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Many people have dreams of becoming a business owner, but aren’t sure where to begin. If you have an entrepreneurial spirit but don't necessarily want to start a business from the ground up, looking into low-cost franchises is an opportunity worth considering. It's one of the easiest ways to break into business ownership, giving aspiring entrepreneurs the chance to make their business dreams a reality without the challenges of starting from scratch.
12 best low-cost franchises
Stratus Building Solutions
SuperGlass Windshield Repair
Pillar to Post Home Inspectors
Property Management Inc.
The buy-in cost of some franchises can be very expensive, but others are more affordable and therefore more accessible to hopeful franchisees with limited capital available.
To help you make your dreams of franchise ownership a reality, we’ve compiled this list of the 12 best low-cost franchises you can buy. Each of these franchises has an upfront franchise fee of $50,000 or less and a total initial investment of $110,000 or less.
Low-cost franchise opportunities: What to expect
Although owning a franchise isn't for everyone, it does have some advantages over starting a business from scratch. For one thing, a franchise already has an established brand and customer base. The parent company—or franchisor as they're called more commonly—has already done some of the hard work, such as creating the business concept, designing the logo, and developing marketing materials. Now, you—the franchisee—can jump in and carry out the day-to-day responsibilities of business ownership.
As with any business, of course, you need capital to buy a franchise. Every franchise requires some initial money up front and an ongoing investment of dollars and time.
When purchasing a franchise, there are four main cost parameters to consider:
Franchise fee - Virtually every franchise opportunity requires the business owner to pay a one-time, upfront franchise fee.
Initial investment - Your initial investment covers the materials, labor, and resources you'll need to launch. In our ranking below, the initial investment amount includes the franchise fee.
Ongoing investment - This is the money you'll need to run the franchise on an ongoing basis.
Personal finances - A few franchises require the owner to have a minimum net worth before they're eligible to purchase a franchise. Others have liquidity requirements.
The franchise fee, initial investment, and personal finance requirements are typically the biggest barriers to entry for most potential franchisees. When added up, large franchises like McDonald's come with initial buy-in fees that are more than $1 million. But don't lose heart—affordable franchises do exist that span a wide range of industries—fitness, cleaning, travel, and more. Some low-cost franchise opportunities can even be operated as home-based businesses with no physical location.
Although it's certainly possible to buy a cheaper franchise without breaking the bank, low-cost franchises tend to be less well known too, so your profits from the business might not be very high. Before venturing into one of these opportunities, do your research, review franchise paperwork, and evaluate whether the franchise is expected to have a positive uptrend in revenues and customer demand.
Next up, our top 12 cheap franchises to buy if you want to become a business owner. We'll follow with some information on financing and business loans that can help make your dreams of business ownership a reality.
12 best low-cost franchises for aspiring business owners
1. Cruise Planners
Franchise fee: $10,995
Initial investment: $2,095 to $23,367
Interested in owning a travel company? Then consider Cruise Planners, a franchise representative of American Express, which is one of the most widely recognized cruise planning companies in the country. The bonus: You can operate your Cruise Planners franchise out of your home, making the initial investment in this opportunity among the lowest in the market.
Franchise fee: $5,495 to $10,495
Initial investment: $6,205 to $24,285
Grown out of the popular StrollerStrides fitness programs for mothers of young children, Fit4Mom offers nationwide franchising opportunities with very low startup costs and attractive scheduling options. Becoming a Fit4Mom franchisee allows fitness instructors to conduct their own Stroller Strides Classes, Fit4Baby Classes, Body Back Classes, Stroller Barre Classes, and Fit4Mom Run Club. You can conduct the classes in your own community and on a schedule that's convenient to you.
Franchise fee: $23,500
Initial investment: $56,495 to $162,457
Personal financials: $50,000
With an average of 10 billion square feet of carpet installed each year, it’s no wonder that Chem-Dry has become a successful franchise business. Chem-Dry was founded in 1977 with the goal of cleaning carpets and keeping them clean, and since then, they’ve had a consistent track record of supporting their franchisees to build thriving businesses.
Costs to become a Chem-Dry franchise owner can vary widely depending upon your starting equipment purchases—but some franchisees have begun the process for as little as $56,495, including the franchise fee. Fortunately, if you decide you're interested in opening a Chem-Dry franchise and need help with the initial investment, this franchisor offers internal financing options to help you get started.
Franchise fee: $1,250
Initial investment: $2,500 to $38,000
Of course, we can’t talk about fitness franchise opportunities without including this gem on our list. Founded in 1969, Jazzercise is no longer all about leg warmers and '80s music. The business that started the dance party craze is making a modern and hip comeback with dance and exercise classes. Buying a Jazzercise franchise involves submitting an initial investment, finding an ideal location, and polishing up those dance moves. With the low franchise fee and initial investment, Jazzercise is one of the cheapest franchises on our list.
5. Stratus Building Solutions
Franchise fee: $2,700 to $100,000
Initial investment: $3,450 to $100,000
Personal financials: $5,000 to $10,000 minimum net worth and $2,000 to $20,000 cash requirement
Stratus Building Solutions focuses on bringing environmentally friendly solutions to meet the janitorial needs of office buildings, retail shopping centers, restaurants, and more. This franchise started in 2006 and brought on 91 units in 2017 alone.
Stratus Building Solutions offers potential franchisees two options for buying a low cost franchise: unit and regional or executive master. Both options are relatively affordable, but for those that have only a small amount of money set aside to invest in a franchise, the low $5,000 net worth requirement for unit-level ownership makes this option especially appealing.
Interested in starting at a higher level of investment? Stratus offers in-house financing options to help with the initial franchise fee, equipment, inventory, and other startup costs.
6. SuperGlass Windshield Repair
Franchise fee: $5,000 to $17,500
Initial investment: $18,685 to $84,205
Personal financials: $15,000 minimum net worth and $15,000 cash requirement
With just a few weeks of training, almost any aspiring business owner can learn the necessary skills to become a SuperGlass Windshield Repair franchise owner.
Based in Orlando, with locations operating worldwide, SuperGlass Windshield Repair is among the best inexpensive franchises to buy. Focusing on mobile service has allowed this franchisor to keep pace with customer demands, while also keeping startup and overhead costs low for franchisees.
7. Mosquito Squad
Franchise fee: $15,000 to $32,500
Initial investment: $17,050 to $79,425
Most of us think of mosquitoes as annoyance at best, and, in some cases, even a danger to our health. But could saving your neighbors from this backyard pest be your ticket to a profitable business?
Founded in 2009, Mosquito Squad is one the best-known names in pest control nationwide. Since that time, they have over 200 franchise locations and $50 million in sales. Their franchise fee is cheap, plus Mosquito Squad has third-party lender relationships to help facilitate financing, making it easy to get into business ownership.
8. Pillar to Post Home Inspectors
Franchise fee: $21,900
Initial investment: $36,350
With more than 500 franchises in Canada and the United States, Pillar to Post Home Inspectors is an affordable opportunity for a first-time franchisee. This professional home-inspection franchise was started in 1994, and has become the preferred home-inspection company by a number of real estate partners. Join their franchisee team and enjoy the benefits of work-life balance and a proven business model.
9. Property Management Inc.
Franchise fee: $15,000 to $45,000
Initial investment: $21,250 to $106,800
More than 35% of U.S. residents rent their homes rather than own. The growing number of tenants and rental properties means huge opportunity for the property management industry.
Operating more than 200 franchise locations in upward of 40 states, Property Management Inc. offers franchisees the technology, training, and marketing solutions needed to be successful. And you don't already need to be an expert in property management because Property Management Inc. will provide full-scope training.
Whether you’re an existing property manager looking to grow the scope and support of your business, or you’re brand new to the field but looking for an exciting new career, becoming a Property Management Inc. franchisee gives you a validated model to build your own thriving property management business.
10. Soccer Shots
Franchise fee: $34,500
Initial investment: $41,034 to $53,950
For aspiring business owners who love kids, fitness, and the great outdoors, a Soccer Shots franchise could be the perfect fit. Founded in 2005 by two former professional soccer players, this national franchise enrolled more than 350,000 kids in youth soccer programs last year. And it's continuing to grow at a 60% rate year over year.
Soccer Shots offers in-house financing to help with the franchise fee. Opportunities to become a Soccer Shots franchisee are limited by geographic territories, but many franchise locations are available in the central and western U.S.
11. Dream Vacations
Franchise fee: $495 to $9,800
Initial investment: $3,245 to $21,850
Dream Vacations is another low-cost franchise offering travel agency services that you can run out of your home. They boast award winning training so the startup to get running will be seamless. As an added bonus, they offer heavily discounted trips and vacations to their franchise owners so they can get to know the experiences they're selling.
12. Lil' Kickers
Franchise fee: $15,000
Initial investment: $25,000 to $35,000
Lil' Kickers offers a great cheap franchise opportunity with a small initial investment. While primarily a soccer program for young kids, they also advertise their locations as developmental centers that have impact with kids beyond the soccer field. If you have experience with kids or simply want to give back to your community, consider opening a Lil' Kickers franchise for a rewarding business experience.
Financing options to purchase low-cost franchises
When buying a franchise business, it’s important to know that there are options at a range of price points. And, if you’re concerned about affordability, there’s always the option of taking out a loan to help you along the way.
Plus, even if you're considering an affordable franchise opportunity, it’s likely that you’ll need a little bit of financial help to get started. There are many options for small business loans to purchase a franchise or other business. You can use these funds to help you pay for the initial cost of franchising a business.
How Much Do You Need?
The good news is that lenders like the predictability of franchises. Since a franchise already has had a history of some success, lenders feel more comfortable extending a loan to a franchisee. There's more certainty of successful repayment with a franchise, compared to a brand new company.
Each of these loan products has slightly different benefits, so make sure you find the one that will be right for your future franchise purchase.
Friends and family loan
Provided you have the option available, there can be many benefits to borrowing money from friends and family, including minimal interest rates and a longer repayment schedule. Often, friends and family are willing to give you a much better deal or take on more risk than a bank or traditional lender is willing to.
Of course, there are always drawbacks to involving friends or family in your business finances. It's especially important to document the loan and repayment expectations in a written agreement before funds exchange hands. That can help you avoid a strained relationship if the franchise's business plan doesn’t go precisely according to, well, plan. Plus, if you're interested in writing off the business loan interest as a deduction on your tax return, you'll need this documentation, anyway.
When looking for a more traditional borrowing arrangement to purchase into a specific franchise, your first point of contact should almost always be directly with your franchisor.
Remember, your franchisor has almost certainly been through this process before with other franchisees, so they may be able to offer support, guidance, and even internal funding options or special relationships with lenders to help you with the franchise financing process. In our list above, Mosquito Squad, Stratus, and Soccer Shots all offer some type of internal financing assistance.
That said, along with connecting directly with the franchise to learn about borrowing options, you also shouldn’t overlook comparison shopping with outside lenders to make sure that you’re getting the best available interest rates and borrowing terms.
Traditional term loan
A traditional term loan is likely the first scenario that comes to mind when you think of a business loan. In this borrowing arrangement, you obtain a fixed amount of capital upfront from a lender, then pay back that amount plus interest over time according to a set schedule.
Remember that some term loans carry restrictions that may limit the use of funds on a franchise purchase, so make sure that potential lenders know that you're considering buying a franchise before you sign any loan agreement.
Also keep in mind that a term loan might be out of reach for a business acquisition—without any history of revenue or time in business, this might not be an option for you. Since a business acquisition term loan is infamously difficult to get, you shouldn't count on it as a sure thing.
SBA 7(a) loan
If you’ve done any research into getting a business loan, it’s likely that you’ve heard all about the U.S. Small Business Administration’s loan programs. Long repayment terms and low interest rates make SBA loans the most coveted option around for many business borrowers.
The SBA 7(a) loan is a particularly attractive choice for those looking into low cost franchises to buy because it's highly applicable to franchise purchases and business acquisitions.
But keep in mind that the application process for SBA loans is lengthy and highly selective, so those with a short buying timeline or with poor credit will need to look elsewhere to finance their franchise.
If the purchase price of the franchise you’re buying into has high initial equipment costs, you might be able to use equipment financing.
Available for the purchase of virtually any form of business equipment—computers, production machinery, cars, and more—an equipment loan works similarly to a car loan in that the price and quality of the equipment you’re purchasing is tied directly into the size and terms of your loan.
And, because the equipment itself serves as collateral on the loan, borrowers who opt for an equipment financing loan tend to encounter fewer personal collateral requirements than they would with other loan products.
The bottom line
Starting a new business can be intimidating. But purchasing a franchise can be a realistic—and much more affordable—entry point for many entrepreneurs.
This article originally appeared on JustBusiness, a subsidiary of NerdWallet.