As Georgia goes, so goes the nation. That’s a reference to not just college football in recent years, but also a business model known as franchising that has thrived in the southeastern United States and especially the Peach State. With former U.S. Sen. Kelly Loeffler tapped to lead the Small Business Administration (SBA), franchising is poised for even more growth in the years ahead, especially with one key policy change.
Franchising refers to a business model in which one party (the franchisor) allows another party (the franchisee) the rights to operate under its established brand and business system. In exchange for access to the brand name, logo and organizational structure, the franchisee typically pays an initial fee and ongoing royalties to the franchisor — owning and operating their own small business.
Credit: Handout
Credit: Handout
Take a drive down any street in Georgia, and you’re likely to encounter a franchise business. In fact, more brands are headquartered in Atlanta than any other city in the country, leading to its distinction as the franchising capital of the United States.
A few of the iconic examples that began and remain based here include household names like Chick-Fil-A and Sonic and newer brands such as Floor Coverings International and Any Lab Test Now. Dozens of elected officials have visited these brands and their franchise locations through IFA’s “Open For Opportunity” road show, including Atlanta Mayor Andre Dickens and six of Georgia’s congressional delegation.
Though franchising is often associated with food, more than 6 in 10 franchises are in another industry, including the Atlanta-based IHG Hotels that provides travelers coast-to-coast reliable and affordable lodging. The franchise model is often mislabeled with big business and corporate behemoths, but more than 8 in 10 most franchise owners (81.6%) own and operate one location, according to FRANdata.
Franchising allows entrepreneurs to go into business for themselves but not by themselves. It provides a new business owner with a proven system and infrastructure with the autonomy and independence to work as his or her own boss.
It’s not only the best of both worlds but also a proven pathway to entrepreneurship for underrepresented communities. More than 1 in 4 (approximately 26%) franchises are owned by people of color, compared with 17% of independent businesses. Black-owned franchises earn 2.2 times more than Black-owned independent businesses on average.
Franchising weathered the pandemic-induced storm better than its counterparts or economy writ large, in no small part because of the work of the first Trump administration’s focus on creating the Paycheck Protection Program the SBA administered. In 2023, the sector grew at 4%, nearly double the 2% of the broader economy. In 2024, Georgia ranked third in the nation for fastest franchise growth — and is predicted to be the fastest growing state for franchises in 2025. Georgia is home to an estimated 32,000 local franchise establishments employing more than 340,670 Georgians and generating $34.6 billion in economic output.
These are all encouraging signs that give opportunities for Loeffler to build on should she be confirmed as the next SBA administrator. The agency she has been tapped to lead plays a major role for would-be franchisees accessing early financial capital. In fact, an estimated 20% of SBA loans by dollar volume go to franchises.
In 2023, the SBA ended the franchise directory, which was a centralized and verified location for lenders to quickly and accurately check whether a franchise was eligible for SBA financing. Without it, lenders have to do more legwork to determine if a franchise qualifies for a loan, which has led to challenges for many brands finding financing for their new franchise owners.
Though the private sector normally appreciates attempts to streamline or eliminate government programs, the franchise directory was a critical tool. Its elimination caused certain lenders to pull back from franchise lending, denying would-be entrepreneurs access to a critical source of startup capital.
To achieve its economic vision, the Trump administration must create a climate where small businesses can grow and thrive. Ensuring SBA’s lending programs meet the needs of franchise business owners would be a positive step in that direction, and reinstituting the franchise directory would be a sensible and bipartisan place to start.
Given franchising’s success in Georgia, Kelly Loeffler has seen the power of the model in her own state. Should she take over the SBA, she can help local franchises reach even newer heights in the year ahead, providing more opportunity from entrepreneurs of all walks of life.
Matt Haller is the president and chief executive of the International Franchise Association.
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