Every year, Laffer-ALEC publishes its State Economic Competitiveness Index rankings, which lists all 50 states’ economic standings in two categories: performance and future outlook.
And every year, Idaho has ranked high on both its performance and forecasted standings, with 2020’s index being one of Idaho’s best years: It ranked 11th in economic performance and third in the nation for economic growth outlook.
With such high potential for a state known mainly for its agriculture, Idaho is also becoming known for its friendly business environment in which businesses, franchises and individuals can get more bang for their buck.
“From a data standpoint, the value of the dollar is much stronger in Idaho than other states,” said Nick Powills, publisher of 1851 Franchise magazine and chief brand strategist and owner of No Limit Agency. “And if the value of the dollar to a franchisee immediately goes down to … 90 cents after royalty fees because they have to pay all those fees for being part of a franchising brand, that 90 cents has significantly more value in Idaho because they can buy a better house and the taxes aren’t as bad.”
He continued, “And … if you take the whole value of how money and wealth is built, then those factors mean … that the same dollar a franchisee makes in Idaho that they make in Illinois is going to carry a lot more value in Idaho than Illinois. And I think that’s a fascinating data point.”
This current outlook — along with Idaho’s promising potential for new businesses — has attracted the attentions of several franchises across the nation who are eyeing the Gem State for developments in the near future.
One of these businesses is family-oriented sports pub Beef ‘O’ Brady’s, which is scouting for franchisees around the Boise area and hopes to bring about 20 locations to the state over a three- to five-year timeline.
While nothing has been confirmed just yet, said Vice President of Franchise Development at Beef ‘O’ Brady’s Jamie Cecil, this expansion could mean an increase of approximately 700 jobs to Idaho, and it's a goal the company is currently striving to meet.
The nearly 150-unit pub franchise hopes to bring not just its award-winning wings and a relaxed environment to the Boise area, but a very community-centered approach as well.
“I think the brand obviously fits well with the state,” Cecil said. “We’re obviously very family-oriented. When we come to a town, our franchisees get very involved in the community. We always like to say our franchisees become … the mayor of their community because they get really involved. We’re not just bringing restaurants to town. We are bringing a family spot where everybody can come and gather and celebrate a win after a good high school or college victory.”
Another business franchise that is eyeing Idaho for future development is also a brand that was ranked fifth in Franchise Times’s Fast & Serious List for 2020.
Beauty brand Amazing Lash Studio, which is the largest eyelash extension franchise with 256 current locations and 15 upcoming locations according to its website, is setting its sights on southwestern Idaho as home for about five new locations and 75 or more new jobs.
And despite 2020 being a ruthless force that has caused economic distress across the nation, there has been a silver lining for Amazing Lash Studio, says Lauren Wanamaker, senior director of development.
“Now, more than ever, women are focusing on the impact that their eyes have on their overall appearance,” Wanamaker said. “While eyelash extensions have always created a big impact on one’s appearance, it is now all that is noticed, due to mask wearing. Women are spending less and less money on face makeup and lipstick and are focusing on what shows: the eyes.”
This silver lining in a time when many businesses are running into challenges will help the franchise as it navigates through its initial phase of searching for the right franchisee who will help grow its brand in Idaho's market.
Wanamaker explained that on average it takes seven to nine months to open a studio nationally, but because Idaho is business friendly and has great real estate options, that time frame can potentially be shorter. This quick time frame is one of the appeals that attracts franchises to the state.
“In franchising, there are states that have more strict regulations than others, and Idaho is what is called a non-registration state so it’s easier for a franchisor to do business there,” said Steve Beagelman, president and CEO of SMB Franchise Advisors. “So from the franchisor standpoint, it’s good; for the franchisee, there’s less red tape and they can get their business open faster. For example, there’s a big difference for a Planet Fitness who wants to open and can open in eight or 10 months versus one that can open in two years because of all the regulations they have to go through. Because you may also be paying rent during that period of time, and that’s a lot of money.”
Beagelman, who has worked in the franchising world for more than 30 years and whose consulting company has worked with more than 300 different brands in the country, said that states like Idaho are attractive because of these less restrictive regulations.
“I was talking to one of our clients who is in Washington state and … he was saying, ‘Hey, Steve, there’s so much regulation here in Washington that the next place I’m going is in Idaho,’” Beagelman said. “It’s very business friendly and I think that’s important, and I think that’s the reason that you see franchises opening in Idaho and looking at it as a great growth area for their brand.”
While some franchises are just starting to sow their franchisee seeds into Idaho’s fertile economic-friendly ground, others have already created a footprint in the state. Such is the case with Workout Anytime, a 24/7 fitness franchise that already has one location in Boise and hopes to bring five or more clubs to Idaho.
“Idaho is such a great state,” said Terri Harof, director of franchise at Workout Anytime. “That particular location (in Boise) has been really embraced by the community, so that franchisee is looking to open additional locations throughout that market.”
Harof explained that Workout Anytime’s economic growth strategy is to seek out developing markets that are underserved, and that currently Meridian and Nampa, along with Boise, are several cities they are circling as potential new locations for their franchises. Another location Harof says they’ve been considering is Idaho Falls.
“When we go into different markets, we actually look for markets that are underserved … that don’t have a gym on every corner,” she said. “Because there are so many underserved developing markets around some of your most densely populated cities. That’s kind of how we look at it.”
This increase of five or more new locations could bring about 35 new jobs to the areas on the low end, and 50 new jobs on the high end. It would just depend on the amount of personal trainers that each club is able to hire, Harof said.
Similar to how the pandemic has created a silver lining for Amazing Lash Studio’s brand, Harof said Workout Anytime has experienced some slow-down due to shutdowns, but that in the long run the pandemic has not stopped their overall growth.
She explained they’ve had growth in several states, ranging from opening clubs to bringing in potential new franchisees from states like Arkansas, Georgia, Illinois and South Carolina.
“We are growing even with the pandemic because everyone knows that a) this is definitely not here forever, especially knowing there are vaccines that have just been approved and b) … I think people know now more than ever the importance of taking care of yourself, being healthy, exercising and eating well,” she said.
She continued, “Another thing we’re seeing is I think there are people out there that are like, ‘You know what? Life is too short and I want to do something I’m really passionate about.’ So we’ve had a tremendous amount of interest from all across the country, so I would say within the next 12 months we absolutely will see additional locations in Idaho.”
As for people considering opening up their own small businesses as opposed to a franchise, Beagelman explained that the COVID-19 lockdowns are a good example that show the support a franchise can provide for their franchisees, especially when confronted with large challenges.
“There’s no better time than what we went through over the last nine months in the pandemic than understanding what it’s like to be a franchisee in a system versus on your own as a small business owner,” he said.
Beagelman explained that one of his clients who was a franchisee spoke to his franchisor daily for two months, and that together they discussed how to navigate through the difficulties of staying afloat during a pandemic.
“But if you were on your own, I can’t imagine being out there on an island in March or April of this year and having nobody to talk to or know if what you’re doing is good, bad or what you should be doing,” he said. “It’s hard in general as a small business owner, but during a pandemic it was really hard. And franchising really is a great business for people to be, like the old cliché, in business for yourself but not by yourself.”
And for those who may have a passion in a certain area that a franchise specializes in but don’t quite know how the technical business side of things work, a franchise can be a good place to dip your toes in.
“Planet Fitness has figured out the system in the process,” Beagelman said. “(You) may love fitness, but (you) don’t know how to run a gym. That’s where franchising comes in.”
For those who are interested in franchising, Powills suggests three things: Don’t strain yourself financially, align your passions, and watch your business scale.
“(In) franchising, just like anything else, nothing is get rich quick,” Powills explained. “It’s going to take time. You’re going to need operating capital. You need to make it so you’re not stressed out about all the costs that go into operating a business. And align your passions … because if you’re not passionate about what you’re selling, it’s really hard to get the energy to put into it.”
As for scale, he says that a potential franchisee needs to understand that just opening up one location will not typically have life-changing wealth projections. To get such a snowball of wealth rolling, they would need to scale it by opening more than one successful location.
“There are brands where the annual growth revenue is $500,000 and the net profit is 10 percent,” he said. “And those brands could require 24/7 focus, so you walk away with $50,000 at the end of the year after investing your entire life savings into something. Is that really what you want to be doing? No, but if you scaled it and you have five locations and are now kicking off $250,000 or additionally more because net goes up as you’re able to leverage your resources, now all of a sudden that transitions into life-changing money … so align your finances, have passion for the category, and (watch) scalability.”
As for the future and Laffer-ALEC’s 2020 rankings placing Idaho as the third state in the nation for economic outlook, this success and potential is something Beagelman had noticed even before the pandemic hit.
“Companies are going to move from these highly regulated areas because a) they were dealing with COVID (shutdowns) and b) they were dealing with (restrictions) before COVID,” Beagelman said. “I think Idaho is going to do very, very well after all of this is said and done from a small business standpoint in the franchising industry.”