey’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 Jersey appears at No. 47, with a top marginal personal income tax rate of 11.75% and a top marginal corporate income tax rate of 11.50%.

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.

Pool Scouts*

Current units in state: 0
Growth capacity in state: 20
Total jobs created at max growth capacity: 50
Total unit count: 110 across 18 states
Investment range: $70,950 to $88,350

Pool Scouts, the pool cleaning franchise based out of Virginia Beach, is actively looking to expand into the Northeast, as the demand for pool services grows across the country.

“There is a great tailwind of demand for pool services in the Northeast, and we are prepared to fill that need,” said Michael Wagner, brand president. “There is a certain kind of untapped potential in New York, New Jersey, Massachusetts and Pennsylvania for Pool Scouts.”

Paris Baguette*

Current units in state: 17
Growth capacity in state: N/A
Total jobs created at max growth capacity: 15 to 20 per location
Total unit count: 4,000+ in the U.S. and across the globe
Investment range: $652,565 to $1,750,900

Paris Baguette, the bakery café franchise with over 4,000 open units in the U.S. and across the globe, has seen explosive growth in the last few years and shows no sign of slowing. The brand, which already has a presence in New Jersey, is seeking to grow in its existing markets in order to reach as many customers as possible.

“We are thrilled to announce additional expansion within New Jersey,” 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. Our ability to stay true to our bakery café roots while embracing aggressive expansion has garnered attention, and that only serves to drive us forward.”

Joshua Tree Experts

Current units in state: 0
Growth capacity in state: 5 to 10
Total jobs created at max growth capacity: 50
Total unit count: 2
Investment range: $196,760 to $303,091

As a newer franchise system, Joshua Tree Experts has started offering franchise opportunities throughout the U.S., and is targeting the Northeast for expansion, including New Jersey.

“As we work toward our goal of adding 12 Joshua Tree Experts franchises to our system, we’re targeting markets in Pennsylvania, New Jersey, Ohio, Texas, Florida, Georgia and Massachusetts,” explained Joshua Malik, founder and CEO. “After reaching 8,000 customers in 2022, we’re ready to spread our branches to grow in the Northeast and beyond.”

Franchise Brands Headquartered in New Jersey:

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

What New Jersey’s Economic Outlook Means for Franchisors

Pool Scouts*

Paris Baguette*

Joshua Tree Experts

MORE STORIES LIKE THIS