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If you're thinking about how to start a business, buying a franchise could be a smart approach to take. When you purchase a franchise, you buy the right to use an existing brand and access to proprietary information to help you learn how to operate your business.
Some franchising opportunities can be very expensive and have strict requirements for who can buy them. To purchase a McDonald's franchise, for example, you'll not only need to pay a franchise fee of $45,000 but will also need to make an initial upfront investment of anywhere from $989,352 to more than $2.2 million.
But there are other franchises that are much more affordable. And buying one can sometimes give you a leg up compared with building a small business from scratch. If you think purchasing a franchise might be the right approach for you, this guide to the best low-cost franchises can help you explore your options and learn how much they cost.
How do franchises work?
When you buy a franchise, you pay a licensing fee in order to open a new location of an established business brand. This might be a restaurant or a barbershop or a financial services provider, or one of dozens of other types of businesses that expand by selling franchises, or franchising.
The fee you pay varies based on the franchise you decide to buy. Sometimes, you're also required to prove you have a certain amount of liquid assets or net worth before you’re able to buy a franchise. And you will also have other upfront costs to pay as well, such as the expenses associated with buying products or getting your location up and running.
When you pay a franchise fee, you not only buy the right to use the brand but you're also provided with detailed guidelines for how to run your business. If you buy a restaurant franchise, for example, you'll be instructed on what your menu and pricing should be and will gain access to recipes and a network of suppliers. This is often called a "turn-key" business because the idea is you just show up and turn the key to get started.
As a franchisee, you're your own boss, but you have to work within the parameters of the franchise. Most franchises offer tons of support and some of your marketing will be done for you, but you don't have the freedom you'd have if you started a brand new business. And you often have to pay a percentage of your sales to the franchisor in addition to paying the upfront fee.
12 of the best low-cost franchises
If you're looking for an affordable franchise, here are ten high-value, low-cost options to consider.
1. Cruise Planners
Cruise Planners is a home-based franchise affiliated with American Express Travel. When you purchase a franchise, you become a travel advisor operating from your own home. You not only help plan cruises, as the name suggests, but you also provide assistance planning other vacations as well — including land-tours and trips to all-inclusive resorts.
Because you don't need a storefront, the upfront costs associated with starting a Cruise Planners franchise are lower than many other types of franchises. And you don't need to have experience in the travel industry or at a travel agency to get started.
- Initial investment range: $2,095 to $23,367
- Franchise fees: $10,995
2. Dream Vacations
Dream Vacations is another great option for those who'd love to help others plan their perfect vacation.
When you buy into this franchise, you have the choice of marketing yourself either as Dream Vacations or CruiseOne. Whichever option you choose, you don't need an office or inventory. Plus, you don't need experience as a travel agent to get started. All of this helps make Dream Vacations one of the most affordable franchises you can buy into.
- Initial investment range: $1,795 to $20,300
- Franchise fees: $495 to $9,800
3. Fit4Mom
Fit4Mom currently has more than 310 franchise owners, and it's specifically designed for moms who want to get back to work after having kids. This franchise opportunity enables mothers to lead pre- and post-natal health and wellness programs within their own communities and on their own schedules.
From Stroller Strides to Body Back and beyond, franchisees can choose from different fitness programs they offer to fellow mothers — and no matter which option you choose, startup costs are low, so getting your business up and running is affordable.
- Initial investment range: $6,205 to $23,685
- Franchise fees: $5,495 to $10,495
4. Jazzercise
When considering how to make money, Jazzercise offers you tons of flexibility with their dance fitness program. You have the choice of simply becoming an instructor or going to the next level and owning a Jazzercise center of your very own. That means you could run this business part-time or turn it into a full-time endeavor.
The costs can vary dramatically depending on whether you only want to teach or if you want to own a center. But no matter which option you select, you have the flexibility of scheduling classes when it's convenient for you.
- Initial investment range: $2,500 (to teach) or $9,000 to $38,000 (to own a center)
- Franchise fees: $1,250
5. Showhomes Home Staging
Home staging is the process of preparing a home for sale by decorating it so it's as attractive as possible to potential buyers. It's become incredibly popular among realtors and home sellers and Showhomes Home Staging allows franchisees to cash in on the trend.
Showhomes indicates it's been operating for three decades and that it offers franchisees the chance to be successful in both buyers' and sellers' markets. It also provides a good work/life balance because you have the option to work from home.
- Initial investment range: $60,550 to $103,000
- Franchise fees: $35,000
6. Lil' Kickers
If you love children, starting a Lil' Kickers franchise may be the perfect option for you. Lil' Kickers is a soccer program for children, and franchisees receive a detailed curriculum. With this info, you'll be prepared to help kids not just excel in sport but also work on developing essential life skills.
Franchisees get access to a DASH platform for online customer registration. Coaching instructors also receive in-person hands-on training to ensure they can follow the Lil' Kickers program. And, best of all, this extensive training and support comes at a very low investment.
- Initial investment range: $25,175 to $37,050
- Franchise fees: $16,000
7. Stratus Building Solutions, Inc.
Stratus Building Solutions enables you to start a commercial cleaning franchise. There are currently more than 1,800 franchisees across the U.S. and Canada, with locations in more than 50 major cities.
No experience is necessary to start a Stratus Building Solutions franchise, and franchisees have access to a large customer base which could include offices, shopping centers, medical facilities, schools, gyms, and more.
- Initial investment: $3,450 to $50,350
- Franchise fees: $2,700 to $39,600
8. SuperGlass Windshield Repair
SuperGlass windshield repair fixes windshields and scratches on vehicles. It also restores headlights by removing damaged plastic, polishing the lights to clear them, and applying a coating to protect lenses from further harm.
With SuperGlass, you don't need an office since the brand is built around mobile repair. Training is provided and both initial and ongoing costs are affordable.
- Initial investment: $18,685 to $84,205
- Franchise fees: $5,000 to $17,500
9. Baby Boot Camp
This is another franchise that caters to parents who want the flexibility to build a business while taking care of their children. The franchise was started by a founder with almost 20 years of professional fitness experience, and it's focused on offering moms a no-judgment zone where they can connect with other parents and get fit.
If you're interested in becoming a Baby Boot Camp franchise owner, you can start a new franchise in uncharted territory or purchase one of a small number of existing franchises. Whatever you decide, getting started won't cost you a fortune.
- Initial investment: $6,120 - $10,249
- Franchise fees: $5,000 - $8,000
10. Chester's Chicken
Fast food franchises are often expensive to buy into and require huge upfront costs. While the return on investment can be good if you’re in the right location, it can be harder to get started because you need so much money to get off the ground.
Chester's Chicken has lower franchise fees than most fast food franchises. Your initial investment costs, beyond the franchise fee, can also be relatively low depending on your setup. You'll have a choice of opening your franchise in a convenience store or travel plaza; a supermarket; or some other location such as a food court, college, or airport. The startup expenses will vary depending on which spot is best for you.
- Initial investment: $12,385 - $287,572
- Franchise fees: $3,500
11. Property Management, Inc.
Property Management Inc. (PMI) helps aspiring and existing property managers achieve their goal of running a successful property management business. The franchise was started in 2008 by a founder with extensive experience in the real estate industry, and it has grown each year since inception. PMI operates in more than 40 states and territories with 230 franchise offices nationwide.
Franchisees can expect PMI to help them operate across four real estate markets, including residential, commercial, association, and vacation. This helps you maximize your revenue with more than 50 available revenue streams. Your main source of revenue will likely be monthly management fees from property owners, but PMI can help you get sign-up fees, leasing fees, renewal fees, insurance, and more to boost your overall profit.
- Initial investment range: $21,250 to $106,800
- Franchise fees: $15,000 to $62,900
12. Help-U-Sell Real Estate
Help-U-Sell is a fee-for-service real estate franchise that’s been in business for more than 40 years and has more than 100 franchise offices in 26 states. The premise of its services is to help consumers save money by avoiding traditional commission fees charged by real estate agents. Not having to pay a fee based on a percentage of the sales price of a home could save a homebuyer thousands of dollars. This approach can also help franchisees attract more customers.
In addition, Help-U-Sell supports its franchisees with marketing tools to help them focus on getting more business. This includes lead development, marketing templates, neighborhood demographics, email campaigns, and more.
- Initial investment range: $29,650 - $67,650 (info gleaned from sources other than Help-U-Sell)
- Franchise fees: $17,750
How to get started with a franchise business
If you're thinking about buying a franchise, there are a few things you need to do to make sure you're ready to become a franchisee and to set your business up for success.
- Choose something you're passionate about: You don't want to run a restaurant if you don't love to make dining out special, and you don't want to run a travel franchise if you hate planning trips. Choosing a franchise that aligns with your own professional interests will help you stay interested and engaged in your business’s success.
- Establish your budget and cost projections: Remember, you need to be prepared to not only pay the initial franchise fee but also other costs of getting up and running. If you don't have the cash to do this, then now is the time to start looking into business loans so you can set realistic expectations for yourself. Or, if you don't want to take out a loan, it may mean you need to pick a franchise with low startup costs.
- Research different franchise options: Look into upfront and ongoing costs, purchase requirements, and other franchisee rules to make sure you can live by them. Make sure to research if the parent company will provide any ongoing support for you as well.
- Come up with a plan to attract and retain customers: Although most franchises do some of the marketing for you, you still need to be able to bring in local customers to your new location. You'll need to create a business plan to accomplish this.
- Move forward with your franchise of choice: Be sure to read over the licensing agreement carefully and even consider getting advice from a lawyer to ensure you understand your rights and your obligations.
- Apply for a business bank account: Keeping business funds separate from personal funds is important and a business bank account will help you do that.
- Apply for a business credit card: A great business credit card provides you with many benefits including the chance to earn points, miles, or cash back on all of the spending you do as you get your business up and running. There are lots of options for business cards, but some of the best include the Chase Ink Business Preferred® Credit Card, Capital One Spark Cash for Business, and the American Express® Business Gold Card.
FAQs
What is the cheapest, most profitable franchise?
Many of the most profitable franchises, like McDonald’s and Dunkin’, require large initial investments to get started. If you want to avoid big franchise fees and initial investments, consider franchises like Cruise Planners, SuperGlass Windshield Repair, or Dream Vacations. These franchises also don’t require opening a storefront, which helps save on real estate costs.
Can you buy a franchise with no money?
Initial investment costs and franchise fees can be steep, which is why many franchises offer help with financing options. This includes well-known franchises like The UPS Store and Dunkin’. If you’re considering a franchise opportunity, remember that financing may be an option to help you start your business.
Is buying a franchise a good investment?
One of the main advantages of buying a franchise includes getting access to a proven business model. You’ll also likely get training, support, and marketing help as well. But that doesn’t mean you’ll be successful. Every investment has risk.
To increase your chances of success, it’s helpful to have prior experience in the particular industry. This will help reduce the time it takes to learn the ins and outs of the business so you can focus on your franchise. Sticking with the layout you paid for (instead of making your own adjustments and changes) is typically the best course of action. The franchise is successful for a reason, so it makes sense to buy in.
What is a typical franchise royalty fee?
A franchise royalty fee depends on the franchise, but you might expect a typical royalty fee of 5-6% of your revenue. This fee could be lower or higher, but it shouldn’t vary too much. Keep in mind that royalty fees are paid in addition to initial investment and franchise fees, as well as other potential fees.
Why do franchises fail?
Franchises fail for all sorts of reasons. Starting a franchise is essentially the same thing as starting your own business. But the likelihood of success is supposed to be higher because you’re following a proven business model and typically have support from the franchisor.
If you don’t follow the prescribed business model, you could fail. Business owners also might also fail because they have a lack of funds, don’t know how to talk to people, or have never run a business before. Starting and running a business, including a successful franchise, requires a lot of planning and preparation to minimize your risk of failure.
Bottom line on the best low-cost franchises
If you're interested in starting a new business but don't want to start from scratch, a franchise may be just what you're looking for. Franchises offer built-in support for new franchisees, both with business operations and marketing. Plus, the upfront costs of starting a franchise are often relatively low as compared to the costs of building a brand new business. These benefits and others make franchising an attractive option for many budding entrepreneurs, but remember that business ownership still always comes down to putting in the work.