Franchising is an excellent way to start a business. In exchange for your financial investment, you receive a proven business blueprint to follow. In addition, you get support for managing your franchised business. Many popular franchise opportunities cost hundreds of thousands of dollars. Add startup costs and the average franchise investment can easily reach a million dollars. If you want to start small, look at low-cost franchise opportunities that require less than $50,000 to get started.
Identification
A franchise with startup costs below $50,000 is considered low-cost for most industries. However, you can also find franchises with costs between $10,000 and $25,000, and there are quite a few franchises with startup costs below $10,000. The majority of low-cost franchises are service businesses. Often these franchises can be home-based or they require less space and financial resources than more expensive franchises like fast-food operations.
Types
An investment from less than $2,000 up to $50,000 will give you a wide range of choices for low-cost franchises. Popular low-cost franchise opportunities include travel planning, commercial and residential cleaning, educational services and business services. Several food-related franchises and even a couple of dollar stores also have low-cost opportunities. Several nationally known commercial cleaning franchises cost less than $5,000 to start. You can open tutoring and exercise franchises with investments ranging from $10,000 to $50,000. Residential cleaning or maid services can be started for under $25,000. Some tax preparation services and business services, such as publishing and promotional items also fall below $50,000.
Misconceptions
Some low-cost franchises may not be a bargain because monthly franchise fees, advertising, training and even product fees add up quickly. The Federal Trade Commission requires that all franchisors provide interested buyers with a document called the Uniform Franchise Offering Circular (UFOC). You can compare franchises within an industry and across industries by studying the UFOC and reviewing what each franchisor gives you for your investment. Make certain that you understand how much training and support you will get for your investment. Make note of every additional fee that the franchise requires after your initial investment.
Expert Insight
Before you seriously consider investing in a low-cost franchise, conduct your own research into the potential earnings and profit from the franchise opportunity. Review the company's ranking in its industry. Many business sites evaluate and rank the performance of large and small franchise opportunities. You can narrow your possible choices by gathering information about how the franchise has performed in markets similar to your own. Try to locate current franchise owners. Ask them how much training and support the franchisor has provided. Discuss your interest in the franchise and get their opinions about investing in it.
Considerations
Consider a low-cost franchise opportunity that fits your skills and your personality. Budget franchises typically provide less training and support than ones that are more expensive do. If you are a quick learner who does not need much hands-on training, you may be able to master online or computer-based training for your franchise quickly. On the other hand, if you have limited business management and marketing, you should invest in a franchise opportunity that provides the appropriate level of training that you need to get your business up and running.
