For many people, their dream is to own and operate their own business. Starting your own business can be intimidating at first. One way to ease into business ownership is by investing in a franchise. And, with these affordable franchise options, it won’t even break the bank. Bonus: we threw in some expert advice to help you get started.
What to Look for in a Cheap Franchise
What's the key to finding a franchise business that's lower in cost than the rest? Our experts suggest looking for these two things.
A Home-Based Franchise Option
One thing you should look for when evaluating affordable franchises is the location. “Probably the easiest and quickest are home-based franchises,” says Don Daszkowski, founding member of the International Franchise Professionals Group and FranchiseWire. “With some of these brands, you can be up and running within weeks of signing the franchise agreement.”
A home-based franchise business also means you don’t have to invest in property or open a physical location to customers. This significantly lowers your costs.
Something That’s Less Well-Known
While owning a McDonald’s franchise would give you a lot of brand recognition, it will also cost you a lot more. According to Ben Reynolds, CEO and founder of Sure Dividend, “cheaper franchises are less well-known and don’t require having a physical location.”
Jeffrey Zhou, CEO of Fig Loans, adds, “It will be less expensive to franchise a janitorial service or travel planning business than it would be to franchise a restaurant like McDonald's. Remember, the bigger the name, the bigger the startup cost.”
Cheapest Franchises to Open
If you’re interested in opening a franchise but have a limited budget, there are still plenty of options out there. These affordable franchises just might be the right entrepreneurial track for you.
Complete Weddings + Events
A franchise that meets both of the requirements set out by the experts is Complete Weddings + Events. Franchise owners help people find the right photographers, DJs and videographers for their wedding or event. And you don’t need any training. Complete Weddings + Events provides training and ongoing support to franchise owners.
Here’s the breakdown:
- Initial investment: $10,000–$12,000
- Royalty fees: 8% of annual gross revenue
- Number of U.S. franchises: 192
Cruise Planners
Love cruises? Now you can help others to plan their dream cruise vacation. Cruise Planners franchisees sell vacation packages, such as cruises, land-based vacations, car rentals and trip insurance. Your franchise fee also includes a six-day training course.
“Cruise Planners is an affordable franchise since you don’t need a brick-and-mortar business to get started, which means you might save money on the initial investment,” says Reynolds. “Plus, travel is picking back up in 2021, which might prove to be more profitable for a small and cheaper franchise.”
Here’s the breakdown:
- Franchise fee: $10,995
- Royalty fees: 1%–3% of gross commissionable fares
- Number of U.S. franchises: 2,569
Dream Vacations
Another home-based franchise option is Dream Vacations. Franchisees help others to plan both land and cruise vacations. Included in the franchise fee is training and ongoing support from a dedicated business development manager. They also offer franchise discounts for those experienced in hospitality and to veterans and first responders.
Here’s the breakdown:
- Franchise fee: $10,500 (option to put $3,500 down and finance the rest)
- Royalty fees: 1.5%–3% of annual commissionable sales
- Number of U.S. franchises: 1,500
SuperGlass Windshield Repair
SuperGlass Windshield Repair helps franchisees to learn how to repair windshields and provides training and ongoing support for operating a profitable franchise.
For some franchises, there are more costs than just the franchise fee. According to Reynolds, when it comes to SuperGlass Windshield Repair, you’ll need to pay a franchise fee, make an initial investment and “you’ll also be required to meet specific net worth and/or cash requirement limits.”
Here’s the breakdown:
- Franchise fee: $5,000–$17,500
- Initial investment: $18,685–$84,205
- Personal financials: $15,000 minimum net worth and $15,000 cash requirement
Pillar to Post Home Inspectors
Another affordable franchise that doesn’t require a physical location is Pillar to Post Home Inspectors. Started in 1994, this franchise is recognized by real estate agents as a go-to for home inspections across the country. They offer continuing support for their franchisees and the chance to become your own boss and set your own hours.
Here’s the breakdown:
- Franchise fee: $24,500 ($9,000 can be financed)
- Initial investment: $40,445–$49,645
- Royalty fees: 7% of gross revenue
- Brand fund fee (for advertising): 4% of gross revenue
- Number of U.S. franchises: 550
Fit4Mom
This franchise allows you to create your own schedule and conduct classes in your own community. Fit4Mom allows franchisee fitness instructors to teach classes such as Stroller Strides, Fit4Baby, Body Back, Stroller Barre and Fit4Mom Run Club classes.
Here’s the breakdown:
- Franchise fee: $5,495–$10,495
- Initial investment: $6,205–$24,285
- Number of U.S. franchises: 310
Tips to Successfully Open and Operate a Franchise
Once you’ve found the option for you, then it’s time to actually run the franchise. We asked for some expert advice, and these are the tips they offered.
Highlight Your Business Acumen
When you apply to own a franchise, one of the things the franchisor looks at is your previous experience. “Many people are surprised to learn that you don’t need specific industry experience to open a franchise,” said Daszkowski. “What most franchisors look for in candidates is business acumen and soft skills, such as the ability to lead and motivate teams, the capacity to build relationships and the willingness to follow the franchisor’s proven system.”
Understand All the Fees, Monthly Costs and Initial Investment
Before you get too excited about one particular franchise, it’s important to understand all the numbers.
Some franchises have a low initial investment, but have additional, less obvious fees. “Besides the franchise fee and the cost of starting the business, there are other ongoing costs to consider, including staffing, advertising, marketing, rent, supplies and more,” says Daszkowski. “There are also ongoing royalty fees, which could be structured as a set monthly fee or a percentage of gross sales. These are all things to consider when looking at your finances. The franchisor will provide guidance on every cost as well as make recommendations on the liquid capital needed to run the business.”
Understanding the ongoing costs of operating a franchise will help you to understand the long-term investment of the franchise you choose.
Assess Financing Options
While some franchises require you to have a minimum net worth, others care only about your ability to pay the initial investment fee. And, you might even be able to borrow that money.
“If you don't have the liquid capital to pay the franchising fee, you can look into franchise business financing,” says Zhou. “The terms will depend on the financial institution and your own financial situation. Generally speaking, all lenders want to rest assured that they are making a wise investment and will get their money back with interest, so having a good borrowing history and credit score will help get you more reasonable terms.”
And, if a traditional bank loan isn’t an option for you, you might consider a friends and family loan.
Take Advantage of the Franchisee Support and Training
One of the many reasons people choose to become a franchisee instead of opening an independent business is the network of support and training from the franchisor. According to Daszkowski, “The old motto ‘being in business for yourself, but not by yourself,’ is what franchising is all about. But like everything in life, there are pros and cons. With a franchise, you won’t have creative control. You can’t change the logo or menu items, for example. So before you enter a franchise agreement, it’s important to do your due diligence and understand if franchising is the right path for you.”
Ask for Help If You Need It
While you’ll receive a lot of support and training from the franchisor, you can also find a wide network of mentors and information outside of your franchise. “You can learn a lot from reputable franchise news platforms, franchise publications and by seeking guidance from a franchise consultant,” says Daszkowski. “These professionals work with franchise seekers at no charge and know the right questions to ask to help you find an ideal franchise opportunity that not only fits your budget, but also your lifestyle, interests and background.”
Opening a franchise has a lot of benefits. You have a network of support built-in by the franchisor, you have a set initial investment and you have an already trusted brand to offer to customers. With these expert tips, you’re ready to choose the right affordable franchise for you.
Page Grossman
Page is a freelance content marketing writer with experience writing about small business, the future of the workplace and health. She also operates a weekly email newsletter where she shares advice on living an authentic, intentional life. When not writing, you can find Page traveling, fostering older cats and working as a sexual assault advocate.
