What Oklahoma's Economic Outlook Means for Franchisors

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

By Victoria CampisiStaff Writer

9:09AM • 07/04/23

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 Oklahoma, 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: 5
2023 Economic Performance Ranking: 32

The State

From the second to the third quarter of 2022, Oklahoma’s gross domestic product (GDP) increased at a rate of 5.5%, making it the third fastest-growing economy in the nation. The only states outpacing Oklahoma during that period were Alaska, which had the top GDP growth at 8.8% and Texas at 8.5%. In the first quarter of 2023, the GDP increased at an annual rate of 1.1%, according to the Bureau of Economic Analysis.

Oklahoma’s population continues to grow, reaching over 4 million residents for the first time, data released by the U.S. Census Bureau shows. Oklahoma's growth through July 2022 makes it the 28th-largest state in the nation, population wise, and one of just four states that have between 4 million and 5 million residents.

Meanwhile, Oklahoma added more than 45,000 employed people between February of 2022 and February of 2023 and continued to post a low percentage of unemployed people in its workforce, despite the country’s unemployment rate remaining at historically low levels.

Making Sense of the Data

What does this mean for Oklahoma’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Oklahoma has been outperformed by 31 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. Oklahoma has seen an Absolute Domestic Migration of 59,034, the 15th highest in the country.

The Economic Outlook tells another story about Oklahoma’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, Oklahoma appears at No. 5, with a top marginal personal income tax rate of 4.75% and a top marginal corporate income tax rate of 4%.

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.

HomeTeam Inspection Service

Current units in state: 1
Growth capacity in state: 3
Total jobs created at max growth capacity: 1-50 per location
Total unit count: 200
Investment range: $50,100 to $76,800

Home inspection concept HomeTeam Inspection Service identified Oklahoma as a prime market for franchise expansion after conducting market research based on trends, growth and growing areas.

“When identifying growth opportunities and target markets, our Franchise Development Team researches and reviews quite a bit of real estate data to identify trends, growth and new burgeoning areas,” said Adam Long, president of HomeTeam. “The markets identified by HomeTeam as 2023 Target Markets are a mixture of available territories and states which are currently growing faster than the rest of their counterparts across the country.”

Pool Scouts*

Current units in state: 0
Growth capacity in state: N/A
Total jobs created at max growth capacity: 5 per location
Total unit count: 65
Investment range: $87,490 to $109,625

Oklahoma is one of the states that Pool Scouts, a pool cleaning and maintenance franchise, is targeting for development as demand for pool services continues to grow. “The past couple of years have been incredibly robust from a pool construction standpoint across the country,” said Michael Wagner, president of Pool Scouts. “Lots of new pools have been built, and they need us to take care of them. So, we expect customer acquisition to continue to be robust, and we're very much looking forward to that.

Pollo Campero*

Current units in state: 3
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 350
Investment range: $1,287,250 to $2,491,500

At fast-casual chicken franchise Pollo Campero, Oklahoma is one of the states the brand is targeting where it already has successful locations.

“We are targeting markets where we already have franchise stores—Georgia, Minnesota, Oklahoma, North Carolina and South Carolina,” said Managing Director and COO LJ Rodas. “It doesn't mean that the growth needs to be with the same franchise group. We are also looking to grow with new franchise investors in those markets.”