We have all heard of the success stories of McDonalds franchise owners and other cases of similar riches. However, those types of franchises take a tremendous amount of upfront capital. Many of us do not have access to those kinds of funds. And for those of us who do, we may not want to commit and/or risk that much capital. However, there are some very exciting franchises that are extremely affordable.
Just a note thought, not all low cost franchises are worth it or the same as cited by this great article from franchisebusinessreview.com:
Not all low-cost franchise concepts are created equal. Startup costs, market demand for the product or service, franchise fees, potential revenue, and contract provisions are just some of the factors you should carefully consider. Sifting through hundreds of opportunities to figure out which one is most likely to meet your financial and personal objectives can be tedious and tricky. That’s where Franchise Business Review comes in. We surveyed over 9,200 franchisees from 132 different brands, to identify the top low-cost franchises with the most satisfied franchisees. If you’re interested in purchasing a low-cost franchise that will enable you to be your own boss or to diversify your investments, our List on page 8 is a great place to begin.
In addition they list out some of the benefits and criterea when vetting these types of opportunities and advice if starting one:
Low-cost franchises offer a variety of benefits over more costly franchise opportunities. This is reflected by the satisfaction of low-cost franchisees being 11% more than higher cost opportunities.
Faster Potential Profitability
If you’ve already started researching franchises, you know that many can cost hundreds of thousands or even millions of dollars. Low-cost franchises, however, are a financially viable way for you to own your own business. Less debt, combined with lower start up costs, can result in faster profitability. When we compared the average annual pre-tax income of Low-Cost Franchises vs. All Franchises, we found it was $75,217 for Low-Cost Franchises1 and $86,9402 for All Franchises.
Even though profitability may occur faster with low-cost franchises, all businesses take time to be profitable. It is important that you have adequate funds to carry you until your business is generating enough revenue to be self-sustaining. Do your due diligence in order to figure out the amount of money you should set aside since every franchise opportunity is different and your personal financial situation unique.
And of course the flexibility they point out is extremely important and some other points:
Since many low-cost franchise concepts do not necessitate owners being present at a particular location for a set period of time, they offer more flexible schedules than a retail outlet or restaurant. Many can even be operated part-time.
Since the franchise brand is already recognized by customers they know that it offers consistency and appreciate the comfort its familiarity provides.
If you have done extensive due diligence including reviewing the FDD and talking to franchisees in order to identify a strong franchise brand with a proven business model, your chances of building a successful business are greater than if you were starting one from scratch.
Prospective investors tend to favor known brands. Franchises typically fetch a higher resale price than a mom and pop business, and most franchisors will assist you in finding a buyer.
Now it is time to go out and examine some of those opportunities with this advice. Many pet care and senior care service franchises would be in the category of affordability. Those are both enormous markets that seem to always need qualified and professional contribution.
So remember it doesn’t always have to be an expensive restaurant type of franchise that can make you money!