Franchises were slapped hard by the pandemic; it is expected that franchises will have only a modest 2023.
The industry recovered most of its losses from the pandemic in 2021, but growth slowed in 2022, as franchises faced several headwinds, such as inflation and labor shortages.
About 15,000 of new franchises are expected to open this year, a solid annual increase of 2%. The output of the franchise industry will slow from last year, but still grow by 4%, while employment will increase by 3%.
Personal-service franchises are expected to outpace the rest of the industry. Weaker consumer spending on discretionary items and housing-market challenges means that franchises in the full-service restaurant, lodging and real estate sectors will see slower growth. By contrast, fitness centers, beauty salons and entertainment and recreation facilities are expected to continue multiplying at a rapid pace.