Recognizing the best franchise to own isn’t an easy task. Trying to find the best franchise to own with a small budget is perhaps even more difficult. But with the right guidance and financial support, it’s possible to find a profitable company with a proven business model already in place.
Although the start-up costs for a franchise can be a little higher than the initial costs of other types of businesses, it definitely can be worth it. Remember that franchises have lower risks because they have proven in the past to work. Furthermore, there usually is already a customer base in place.
Different Budgets Lead to Different Franchises
Some people think that the best franchise to own in the U.S. is something like McDonald’s or a UPS Store. But some of these better-known operations require a huge outlay of funds from the entrepreneur who buys the franchise.
According to FranchiseHelp, McDonald’s charges a franchise fee of $45,000. The total upfront investment can be more than $2 million for just one location. That’s not necessarily the best franchise to own.
The UPS Store is a little more reasonable, according to Franchise Direct. The franchise fee in some cases is as low as $9,950. Startup costs range from $138,000 to $470,000. Those numbers, although lower, are still out of reach for most small entrepreneurs.
The amount of annual revenue you can earn from a franchise also varies widely. The typical McDonald’s location earns more than $2.4 million per year, according to QSR Magazine. Meanwhile, the average Baskin Robbins location earns just $220,000. To know the best franchise to own, don’t guide yourself only by the earnings. You have to compare up-front costs against expected revenue.
Top 10 Low-Cost Franchises
This said the best franchise to own may very well be a low-cost one. Franchise.com defines a low-cost franchise to be an operation with a fee below $10,000. Fundera.com, on the other hand, considers a low-cost franchise to be anything with a franchise fee under $50,000, and a total initial investment of less than $110,000.
Here are ten franchises with affordable startup costs:
1. SuperGlass Windshield Repair
A mobile windshield repair business may be the best franchise to own if you want to make $20 to $100 per job without having to work in an office. The franchise fee ranges from $5,000 to $17,500, with the initial investment well below $85,000.
2. Pillar to Post Home Inspectors
If you don’t think the auto industry provides the best franchise to own, you should take a look at the home inspection industry. Pillar to Post Home Inspectors currently sells franchises for a low fee of $21,900. The total initial investment is less than $37,000. The average gross revenue of a franchisee in 2018 was $216,057.
3. Property Management, Inc.
If you want to be a landlord without actually owning any property, you could buy a franchise from Property Management. Inc. A PMI location provides landlord services in return for a fee. Startup costs range from $22,750 to $175,100. This includes a franchise fee of $15,000 to $50,000.
4. Rhea Lana’s
This company is in the business of selling used children’s clothes on consignment. The franchise fee is $11,500 to $14,500 with a total startup cost less than $37,000.
5. Jazzercise, Inc.
Offering aerobics and dance classes could bring in some serious revenue, but we must admit this is not easy when you are on your own. By being part of a corporation like Jazzercise, the hardest part of the job (building a customer base and marketing your services) is done for you. Opening a location will set you back just $1,250. That’s for the franchise fee. The total cost to get the center up and running would range from $9,000 to $38,000.
6. Stratus Building Solutions
Could it be that a janitorial service is the best franchise to own? With a franchise fee of $2,700 to $39,600, Stratus Building Solutions offers a 12-year, renewable agreement. The company provides cleaning services to commercial buildings. No physical location is required (you can run it from your home), and the total initial investment is less than $54,000.
7. Cruise Planners
Another home-based business, Cruise Planners, sells travel packages. The franchise fee is under $10,500, and the initial investment is less than $23,000. Over 300 franchises were sold in 2016.
8. Dale Carnegie Training
Perhaps the best franchise to own is an educational business. A Dale Carnegie Training center sells classes on communication, sales, interpersonal relations, leadership, and self-improvement. The franchise fee is $10,000 to $30,000, while startup costs vary considerably: $19,700 to $174,500. Operating income in 2016 for Dale Carnegie franchises ranged from $700,000 to $2 million.
9. Little Kickers
If you’re interested in teaching soccer to preschoolers, Little Kickers has a training program to get you going. The company’s franchise fee ranges from $2,500 to $10,000, with the total investment less than $47,000.
10. Padgett Business Services
With a franchise from Padgett Business Services, you can provide payroll solutions, tax advice and preparation, credit card processing, and other business services. The franchise fee is $15,000 to $56,000 with upfront costs of $20,000 to $100,000.
How Can I Get a Franchise With No Money?
There are several ways to buy a franchise with no money out of pocket. For example:
- Franchisor financing. Some corporations that sell franchises provide financing services to franchisees. Meineke and Gold’s Gym both offer financing for their locations. Sometimes you can get 100% of the package financed.
- Friends and family. Another option is to borrow money from friends or family, although this route does have disadvantages.
- Take out a business loan. Another common method to buy a franchise is to take out a business loan. However, most lenders require at least 2 years of business experience to qualify for a loan. Camino Financial is an alternative lender that only requires a history of 9 months to grant you a loan.
Other Tips to Get a Franchise
Before acquiring the franchise of your choice and starting your own business, there are several things to consider. Follow these tips to guarantee your success:
- Make sure the franchise is a good choice for your area. Not all franchises operate in all areas, and franchise fees can vary based on geographic region.
- Be passionate about the company you’ll represent. You need to believe in the product or service first. Running a business is about more than just profit.
- Grow your franchise with Camino Financial. Many franchises with a verified record of success can be had with a small budget. And with a business loan from Camino Financial, it’s easy to make them succeed. Make sure your franchise has been off the ground for at least 9 months. Then, it’s time to make it thrive! Our online application is quick and simple, and funds are typically released in just a few days. Get started on the road to prosperity today.
Do you want to maximize your profits? Check out this list of the most profitable businesses.