When considering franchising your business or buying into a franchise system, one of the decision elements to make is where your business will be located. There are pros and cons of being located in certain states throughout the U.S., take each into account before starting a business in a certain area.
When franchising your business, you will want to file a new entity that will hold the operations and business activities of your new business, this can be located in a state outside of where your affiliate organization is based. When buying into a franchise system, you have the choice in many cases to locate the business in whichever state is most convenient for you and the where the franchisor permits you to locate.
That being said, CheifExecutive.net recently released their best and worst states to do business in for 2011. Not surprisingly, Illinois, New York and California were at the bottom of the list. Also not surprisingly, states that are increasing benefits to businesses for opening up shop and decreasing burdensome regulations are at the top of the list including Texas, Georgia and Florida. This doesn't mean that a new or existing business can't be successful in the lesser ranked states, but it is something that should be taken into account.
This survey was based on over 500 CEO's providing their input into the situation as to whether a state was a good place to do business in being based on tax guidelines, employment laws and business regulations.
| 2011 RANK |
STATE | 2010 RANK |
CHANGE |
| 1 | Texas | 1 | 0 |
| 2 | North Carolina | 2 | 0 |
| 3 | Florida | 6 | 3 |
| 4 | Tennessee | 3 | -1 |
| 5 | Georgia | 7 | 2 |
| 6 | Indiana | 16 | 10 |
| 7 | Virginia | 4 | -3 |
| 8 | South Carolina | 10 | 2 |
| 9 | Utah | 9 | 0 |
| 10 | Nevada | 5 | -5 |
| 11 | Oklahoma | 19 | 8 |
| 12 | Colorado | 8 | -4 |
| 13 | Arizona | 11 | -2 |
| 14 | Wyoming | 15 | 1 |
| 15 | South Dakota | 14 | -1 |
| 16 | Delaware | 12 | -4 |
| 17 | Kentucky | 23 | 6 |
| 18 | New Hampshire | 18 | 0 |
| 19 | Idaho | 13 | -6 |
| 20 | Nebraska | 22 | 2 |
| 21 | North Dakota | 24 | 3 |
| 22 | Iowa | 17 | -5 |
| 23 | Missouri | 26 | 3 |
| 24 | Wisconsin | 41 | 17 |
| 25 | Kansas | 25 | 0 |
| 26 | Alabama | 20 | -6 |
| 27 | Louisiana | 40 | 13 |
| 28 | Montana | 28 | 0 |
| 29 | Minnesota | 31 | 2 |
| 30 | Arkansas | 27 | -3 |
| 31 | Alaska | 21 | -10 |
| 32 | New Mexico | 29 | -3 |
| 33 | Oregon | 38 | 5 |
| 34 | Washington | 30 | -4 |
| 35 | Rhode Island | 39 | 4 |
| 36 | Maine | 37 | 1 |
| 37 | Maryland | 33 | -4 |
| 38 | Mississippi | 35 | -3 |
| 39 | Pennsylvania | 32 | -7 |
| 40 | Vermont | 36 | -4 |
| 41 | Ohio | 43 | 2 |
| 42 | West Virginia | 34 | -8 |
| 43 | Hawaii | 42 | -1 |
| 44 | Connecticut | 44 | 0 |
| 45 | Massachusetts | 46 | 1 |
| 46 | Michigan | 48 | 2 |
| 47 | New Jersey | 47 | 0 |
| 48 | Illinois | 45 | -3 |
| 49 | New York | 49 | 0 |
| 50 | California | 50 | 0 |
Of course, these rankings should be taken with a grain of salt. There are always unique circumstances that cannot be summarized into a unviersal ranking system. It is your job as the leader of your company to do the research and make the best decision from a strategic standpoint as to where your franchise location or franchisor should be based.
For more information on franchising, please feel free to contact us: (800) 610-0292.
FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.