Success Franchise Advisors

Low Cost Franchises – What You Should Know

If you have searched for franchises online or follow them in your social media feed chances are you have seen plenty of ads stating things like, “Franchises for Less Than $30K” and “Cheap Franchise Opportunity”. And yes there are plenty of franchises available for less than $30k but there are some things you should know.

First off, low cost is a relative term. Several years ago some 1000 people were polled and asked, “what is the cost to open a franchise” and the number one answer was $1 million. Yes there are plenty of franchises that do in fact cost $1mil or more to open but currently in the United States the overall average total investment to open a franchise is $225,000.

While there are many franchise opportunities available for a total investment less than $30k the large majority of them are one-person-army, own the business own the job type opportunities and often require hard work with long term minimal ROI. For many there is nothing wrong with that! A lot of people don’t want employees, want to work from home and are content with limited scalability. Would you believe that the large majority of people that become franchise consultants do so as it does represent one of the best options for a low cost opportunity in franchising.

Now if a low cost franchise means more the $100k and less range your options open up significantly with franchises available in a number of industries. Most of these still tend to be, at least to start, one person, or very small staff operations where you still own the business and own the job.

When looking at a more scalable franchise model where the owner serves more as the CEO while having staff that owns the job, great opportunities tend to become more available in the $100k – $250k range and also cover a huge range of models and industries. These tend to be the models that yes, the owner works hard on their business but can also have the luxury of making money when they are not working.

The franchises that represent more of an investment vs. a job, what we call semi-absentee models are often the franchises that tend to exceed the $250k investment range and often into the millions. Quite commonly because these models require a well paid manager, a robust staff right from the start and a significant investment in things like equipment, vehicles, brick and mortar build ou, etc. Semi-absentee franchisees are more investors vs operators, managing a manager and focus the bulk of their attention on a higher level overview of the business.

When it comes to looking at ideal investment levels for your next franchise don’t lose site of funding options such as an SBA loan. There are lots of opportunities available in the higher investment range with strong funding options available, requiring much less out of pocket cash and terms extending to up to ten years.

No matter which category of prospective franchisee you are, a Success Franchise Advisor can help identify strong opportunties available as well as share the various funding options that may be available.

Contact us today for your complimentary, no-obligation consultation.