The "states" of franchising: IFA Educational Foundation study finds that while franchising is flourishing in every state, the industry's economic footprint is more important in some states than others.

The March and April issues of Franchising World reported on some highlights of the report released by the IFA Educational Foundation that provides estimates on the growth of the franchising sector from 2001 to 2005. In 2005, the nation's nearly one million franchised businesses accounted for $2.3 trillion in U.S. private-sector output--11.4 percent of the economy--and provided jobs for 21 million Americans, or more than 15 percent of all private-sector jobs. The full report, The Economic Impact of Franchised Businesses, Volume 2, as well as the magazine's two articles, can be found on the IFA Web site at Franchise.org and on a dedicated site, www.buildingopportunity.com.

This article reviews the geography of franchising. While franchising is flourishing in every state, the industry's economic footprint is bigger and more important in some states than others. Franchising provides employment for at least 10 percent of a state's private-sector workforce in every state except New York. The average per state is 15.3 percent.

One of the best ways to visualize the economic footprint of franchising is to view the U.S. map on which certain states have been shaded in blue, green or blue/green.

In terms of sheer size, the number of jobs and the size of the payrolls were greatest in California, Texas, Illinois, and Florida, indicated in green.

In terms of the size of the statewide economy, franchising had the greatest impact on jobs and payrolls in Nevada, New Mexico, Arizona, and Mississippi (the blue states).

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In terms of the largest share of state payrolls, franchising played the most significant role in Nevada, Arizona, and Florida, indicated in the blue/green states.

To better understand the importance of the economic footprint of franchising, let's take a closer look at three of these states: California, Nevada and Florida.

John Reynolds is president of the IFA Educational Foundation. He can be reached at 202-662-0764 or jreynolds@franchise.org. California--with one of the largest and fastest-growing economies in the United States and some would say in the world--has a large concentration of franchisors, franchisees and suppliers to the franchising industry. California Snapshot (2005) Franchise Establishments 97,191 Franchising Jobs (direct) 1,162,888 Franchising Payroll (direct) $33,949.4 (millions) Franchising Output (direct) $105,731.6 (millions) Franchising Total Jobs (indirect) 2,290,058 (14.3%) Franchising Total Payroll (indirect) $83,236.6 (millions) (11.8%) Franchising Total Output (indirect) $285,789.3 (millions) (11.2%) Nevada--with one of the largest tourism and hospitality-focused economies in the United States--gets "two stars" for a significant franchising footprint. Franchised businesses provide a considerable share of the state's overall economy and provided one of the largest shares of state payrolls. Nevada Snapshot (2005) Franchise Establishments 8,184 Franchising Jobs (direct) 141,002 Franchising Payroll (direct) $4,077.2 (millions) Franchising Output (direct) $13,088.4 (millions) Franchising Total Jobs (indirect) 267,971 (21.4%) Franchising Total Payroll (indirect) $9,373.7 (millions) (20.5%) Franchising Total Output (indirect) $33,790.9 (millions) (22.9%) Florida--with a big economy focused on tourism and retirement living--also gets "two stars" for a major franchising footprint. In terms of sheer size, jobs and payrolls were greatest in Florida and franchising also accounted for one of the largest shares of state payrolls. Florida Snapshot (2005) Franchise Establishments 61,649 Franchising Jobs (direct) 728,200 Franchising Payroll (direct) $18,091.9 (millions) Franchising Output (direct) $56,159.3 (millions) Franchising Total Jobs (indirect) 1,486,306 (17.3%) Franchising Total Payroll (indirect) $45,992.6 (millions) (15.7%) Franchising Total Output (indirect) $160,442.2 (millions) (17%)