Top Five Least Expensive Franchises
Franchise opportunities aren’t just for the well-funded; many affordable franchises cost under $25,000. Franchises start-up costs are approximate and may change, but here are five of the cheapest franchise opportunities around:
1. Cruise Planners/American Express. This cruise and tour travel agency is a low-investment business that needs less than $10,000 in capital. Like many of the low-cost franchise opportunities, this is a home-based franchise and can be full- or part-time. Franchisees make money by selling cruises to travelers and making commissions off the sales, as well as on sales of additional features like trip insurance and shore excursions. Cruises are big business, and millions of Americans embark on them every year.
2. Jan-Pro Cleaning Systems. Jan-Pro provides commercial cleaning services, and franchises require only $1,000 in capital. The commercial cleaning industry touts itself as recession-proof, and office buildings are the top commercial cleaning clients.
3. Jazzercise. The fitness franchise that blends aerobic exercise with jazz dance, can be started with just $3,000 and offers two types of Jazzercise franchises. With an instructor franchise, entrepreneurs can enroll in a training program to become Jazzercise-certified training instructors and teach Jazzercise classes. With a business franchise, entrepreneurs own the classes and manage a team of instructors who teach these classes. Jazzercise also offers specialty junior classes for kids to attract different audiences.
4. Proforma. This business-to-business (B2B) franchise provides printing services, such as forms, business documents and promotional products. Franchisees act as salesman, explaining the different products to potential clients and showing them which would be best for their particular needs. Franchisees have the actual printing done by printers hired by the franchise. Proforma franchises can be based at home and started for under $20,000.
5. Disaster Kleenup International. DKI franchises specialize in insurance restoration services. Unlike many other relatively inexpensive franchises, Disaster Kleenup franchises are designed for existing contractors to expand their business as a franchisee. As a franchisee, contractors have access to a large network of connections to potential clients and mass marketing as well as shared resources. The total investment for the franchise is $33,000.
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Why I Have an Issue with the Forbes Franchise Rankings
The 5-Year Growth Rate and 5-Year Franchise Continuity are both great independent metrics of how a franchise is doing on average. As a potential franchisee both of these statistics are vital for selecting a franchise - you want to select a franchise that will provide you with a high return on investment and which will survive in the long run. I think these are, as FRANdata and Forbes suggested, two of the biggest (if not the two biggest) and most obvious metrics for whether or not a franchise is a “good” opportunity for a franchisee. But how do you use these to determine which franchise is BEST? This is the fundamental difficulty in coming up with a ranking system - it isn’t the difficulty in separating the good from the meh from the bad - it’s separating the great from the good and the best from the great. In the case of these rankings I found it to be pretty difficult to comprehend how they differentiated between the top ranked franchises. For instance, if you look at the difference between Discover Map (Forbes #4), Just Between Friends (Forbes #5), & Seniors Helping Seniors (Forbes #6) they all have extremely close continuity ratings and substantially different growth rates. In fact, in the case of these three, the overall rankings are opposite the growth rate rankings. Seniors Helping Seniors is ranked at the bottom of these three franchises despite having a growth rate that is 31 percentage points higher than Discovery Map and a continuity that is only 2 percentage points lower. This suggested to me that continuity was viewed as the dominant factor. But that logic didn’t hold for the rest on the “Economy Class” Top 10, as BrightStar Care (Forbes #7) had the same growth rate as Pop-a-Lock (Forbes #8) but a continuity rate that was 12 percentage points lower. These comparisons show that these were not the only two factors that went into the rankings, which is understandable, but no other factors that are explicitly listed in their results seem to be major factors.