What Nebraska’s Economic Outlook Means for Franchisors

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

By Luca Piacentini1851 Franchise Managing Editor

10:10AM • 07/18/23

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 Nebraska, 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: 36
2023 Economic Performance Ranking: 25

The State

Nebraska’s inflation-adjusted gross domestic product (GDP) declined 3.4% in the fourth quarter of last year, according to The Bureau of Economic Analysis (BEA), which is second only to South Dakota in terms of poor GDP performance. Nebraska’s real GDP growth rate for the year was only 1.1%, ranking 37th among states.

A shortage of labor, as well as inflation, has constrained business activity in the state of Nebraska. Labor shortages reached all-time highs in Nebraska in 2022, with very low unemployment (2.1%, according to the Bureau of Labor Statistics) and rising wages (the state’s personal income rose 4.3% in 2022). Inflationary pressures continued to put pressure on both households and businesses. Looking ahead, experts say a larger workforce will likely be crucial to sustaining improvements in business and economic activity in the state.

On the positive side, industries such as utilities, manufacturing, construction, and wholesale and retail trade made positive contributions to GDP in the fourth quarter of 2022.

Making Sense of the Data

What does this mean for Nebraska’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Nebraska has been outperformed by 24 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. Nebraska has seen a decrease of over 30,000 residents over the past 10 years, but has seen its state GDP increase by 46%.

The Economic Outlook tells another story about Nebraska’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, Nebraska appears at No. 33, with a top marginal personal income tax rate of 6.64% and a top marginal corporate income tax rate of 7.25%.

The report indicates that, generally speaking, states that spend and tax less experience higher growth rates than states that spend and tax more. Nebraska has seen a $0.98 decrease in taxes owned per $1,000 of personal income in recent years, landing at No. 18 for “Recently Legislated Tax Changes.” 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.

Wings and Rings*

Current units in state: 3
Growth capacity in state: N/A
Total jobs created at max growth capacity: 50-60 per unit
Total unit count: 85+
Investment range: $1,280,000 to $2,412,000

Wings & Rings, the Cincinnati-based elevated sports restaurant franchise, already has successful locations in Omaha and Lincoln and plans to further saturate the state of Nebraska by adding multiple locations.

"The demographics throughout Nebraska match our target customer; they have the right family structure in place; they have strong sports allegiances and are fervent sports fans,” said director of franchise development for Wings & Rings Dan Doulen. “The Great Plains market is a key for our continued growth.

Hawaiian Bros Island Grill

Current units in state: 0
Growth capacity in state: 5
Total jobs created at max growth capacity: 75+
Total unit count: 35
Investment range: $1,673,160 to $3,878,584

Hawaiian Bros, the Kansas City-based Hawaiian cuisine franchise, recently signed multi-unit franchise agreements with DKPM Investments Corp. and BraveHart Development LLC to open 15 stores throughout Nebraska and Iowa. The first location is expected to open in Gretna, Nebraska.

"The franchise agreements with DKPM Investments Corp and BraveHart Development LLC allow Hawaiian Bros to expand into select markets throughout the upper Midwest region of the country," said Grant Kreutzer, vice president of franchise development. "We are excited to bring positivity and the Aloha spirit to these new markets, aligning our unique culture with like-minded multi-unit operators to develop Hawaiian Bros in key markets."

Franchise Brands Headquartered in Nebraska

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