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Low Cost Franchising - Options for Affordable Franchising

While they may not household names, there are many outstanding low-cost franchises for sale that potential franchise owners with limited capital should consider. Though they may lack some of the brand awareness of the better-known franchise concepts that one tends to see on every street corner or advertised on a daily basis on TV, print, and radio, affordable franchises can present an excellent opportunity to get into business for yourself with the support of a proven business model while not taking on the risks involved in investing hundreds of thousands or even millions to invest in a more expensive (and well known) franchise system.

Expensive Franchises - Not Necessarily your Best Option

Often when people are just starting to think about investing in a franchise business, they gravitate immediately toward big, well-known brands like the AAMCO Transmissions franchise, Dollar Store Services franchise, Little Caesars Pizza franchise, Kumon Math & Reading Centers tutoring franchise, and other giant franchises they or their friends may have encountered in their daily lives.

While these major franchises enjoy incredible brand recognition among the general population (and for good reason),their popularity and national footprint can actually make them so expensive that buying into one of these franchise opportunities will be too difficult for someone with only modest savings, unless that person has access to many hundreds of thousands in investment funds from friends and family or their bank.

Fortunately, there are numerous excellent low-cost franchise options available, and those options span nearly every industry an entrepreneur could imagine.

Why Are Some Franchises Much Cheaper than Others?

With more companies trying to further their brand name yet lacking in the resources to open newer branches on their own, franchising seems a very suitable option to them. It is these growing companies which offer lower start-up costs to their prospective franchisees with other liberties such as more flexibility managing their franchises.

Each industry has its own start-up capital requirement ranges, depending on the nature of the business: is the franchise run from an office (or, even more expensive, a customer-facing retail location that requires a store build-out) or is it a home-based / online operation? Is there equipment to be purchased? What are the average number of employees a new franchise owner would expect to hire to operate the business? What are the typical overhead costs, cost of initial supplies, and so forth?

Low Cost Franchises - What are the Typical Investment Costs?

Factoring all these considerations, the cost of a new franchise could range anywhere from under $25,000 for a home based franchise to over $150,000 (or more) for many automotive franchises and retail franchises. Then there are even franchises costing over $1,000,000 (such as many fast food franchises), which could be considered cheap relative to restaurant franchises in general (many of which could cost in excess of $5 million). Therefore, every franchise should be considered in the context of its particular category.

Luckily, franchises exist in almost every industry. Besides fast food, the franchise model is gaining popularity in areas such as Advertising & Promotion, Real Estate Brokerage, Packing & Shipping and Financial Services. So the potential franchisee is not bound by a certain industry but can actually pursue categories about which they have some passion.

For current business owners, conversion franchise businesses, where a going concern converts and joins a franchise system, are a potentially attractive option, typically offering lower start-up costs as the capital for equipment, store build-out, staff recruiting, and so on has already been invested.

What Industries Have Affordable Franchises?

There are literally hundreds of business categories which a prospective franchise owner could consider, almost all of which offer surprisingly affordable franchise options. Below is a list of franchise categories offering franchise opportunities with liquid capital requirements at $50,000 or less:

Feel free to search by our list of the best franchises and you'll discover cheap franchises crossing almost every industry - you're bound to find one that matches your available capital and your interests.

Strategic and Structural Alternatives to Franchising

These are difficult decisions. The solutions are not clear cut from a business or from a legal perspective. It is critical that a company in this position work with qualified counsel to identify an alternative that will have a reasonable basis for an exemption and still make sense from a strategic perspective. The balance of this chapter will look at the many alternatives currently being tested by many U.S. and oversees companies. As you can see, the lines of demarcation are not always clear. The differences between many of these alternatives may in fact be in name only. Some of these concepts are truly innovative and have not been truly tested by the courts or the regulators. In these borderline cases, a regulatory “no-action” letter procedure is strongly recommended. Other concepts are not very innovative at all and merely borrow from long-recognized and analogous legal relationships such as chapter affiliation agreements in the non-profit arena or network affiliation agreements in radio and television broadcasting.

18 Must Answer Questions for Anyone Considering a Franchise

Choosing from over 2500 existing franchises, it becomes really necessary for the potential franchisee to choose a franchise which works according to their strengths and does not become a cause of misery in the future. As everyone has a different personality and preferences it comes as no surprise that a franchise deemed as perfect for one person may not be considered so by someone else. Hearing these statements by 2 IHOP franchise owners clearly shows the difference in attitude.

Lets just sell licenses

This usually comes from an eager entrepreneur responding to the inquiry of an enthusiastic buyer looking to duplicate a nifty new concept. The belief that franchising is too complicated, too slow, and too expensive goes hand-in-hand with this exclamation.