North Carolina is poised to become a national leader in franchise expansion in 2025, according to the International Franchise Association's (IFA) latest Franchising Economic Outlook report. The state is projected to host 32,395 franchise businesses by the end of the year, marking a 4.5% increase from 2024.
This growth outpaces the national average, with the U.S. franchising sector expected to expand by 2.5%, adding over 20,000 units to reach a total of 851,000 establishments. Employment in the sector is also set to rise by approximately 210,000 jobs, bringing the total to over 9 million nationwide.
Several factors contribute to North Carolina's favorable franchising environment. The state's business-friendly policies, lower cost of living, and strategic location in the Southeast make it an attractive destination for franchise investment. Additionally, the state's GDP is projected to grow by 2.3% in 2025, driven by sectors such as information technology and construction.
The personal services and retail food sectors are expected to be the fastest-growing industries within franchising in 2025, increasing by 4.3% and 3.5%, respectively. This trend aligns with North Carolina's economic strengths and consumer demand patterns.
However, some experts suggest that eliminating the state's franchise tax could further stimulate growth. Critics argue that the tax, which is levied on a business's net worth, discourages investment and expansion, particularly for small businesses and startups.
Despite this, North Carolina's franchise sector is thriving, with companies like Whataburger planning to open multiple locations across the state in 2025. As the state continues to attract franchise investment, it solidifies its position as a top destination for business growth in the coming year.