What Wyoming’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 Wyoming, 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: 6
• 2023 Economic Performance Ranking: 43

The State

Wyoming’s economy has seen a slight improvement following the lifting of COVID-19-related lockdowns. However, the state doesn’t appear to be in the clear yet. According to an Economic Summary released by Wyoming’s Department of Administration and Information, the state’s economy grew by roughly 6,500, or 2.3% more payroll jobs in the third quarter of 2022 compared to the same period in 2021. But that report also found while Wyoming’s economy continues to rebound, it’s doing so at a slower rate than the U.S. average.  

“The speed of recovery was somewhat slower than the U.S. average, and that’s because Wyoming has been in an extraction-driven economy,” said Wenlin Liu, chief economist with the Wyoming Division of Economic Analysis in an interview with Wyoming Public Media.

In regard to employment figures, the U.S. Bureau of Labor Statistics reports that Wyoming had 23,000 job openings in April 2023, compared to 21,000 openings in March. And as of April 2023, the ratio of unemployed persons per job opening in Wyoming was 0.5, lower than the national average of 0.6.

“We do expect the U.S. economy and Wyoming’s economy probably is going to be slower than 2022 in 2023 for rate of growth,” noted Liu.

Further, a report focused on Wyoming’s growth reveals that the state’s population has lagged behind its neighboring states for “virtually its entire history, which largely results from the comparatively limited agricultural potential and broader livability of its land.” 

That report also found that most of Wyoming’s population today is highly geographically dispersed throughout the state and that half of the population lives in towns of fewer than 10,000 people.

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 42 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 has seen a decrease in absolute domestic migration by about 9,670, placing the state at 24th in the country. 

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. 6, with a top marginal personal income tax rate of 0% and a top marginal corporate income tax rate of 0%.

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.

Sylvan Learning*

• Current units in state: 1
• Growth capacity in state: 3
• Total jobs created at max growth capacity: 10-15
• Total unit count: 710+
• Investment range: $85,525 to $186,930

Sylvan Learning is a leading provider of supplemental and enrichment education for students in grades K-12. According to Sylvan Learning CEO John McAuliffe, the brand is seeking to expand its footprint in states and locations with a high number of families who could benefit from such a program.

“We choose areas to focus our franchise development efforts based on demographic data we receive from our mapping system provider,” said 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.”

Renovation Sells*

•  Current units in state: 0
• Growth capacity in state: 5+
• Total jobs created at max growth capacity: 5, plus subcontractors
• Total unit count: 35
• Investment range: $78,208 to $101,142

Renovation Sells, the presale home renovation franchise, is looking to expand its operations in regions similar to Wyoming, and that have an abundance of homes and properties that are in need of renovation and repairs.

“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. “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.”

Christmas Decor*

• Current units in state: 3
• Growth capacity in state: N/A
• Total jobs created at max growth capacity: 15
• Total unit count: 300
• Investment range: $19,550 to $62,250

Christmas Decor is a leading decorating brand that spans across the United States and Canada. The brand currently has operations in over 300 communities throughout North America and is looking to fill out its existing markets. As such, Christmas Decor is looking to expand in states such as Wyoming, Oregon, North Carolina and Kansas.

“Over the last decade, we’ve grown so fast that we had to slow down to ensure our infrastructure caught up,” said brand president Brandon Stephens. “We didn’t want to outgrow our ability to support franchisees. Now, after experiencing some of our strongest growth yet over the past two years, we are eager to start adding new people into the system and helping entrepreneurs achieve their dream of business ownership.”

Franchise Brands Headquartered in Wyoming:

• Taco John’s International