Might a Low Cost Franchise be Right for Your Next Business?
If you’re just starting out in business, you may be looking for a franchise that won’t cost you an arm and a leg. You’re not alone – several of the most successful franchise operators started out with just a single unit. If you have more ambition than you do startup capital, you can still make your franchise dreams come true.
Cutting Costs
Usually, the most expensive franchise opportunities cost around $100,000. However, if you’re on a tight budget, you could score a franchise for as low as $10,000 or $20,000. The best ways to keep costs low is to start a franchise that’s home-based or that you can operate from a kiosk. Part of the reason why these franchises are so cheap is because you don’t have to lease space, at least not at first. Some franchise owners will also let you have a scaled down version of their brand to franchise on your own. Lastly, there are part-time franchises available which keep owners from going into debt while getting on their feet.
Tips for Finding Low Cost Opportunities
1. Just because a franchise doesn’t require a lot of startup capital, that doesn’t mean your profits have to be low too. Franchises that don’t have a ton of overhead can actually have a higher return rate than huge franchises that take a lot of money to run. Talk to a professional about low cost franchises that pack in the most bang for their buck.
2. Beware of scams – if it sounds too good to be true, it probably is. Franchise businesses that cost just a few hundred dollars or, more suspicious, nothing, aren’t usually legit. You also shouldn’t fall for a franchise deal that promises huge returns overnight – it’s just not probable that you’re going to run a business that takes zero time to see a profit.
3. It’s important to find out why a cheap franchise costs so little. Is it because there’s barely any overhead and you don’t need to purchase real estate? Are there low franchise fees being offered? These are all permissible reasons for why a franchise may be affordable. However, if you don’t have to pay a bundle because the franchise orders low quality products or because there’s barely any marketing support, it may not be worth the money.
4. Even if you find a franchise that you love and that you can easily pay for, if you’re not going to be selling a product that’s valuable, your business is going to go under before you know it. Make sure that your target audience will actually benefit from whatever it is you’re selling. Also, make sure that the product is of high quality. A great idea that’s poorly executed won’t sell, period.
5. If you don’t have any experience running a business, that’s okay. Just make sure that you choose a franchise that’s fairly easy to own and operate. The simpler, the better. Or, choose a franchise that comes with support or that requires you to hire employees who can help you with the workload.
Legitimate franchise offerings must always follow Federal Trade Commission regulations when it comes to how they disclose business information to you, and how they walk you through the selling process, and that starts with a Universal Franchise Offering Circular (UFOC). Armed with a UFOC, you can easily dig into the details of the business with a trusted advisor and honestly assess how well the opportunity fits your own finances and ambitions. Remember, picking a franchise is about fitting into their system, and replicating what they’ve already built.
Don’t make the mistake of thinking a low cost franchise is easier to run. The best franchise system is the one that suits you as an individual.
Candace Allen is a professional blogger that provides news and information on the top franchises and franchise areas such as apparel franchises and automotive franchises. She writes for FranchiseExpo.com, the best place to find the top franchise opportunities and businesses for sale.
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Category: Business
