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Franchises With Low Start-Up Costs

August 10, 2020
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Buying a franchise and being your own boss can be one of the most rewarding steps you'll take in your life. Many people dream of doing this. For some, however, the obstacle is being able to afford buying a franchise. The good news is, buying a franchise doesn't have to be expensive. Franchise costs can range from as little as $10,000 to numbers in the hundreds of thousands. A select few franchises can be started for even lower than $10,000, although finding those opportunities are few and far between. Just because a franchise doesn't cost a lot doesn't mean it won't be a good moneymaker, but it's best to be wary of franchises that seem too good to be true with their low start-up costs.

Happy Franchise Owner With Cash in His Hands From His Profits

Believe it or not, when you're looking for a franchise, you'll want to look for franchise opportunities that have low start-up costs—you just have to do a little digging. Realistically, a low-cost franchise opportunity would be anything under the $30,000 mark, but not everybody has that budget. Going in, you just have to know what you want to spend and the kind of return you expect on your investment.

First of all, what is considered a low-cost franchise idea? Many franchises fall between $30,000 and $100,000, but there is a wide range of costs, as mentioned above. What constitutes a low-cost franchise opportunity for one person may not be low-cost for someone else. If you're looking for franchises that fall near or below the bottom end, you should be careful and make sure you're buying a franchise that has the potential to give you the kind of income you're looking for. Not always, but in many cases, franchise opportunities that cost very little money could bring you very little profit.

Two Entrepreneurs Looking for Franchise Opportunities in a Computer

Low-Cost Franchise Ideas

  • Home-Based Businesses: Franchises that operate from your home are almost always lower in cost than franchises with a physical store. Home-based franchises do not require you to pay for the building's rent, furniture pieces, and items or products that need to live at the franchise location. By operating a franchise from home, you save big on the cost of getting the franchise opened because your place of business will be your home. Home-based businesses still pay fees for the use of proprietary and intellectual property, but a lot of the typical start-up costs are not there. Franchises that fall into home-based franchise category are often franchises that sell products that are non-perishable, such as jewelry, clothing products, etc. Many education and service-based franchises can be operated from home and at a low cost as well. These home-based businesses often require little supplies to get started, making them a great way to get into franchise ownership at a low cost.

  • Franchise Owner Running His Franchise From Home
  • Delivery Route Franchises: Some companies sell delivery routes. The product you are delivering could be a package delivery route, food and drink routes, or any other route where products are regularly delivered to customers (businesses, homes, etc.). These types of franchises are normally affordable and come with the opportunity to expand your route as your business grows. When you buy a delivery route franchise, you will usually purchase a "territory" that's protected by the franchisor so no one else can take your business from you. There are some costs associated with delivery route franchises that you might not find in other franchises, such as storage capability, transportation, etc., but these costs are still far less than the costs of having a brick and mortar store.

  • Cleaning franchises, lawn-care franchises, and food truck franchises are other low-cost franchise ideas that appeal to the general population. These are franchises that don't require a lot of training and have low start-up costs but can provide a solid income where you might be able to purchase a more expensive franchise.
Keep in mind; a low-cost franchise may not come with the known brand recognition as you would get when buying some of the more expensive and well-known franchises. This isn't always the case, and even if it is, you can still find low-cost franchises that are profitable and provide a good starting point to franchise ownership.

Entrepreneur Thinking About Which Franchise Opportunity Is Best

Costs to Consider When Looking for a Low-Cost Franchise Opportunity

As we have discussed in some of our other blog posts, there are four main areas to consider cost-wise when you are considering the purchase of a franchise:
  1. Franchise Fee This is the upfront cost of buying the franchise. It is a one-time fee that almost all franchisors charge. Your franchise agreement will go over the franchise fee and what it entails. The fee is usually a part of the initial investment, although it is treated separately in the franchise agreement.
  2. Initial Investment The initial investment will cover materials, labor, training, fees for licensing the brand logo and proprietary processes, building costs (if applicable), and any other costs associated with the franchise's purchase.
  3. Working Capital This is the money you will need to operate the franchise on a day-to-day basis. It's a good idea to have plenty of working capital set aside (at least a years' worth) to keep you going until your business is able to sustain itself. For very well-known businesses, you are going to have a built-in customer base and may not need as much working capital. It's a good idea to get working capital estimates from the franchisor.
  4. Personal Net Worth This doesn't apply to all franchises and certainly not to a low-cost franchise opportunity. For some of the major, very expensive franchises, there is a requirement that you have a minimum net worth before you can even be considered as a franchise owner.

Franchisor and Potential Franchisee Discussing Working Capital Estimates

All USA Franchises Has a Low-Cost Franchise Opportunity Waiting for You

All USA Franchises is a franchise directory on a mission to list all 3000 plus franchise opportunities in the U.S. This means that you can find franchises in all types of industries and at every price point, including very low-cost franchise opportunities. In fact, there are franchise opportunities in a variety of industries for $5000 or less waiting for you to consider buying. At All USA Franchises, you can start your franchise search and look for franchises by industry or by investment. This lets you customize your search to fit your needs, making it easy to find the perfect low-cost franchise ideas. All USA Franchises is free to use, so you can access our full directory at any time.

At All USA Franchises, we also provide you with an informative AUF blog full of helpful articles and tips, along with the latest franchise news. We give you the latest information about the franchise events you won't want to miss. In addition to the blog and events information, we bring you a valuable resource section that helps you locate franchise advisors, franchise brokers, franchise consultants, franchise developers, franchise lawyers, and franchise training services. These resources will save you time and can provide you with additional franchise help when you need it. If you're looking for a low-cost franchise opportunity, browse our directory and make a list of the opportunities available to you. You're sure to find something of interest.

Don't forget to visit our social media profiles, where we are always keeping you up to date with the newest franchise opportunities. There's no better way to stay on top of what's new in the industry and the best franchise opportunities available.

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