Franchise Industry Growth Report 2026

In 2026, the franchise industry doesn’t have a growth problem. However, it does have a focus problem: if you're an aspiring owner, the only things that matter are where the growth is concentrated and what's driving it.

According to the International Franchise Association's 2026 Franchising Economic Outlook (produced with FRANdata), US franchise establishments are projected to reach about 845,000 units this year, generating roughly $921.4 billion in output and supporting 8.9 million jobs. Those are strong numbers. Behind the headline, however, the story is much more specific. Our 2026 franchise industry report breaks it down below.

Franchise Industry Report 2026: The Winning Categories

Not every segment is moving at the same speed. Here's a quick look at where growth is concentrated:

Source: IFA/FRANdata, 2026 Franchising Economic Outlook

Child Services and Education

The top performer in the report, and the reason is straightforward: there aren't enough childcare and early education options to meet current demand, especially in fast-growing metros across the South and Southwest. That gap doesn't close quickly; entering a market where supply is the constraint is a different conversation than entering one where you're competing against a dozen established players for the same customer.

Home and Commercial Services

Only 2% of U.S. homes were built after 2020. Everything else is aging, and aging homes need work regardless of interest rates or consumer confidence. Roofs, HVAC systems, plumbing, restoration after water damage: none of it waits for a good economic climate. Many concepts in this space also skip the retail footprint entirely, which lowers both startup costs and ongoing overhead compared to food or storefront retail.

Health and Wellness

This category has become the third-largest in franchising, and the tailwinds are demographic rather than trend-driven. An aging population needs more health services, and that demand isn't going to plateau anytime soon. Younger consumers are also spending differently on health than previous generations, with a greater focus on prevention than on treatment. The growth isn't dramatic at 2.1%, but it's consistent.

Full-Service Restaurants

The IFA/FRANdata report flags something worth noting: for the first time since COVID, full-service restaurants are projected to outpace QSRs in output growth. The explanation is that higher-income consumers are spending more on sit-down dining experiences. This is worth keeping in mind if you're comparing food franchise options and assuming quick-service is automatically the growth play.

Retail Food, Products and Services

The 2.3% figure needs some context. Franchise retail isn't one thing: pet supplies and health products are performing differently than boutique clothing or gift concepts. The former are things people keep buying regardless of how they feel about the economy. The latter are easier to cut. Before drawing any conclusions about retail franchising, it's worth knowing which side of that line a specific concept is on.

Business Services

The B2B side of franchising holds up because small businesses reliably need outside help with things they can't or won't hire full-time staff to handle. The 1.6% growth rate reflects that consistency. What the number doesn't show is the variance within the category: some concepts are being undercut by AI tools doing the same work faster and cheaper, while others have the kind of local, relationship-based service model that doesn't translate to software. That distinction matters when you're evaluating a specific brand.

QSR

The scale here is worth appreciating before drawing any conclusions from the 0.4% growth figure: over 280,000 establishments, $318.6 billion in output, and more franchise jobs than any other segment. This isn't a category in trouble. What the slower growth reflects is that QSR brands are getting squeezed on margins from multiple directions at once: labor costs are up, consumer price sensitivity is up, and competition for the same customers is intense.

Anyone buying into this space right now should be doing a careful read of the specific brand's unit economics, not just the category's overall footprint.

Where the Growth is Happening

The IFA/FRANdata referenced in this franchise industry report is direct on geography: the Southeast and Southwest are leading franchise expansion in 2026, and the gap between those regions and the rest of the country is notable.

• The Southeast holds nearly 30% of all U.S. franchise establishments and is projected to grow output to $274.9 billion in 2026
• The Southwest is the fastest-growing region, with projected establishment growth of 2.5% and employment growth of 2.8%
• The top 10 growth states are Texas, Florida, Georgia, Arizona, North Carolina, Colorado, Michigan, Utah, Ohio, and Maryland

It’s worth noting that Michigan, Ohio, and Utah are new entries to the top 10 this year. It suggests the growth story is moving beyond the obvious Sun Belt markets into more affordable Midwest states where franchise saturation is lower and operating costs are more manageable.

The Data is Only the Starting Point

Category growth rates and regional trends discussed in the 2026 franchise industry report tell you where the market is moving. What they don't tell you is whether a specific concept makes sense in your city, at your investment level, with your background. Those are different questions, and they require a different kind of research.

The full 2026 Franchise Industry Growth Report goes deeper on every segment covered here: operating model breakdowns, geographic market analysis, economic conditions by category, and a practical framework for evaluating any franchise opportunity before you commit. If you're seriously considering ownership in 2026, it's worth the read.

Sources:

• International Franchise Association. “IFA Predicts Steady Growth for Franchising in 2026 Economic Outlook.” February 19, 2026.
• International Franchise Association and FRANdata. 2026 Franchising Economic Outlook. Accessed March 26, 2026.
• The Conference Board. Economic Forecast for the US Economy. Accessed March 27, 2026.
• U.S. Bureau of Labor Statistics. Job Openings and Labor Turnover: January 2026. March 13, 2026.
• U.S. Census Bureau. “Slow Growth Impacts Nation’s Largest Counties Hardest.” March 26, 2026.