What Utah’s Economic Outlook Means for Franchisors

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

By Victoria CampisiStaff Writer

Updated 10:10AM • 07/03/23

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 Utah, 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: 1
2023 Economic Performance Ranking: 2

The State

Utah has taken the No. 1 spot in the annual index for 16 years. In 2022, Utah's gross domestic product (GDP) reached $185.2 billion, representing an increase of 3.7% from 2021. Utah's GDP has also grown at an annualized rate of 1.3% from 2017 to 2022.

In 2022, the state of Utah had a population of 3,399,940, having grown an annualized 1.8% since 2017, which ranks it second out of all 50 U.S. states by growth rate. Meanwhile, businesses in Utah employed a total of 1,930,947 people in 2022, with an average annual employment growth over the past five years of 2.5%. The top three sectors by total employment in the state are manufacturing; real estate, rental and leasing; and professional, scientific and technical services. Unemployment rate across the state in 2022 was 2.2%.

Making Sense of the Data

What does this mean for Utah’s economy? To start with the Economic Performance report, the index shows that within the past 10 years, Utah has been outperformed by no 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. Utah has seen an absolute domestic migration of 127,932, ranking it 13th in the country.

The Economic Outlook tells another story about Utah’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, Utah appears at No. 2, with a top marginal personal income tax rate of 4.85% and a top marginal corporate income tax rate of 4.85%.

The report indicates that, generally speaking, states that spend and tax less experience higher growth rates than states that spend and tax more. 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.

Pollo Campero*

Current units in state: 0
Growth capacity in state: 10
Total jobs created at max growth capacity: N/A
Total unit count: 350
Investment range: $1,287,250 to $2,491,500

Fast-casual chicken franchise Pollo Campero is looking to Utah as a new market for franchise development due to a mix of demographics and whitespace in the market.

“Utah is one of the states that has shown strong economic growth over the last several years,” said director of franchise development Blas Escarcega. “We’ve had interest over the years, but we’ve never really focused our efforts until now.”

Escarcega noted that Utah not only features a growing population of Central Americans — legacy customers who may already know the Pollo Campero brand — but also a large number of Americans who may have experienced the brand while on missionary work in the past.

Scoop Soldiers

Current units in state: 1
Growth capacity in state: N/A
Total jobs created at max growth capacity: 2-5 per location
Total unit count: 36
Investment range: $68,300 to $118,300

As part of their growth plan to be coast to coast in 2023, pet waste removal franchise Scoop Soldiers is planning to add new franchises in Utah. And with just one location in the state thus far, Utah is ripe for development as the demand for pet-related services increases.

“We are poised for growth,” said Scoop Soldiers CEO and co-founder E.J. McCoy. “We’ve got the foundation laid, and we’re confident in our know-how of taking our system and process and plugging it in anywhere and getting those results.”

Pet Wants

Current units in state: 1
Growth capacity in state: N/A
Total jobs created at max growth capacity: N/A
Total unit count: 140+
Investment range: $131,350 to $202,500

At the end of 2022, Pet Wants, the only national provider of pet food freshly delivered to customers, revealed it was targeting Utah for growth in 2023.

“We will continue to target markets where we need additional distribution or new markets where we would like to introduce our products or services,” said DeNita Carani, brand president.