What Wyoming's Economic Outlook Means for Franchisors

This summer, ALEC-Laffer published its annual Economic Competitiveness Rankings, which forecasts a state’s current standing within 15 state policy variables. The report features two different rankings: Economic Outlook — a forecast based on a state’s current standing in 15 state policy variables — and Economic Performance — a retrospective measure based on a state’s performance over a 10-year period from 2008 until 2018. For the state of Wyoming, these rankings reveal a lot about where the state economy is going and where there is opportunity for its economy to grow. 

• 2020 Outlook Ranking: 2
• 2008–2018 Performance Ranking: 46

The State

According to a report from Wyoming’s Economic Analysis Division, the state’s economy has been significantly affected by the COVID-19 pandemic. Unemployment rose to 9% and taxable sales fell by nearly 13% compared to this time last year.

The pandemic devastated the state’s industries across the board, but Wyoming’s energy industry is the one that has suffered the most. Counties dependent on coal, oil and natural gas have been the most impacted. Sublette County in particular saw taxable sales fall 61% compared to last year, and efforts to curb the spread of the virus have slowed fuel production worldwide.

Making Sense of the Data

What does this mean for Wyoming’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Wyoming has been outperformed by 45 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. Wyoming experienced a significant decrease in its gross domestic product rate of -8.0% as well as a -4.5% decrease in non-farm payroll employment. Over the last 10 years, the state fluctuated significantly in its domestic migration rate, and since 2018 it has lost a total of 5,623 residents.

The Economic Outlook tells another story about Wyoming’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, Wyoming appears at No. 2. ALEC-Laffer has ranked Wyoming favorably over the last 10 years, this year being the highest ranking yet.

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 business, it shouldn’t discourage them from investing in the franchise of their dreams if they're in a market with a slower growth rate. For Wyoming, this presents important opportunities for growth across several industries. 

Franchise Growth Plans

So what should franchisors do with this information? 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, the findings within the report should not be the deciding measure for franchisors, but they should play a role in the decision. 

Here are a few franchise brands that are planning to grow in Wyoming:

TWO MEN AND A TRUCK*

• Current units in state: 1
• Growth capacity in state: 1
• Total jobs created at max growth capacity: 23

“At TWO MEN AND A TRUCK, we look at many different pieces when defining territories, specifically using data on individual household incomes, population and ZIP codes,” said Cheryl Ackley, franchise development specialist for TWO MEN AND A TRUCK. “These reflect how the full-service moving experience will impact our communities in a positive way by moving our customers forward. Our Mini Market model, which allows franchisees to develop the brand in areas with smaller populations from 75,000–200,000, is ideal for Wyoming.”

Renovation Sells*

• Current units in state: 0
• Growth capacity in state: 5+
• Total jobs created at max growth capacity: 5, plus subcontractors.

“As we embark on franchising our opportunity, we have the benefit of a business model that fills a gap in the marketplace as well as ample territory availability across the country,” said CEO Michael Valente of the home renovation brand Renovation Sells. “2020 has been an interesting year, that's for sure, but it's proven how resilient our business model is. We're excited to expand and establish a footprint in metros that are experiencing a real estate surge as millennials are reaching home-buying age. We also look at communities that have a large amount of older, dated homes that can greatly benefit from simple renovations to increase their value in the marketplace.” 

Sylvan Learning*

• Current units in state: 1
• Growth capacity in state: 3
• Total jobs created at max growth capacity: 30

“We choose areas to focus our franchise development efforts based on demographic data we receive from our mapping system provider,” said Sylvan Learning CEO John McAuliffe. “ We look for areas with a high concentration of families with school-age children whose annual income is $50k or above. We also look at some other factors such as shopping centers, where tutoring centers can be located, schools and competition.”

Franchises Headquartered in Wyoming

• Taco John's International