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25 Top Low-Cost Franchises for Startups

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Top Low-Cost Franchises for Startups

Many people dream of becoming business owners, but they don’t know how to get started. In fact, starting a business from scratch can be challenging, and so sourcing for low-cost franchise opportunities can be worth your consideration. The option helps aspiring entrepreneurs to buy a proven concept instead of building a business from the ground.

Therefore, the franchisor will give you well-developed and tested operating details, advertising campaigns, and a marketing plan. Still, they will link you to many other franchisees who can mentor and tell you what it takes to be successful.

Because of these conveniences, franchises come at a hefty price tag. For instance, getting a KFC, McDonald’s, or Taco Bell franchise requires over $750,000. However, you can get a top-ranked, low-cost franchise that will still give you a chance to turn your business dreams into a reality.

Here are 25 top low-cost franchises for startups. These franchise opportunities will allow you to be your own boss without breaking the bank or starting from scratch.

Cost Parameters to Consider When Purchasing a Franchise

Owning a franchise has some advantages over starting a new business from the ground. For instance, a franchise has a ready customer base and an established brand. The franchisor does the hard work by designing the logo, creating a business concept, and developing marketing materials.

After all that, the franchisee just jumps in and continues with the day-to-day responsibilities of owning a business.

A franchisee needs capital just like any other business. You need to make some upfront initial capital and continuous investment of time and money.

Here are cost parameters that you should consider.

Franchise Fee: This is the one-time, upfront franchise fee that a franchisee pay to the franchisor.

Initial Investment: It covers the labor, materials, and resources you need to start the operation. The cost may include the franchise fee in some of the following low-cost rankings.

Ongoing Investment: This is the money you need to run the franchise on a day-to-day basis.

Personal Finances: The minimum net worth you need to be eligible for purchasing a franchise. It’s the liquidity requirements.

Potential franchisees consider franchise fees, personal finance requirements, and initial investment as the major barrier to entry to this kind of business. For instance, the initial buy-in fees for McDonald’s is more than $1 million. However, there are affordable franchises spread across a wide range of industries such as cleaning, fitness, travel, etc.

Actually, you may find affordable franchise opportunities that you can run at home or without a physical location.

On the other hand, some of the low-cost franchises are less known, so you might not make a lot of profits from this kind of business. Thus do your research, establish whether the franchise is required to have a positive uptrend in customer demand and revenues, as well as review franchise paperwork.

Financing Options

Franchise businesses cost a lot of money, but aspiring entrepreneurs concerned about affordability can take a loan to get started. You can use the funds to meet the initial cost of franchising, buy equipment, and more.

Unlike a startup business, lenders are ready to finance a franchise because they like its predictability. For instance, a franchise has a history of success which makes lenders comfortable lending to such a company than a new brand new business. Here are some loan options that you can consider.

1.    Friends and Family

Loans from your friends and family have minimal interest rates and a flexible repayment schedule compared to the one you get from a traditional lender and bank. On the other hand, starting a business with borrowed capital from friends and family has some drawbacks. Unless you get a written agreement with details such as the loan amount and expected repayment, you are likely to have strained relationships

This is likely to happen when the franchise’s business fails to perform as planned or expected. Further, these lenders may expect more when the franchise business thrives more than they anticipated and you didn’t have a written agreement. If you intend to write off the business loan interest as a tax return deduction, you also need this documentation.

2.    Franchisor Financing

Some franchisors offer financing options, and so you should shop around for such companies. They might have had similar arrangements with other franchisees, and as a result, they are ready to offer guidance and support. Still, they might have special relationships with external lenders or have their own internal funding options.

Therefore, ask your preferred franchise about its internal financing assistance and compare that with outside lenders to ensure that you have the best available borrowing terms and interest rates.

3.    Term Loan

With this business loan, a borrower gets a fixed amount of capital upfront but pays back the loan plus interest over an agreed period. One of the drawbacks of the term loan is that it restricts how you will use the funds on the franchise purchase. Therefore, it’s important to discuss with the lender about any potential restrictions and inform them how you intend to use these funds.

4.    Equipment Financing

This is a perfect fit for an aspiring entrepreneur who wants to buy a franchise that has high initial equipment costs. The funds can be used on any equipment such as production machinery, cars, computers, and more. Like a car loan, the equipment loan has the price and quality of the equipment included in the terms and amount of the loan.

5.    Small Business Administration (SBA) Loan

The loan offered by the US SBA programs has long repayment terms and low-interest rates. The SBA 7(a) loan is an attractive choice for aspiring entrepreneurs looking for low-cost franchises. The downside of an SBA loan is the lengthy application process and is also highly selective. Therefore, you have to look elsewhere if you have poor credit or has a short buying timeline.

Here is how to get started.

Top Low-Cost Franchises For Startups

Cruise Planners: This is a travel-related Florida-based company founded in 1994 and joined the world of franchising in 1999. The Vacation planning company is well known countrywide and ideal for entrepreneurs with a passion for travel. You can run this franchise at the comfort of your home, making its initial investment among the lowest in the market. You will sell full-service vacation packages, which comprise trip insurance, land-based vacations, cruises, and car rentals. The franchise fee is $10,995.

Dream Vacations: Are you interested in offering travel agency services? Dream Vacations is an ideal franchise for you because you can run it in the comfort of your home. As a startup founder, there is no need to worry because it offers six-day training at its headquarters in Fort Lauderdale, Florida, which helps you run your business seamlessly. Further, you’re entitled to heavily discounted vacations and trips to help you experience what you’re selling. Dream Vacations franchise fee is $495 to $21,850.

Fit4Mom: The company was founded on the StrollerStrides fitness programs that target mothers of young children. The brand offers affordable franchising opportunities and attractive scheduling options. When you get this franchise, you will conduct your Stroller Strides classes, Stroller Barree Classes, Body Back classes, Fit4Baby Classes, and FitMom Run Club. It also always you run this franchisee and classes in your community and convenient schedule. The franchise fee ranges between $5,495 and $10,495.

Complete Weddings + Events: The wedding industry is quite big, and it’s estimated that it makes $72 billion a year. The franchise fee is $10,000, along with training and ongoing support. The intensive training will equip you to offer your brides and grooms the help they need during their wedding. The course teaches you how to hire professionals such as DJs, photographers, videographers, and more. You will also learn how to charge and keep you updated about the price of weddings in your area.

Chem-Dry: Nearly 10 billion square feet of carpet is installed every year, making Chem-Dry more marketable. This is a successful franchise business whose goal is to clean and to keep carpets always clean. The company has a consistent track record of working with its franchisees to build a successful business. The franchise fee is $23,500 and can rise to $56,495 when you add starting equipment. The good news is Chem-Dry has internal financing options to help new entrepreneurs get started.

Coverall: The Deerfield Beach, Florida-based commercial cleaning company, was founded in 1985 and has over 8,500 locations globally. It offers a program designed to prevent the spread of illness-causing germs in offices. The initial franchise fee ranges from $13,500 to $40,320.

Image One: The commercial cleaning service company was launched in 2010. And today has 103 locations across the country. The franchise fee is $15,000 and includes training in proper commercial cleaning methods, cleaning supplies, equipment, marketing, billing and paperwork, payment collection, and ongoing support. You can also get discounts if you need extra equipment and supplies and help to purchase insurance.

Jan-Pro: The company offers commercial cleaning services to offices and other business types. Its business model has two types of franchises, namely, unit or home-based franchise representing the person responsible for cleaning and the master franchise representing the person who oversees the cluster of units. The initial franchise fee ranges between $2,520 and $44,000.

Jazzercise Inc: The company was founded in 1969 to sell ‘80s music and leg warmers, but today it has brought a modern and hip comeback with exercise and dance classes. Jazzercise franchisees have to find an ideal location where they can polish dancing moves in addition to an initial investment of $2,500-$38,000. Therefore, Jazzercise is a low-cost franchise offering fitness opportunities.

SuperGlass Windshield Repair: The Orlando-based company has a global presence. SuperGlass Windshield Repair is a top-ranked inexpensive franchise you can consider. The brand focuses on mobile service in order to meet customers’ demands and keep overhead costs for startups and franchisees.  The franchise fee ranges between $5,000 and $17,500.

Stratus Building Solutions: The company offers environmentally friendly solutions. Its goal is to meet the janitorial needs of retail shopping centers, office buildings, restaurants, etc. further, it offers two options, namely unit and executive or regional master, at a relatively affordable rate. It’s especially appealing for entrepreneurs with a small amount of capital. Further, it offers in-house financing options to cater to the initial franchise fee, inventory equipment as well as other startup costs. Its franchise fee ranges from $2,700 to $100,000.

Motto Mortgage: Buying a home through a mortgage can be a daunting task to homebuyers. The company was created founded in 2016 to connect loan originators with real estate agents in order to create a seamless, one-stop experience. So a franchise looking for an independently owned office and ready to part with a $12,500 franchise fee can work with Motto Mortgage. Still, a franchise requires an initial investment between $47,800 and $68,100 in order to access a three-day broker-training program covering different mortgage products and services. Additionally, franchisees can access a design center to print their marketing materials.

Mosquito Squad: Mosquitoes are dangerous to people’s health, but you protect your neighbors’ yard from such pests and still make profits by purchasing this franchise. The brand is well known in the pest control world and is in more than 200 locations since its inception in 2009. The Mosquito Squad franchise fee ranges from $15.000 to $32,500 and has a third-party lender relationship in case you need financing to get started.

Help-U-Sell Real Estate: Real estate brokers will charge you a commission when selling your home. This ranges between 3% and 6% or even more based on your sale price. The good news is that this fee-for-service real estate franchise has a different playbook. This means that a homeseller or buyer pays a flat fee for services to list help close on the sale and marketing. The franchise fee is $15,000 and includes training, marketing supplies, front-and back-office support, and ongoing coaching.

Property Management Inc: Many U.S. residents are renting their homes, so this huge number of rental properties and tenants is a good business opportunity for property management. The company has over 200 franchise locations scattered across 40 states. Franchisees benefit from its training, technology, and marketing solutions which helps them stand out from the competition. So a startup founder with or without knowledge and experience in property management can build a thriving business using its validated model and full-scope training.  Property Management Inc’s franchise fee ranges between $15,000 and $45,000.

Pillar to Post Home Inspectors: The professional home inspection franchise is one of the best choices for first-time franchisees. It began its operation in1994 and has over 500 franchises in the United States and Canada. Most real estate partners prefer its services, and so it has built a good customer base and has a proven business model. Its franchise fee is $21,900, and you will have a good work-life balance when you join it.

Showhomes Home Staging: Aspiring entrepreneurs who want to showcase beautifully decorated homes such as those of HGTV can consider Showhomes Homes Staging. This company takes vacant homes and revamps them with furnishings and accessories to help property agents and homeowners quickly sell their property. It’s easier to sell a neat, clean, and stylish home at a higher asking price than that which is not staged. The franchise fee starts at $10,000 and includes in-person training as well as other services such as website creation, SEO, hosting, proprietary CRM software, and one-on-one business coach.

Rhea Lana’s: Started in 1997, the eponymous children’s clothing consignment franchise is available in 22 states. Its franchisees organize their large consignment events in their locations while the company offers its proprietary inventory, training, bar-coding programs, and website design. Further, the franchisee can hold a consignment event for two to three months each year in a mid-sized market. The franchise fee is $15,000.

Soccer Shots: Are you passionate about fitness, outdoors and love kids? If so Soccer Shots franchise is your perfect fit. This company was founded by two former professional soccer players in 2005. Since then, it has been growing at a 60% rate every year and has enrolled over 350,000 kids. Further, the national franchise offers in-house financing to help aspiring business owners raise the franchise fee, which stands at $34,500. The downside of this franchise is that it is limited by geographic territories because the majority of its franchise locations are located in the western and central U.S.

Lil’ Kickers: It’s a soccer program for young kids and markets its sites as development centers. So these locations offer additional knowledge aside from playing soccer on the field. So entrepreneurs that want to give back to the community and have a rewarding business experience can consider Lil’ Kickers franchise. The franchise fee is $15,000.

HappyFeet Legends International: The company teaches preschool kids soccer skills using nursery rhymes, songs and stories. So its franchisees offer year-round onsite soccer lessons at preschools. It has also created Legends Soccer Club for older children, where they learn more advanced soccer skills. The initial franchise fee is $15,000.

TSS Photography: The company has focused on school and sports team photos since 1983. It has been helping aspiring entrepreneurs start and run a franchise business. The franchise fee starts at $10,500, including sales and business development, photography training, petrography training, and day-to-day operations. Aside from being low cost, it has no standard monthly royalty; instead, the brand makes its money on the markup of products and printing. This is helpful because the franchise retains more profits.

United Country Real Estate: The company focuses on rural, country, and lifestyle properties. It advertises a lifestyle instead of concentrating on where buyers want to live. Some of its lifestyles include small-town living, waterfront, ranching, fishing, hunting, and farming. The franchise fee is $15,000 and includes live webinar training sessions, a one-year office onboarding training program, and an on-demand training tools library.

Chester’s: The company’s initial investment ranges between $8,000 and $300,000, while its initial franchise fee stands at $3,500. Still, you can get started in a new location without breaking the bank, making this fried-chicken franchising opportunity worth investigating.

Dale Carnegie Training: This is a perfect franchising opportunity for entrepreneurs passionate about teaching. The company nurtures thought leaders through teaching business subjects such as leadership, self-improvement, sales, and investment. The initial franchise fee ranges from $10,000 to $30,000.

I'm a passionate full-time blogger. I love writing about startups, how they can access key resources, avoid legal mistakes, respond to questions from angel investors as well as the reality check for startups. Continue reading my articles for more insight.

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