Franchises enable you to own and run a business while bearing fewer responsibilities in the operational mode of the business. Whatever franchise you decide to own, whether a restaurant, cleaning agency, or you’ve found a home builder franchise for sale, it is important that you know what your financial commitment will be before starting.
Although franchises are generally cheaper to set up than new businesses, still some franchises are much cheaper and more profitable than others. Before we look into the cheapest franchise to own, an understanding of what a franchise is and how to evaluate the opportunities in a franchise is important.
What Exactly is a Franchise
A Franchise is a business that allows independent or individual entrepreneurs to use the right of a larger company, its business name, logo, and products to operate in an individual location. The owner of the larger company who sells its right to license its business is called the Franchisor. In contrast, the third-party owner and operator of the business location are called the Franchisee.
How to Evaluate The Opportunities in a Franchise.
Entrepreneurs who want to own a new franchise must take into consideration the Franchiser’s support system and their budgetary constraints. No franchise is round perfect.
Some important criteria to consider during the evaluation phase include the Franchise fees and set-up costs, profitability of the franchise, which is determined by the unit growth, new franchisees’ success rate, the franchiser’s financial statement, and the support system of the franchisees.
Another thing to also consider is the time commitment that is needed for a proper set-up, what territories are available and how suitable or convenient it is for you, and the brand recognition or growth. Before any up-front costs, you should make sure all these are properly evaluated.
Franchises That are Cheapest to Own.
Suppose you are looking for the cheapest Franchise to own; there are options for you in different industries. Note that you will still have to pay royalty fees, advertising fees, and other recurring costs.
Meanwhile, here is a list of some of the cheapest franchises anyone can own.
Franchise Type: Fitness Franchise
Franchise fees: $1,250
Initial investment: between $3000 to $38,000
A royalty fee of 20 percent
Jazzercise fitness franchise is a good fit if you are looking to start a low- investment exercise business. You don’t have to spend much to get into the brand’s huge revenue. They also offer various price points to begin with, so that you can find the one that aligns with your budget.
Franchise Type: Travel Franchise
Franchise fees: $6,995
Initial investment: $2,095 to $22, 887
Royalty fee: 1% to 3%
Cruise Planners is a home-based cruise planning agency. They might be a less-recognized brand, but they certainly cost less to own. Since they are home-based, there’s less need to consider real estate costs.
Franchise Type: Commercial Cleaning and Maintenance Franchise
Franchise fees: $2,500 to $45,000
Royalty fee: 10 percent
Initial investment: $4,000 to $52,000
JAN-PRO is a commercial cleaning and maintenance franchise whose clientele is other businesses. They also offer various price points to begin with and have three options for franchising which are an executive business, international master franchise, and home-based opportunities.
Franchise Type: Travel Franchise
Initial investment: $3,300 to $22,00
Franchise fees: $500 to $9,800
Royalty fee: 5 percent to 3 percent
Dream Vacations is a travel agency franchise with no inventory or overhead. It is home-based, making the cost of initial investment low. They also offer discounted investment prices, making it an affordable start and a cheap franchise in the travel industry.
Franchise type: Homebuilder franchise
Franchise fees: $ 29,500
Initial investment: $39,000 to $66,850
Royalty fee: less than Zero
Preserve services is a construction management company that provides home building services and other related services. They provide a lucrative market in their industry, making them a profitable and cheap franchise to start-up or own.
The cheapest amongst the many mentioned is Cruise Planners based on startup costs which are as low as $2,095; Jazzercise follows with a startup cost of $2500. For less confusion as to which Franchise to own, a proper evaluation of its long-term profits will aid you in making a better choice. Contacting a professional like an investment analyst to assist in proper analysis and evaluation is also not a bad idea.