The world of franchising is massive, offering thousands of different opportunities with investment levels and cash requirements spanning the gamut. Luckily some promising low-cost franchise opportunities can be profitable and rewarding—especially if they have a proven track record of success and strong brand recognition.
A franchise’s profitability can depend on many factors, such as the business model, the industry, the location, the competition, and leadership. While low-cost franchises may have a lower upfront investment, some may have lower profit margins and require higher sales volumes or a longer ramp-up time to generate a sustainable income. Researching a franchise thoroughly and analyzing its financials, including its fees, expenses, and profit margin, is important during your due diligence.
Some of the most popular low-cost franchise opportunities include those in the following sectors:
“The potential annual income that a franchise owner can earn is an important metric, but there are many factors that come into play,” said Eric Stites, CEO of Franchise Business Review. “Unlike employees, business owners build equity in their businesses. You should look at the whole investment and understand the long-term value of a business and the annual cash flow it may produce over time. Much of the wealth business owners ultimately realize comes in the form of equity, which they cash out when they sell the business.”
Many franchise owners are happy and successful for myriad reasons. There are also many unhappy or unsuccessful franchise owners in business today. While you may believe that your experience will be unique to you and your values and goals, understanding the experiences of franchisees on both sides of the spectrum can provide important insight. Pay attention to the Franchisee Satisfaction Ratings for any franchise that interests you.
During our research, we got feedback from franchise owners in both camps—the happy and the not-so-happy. In fact, we surveyed 11,900 franchise owners representing over 135 low-cost franchise brands to determine our list of 2023 Top Low-Cost Franchises.
The franchises that made this year’s list have average owner satisfaction 12% higher than our industry benchmark, making them all excellent options for entrepreneurs considering franchise ownership.
Approximately one-third of the surveyed franchise companies have initial investments starting under $100K. With financing, many can be started for as little as $15-$20K, with a few options starting as low as $10K.
Explore our list of award-winning Top Low-Cost Franchises in this guide and online at FranchiseBusinessReview.com to compare investment level and cash required, review company data, download franchise reports, and more. Remember, don’t sign on the dotted line until you’ve conducted your due diligence!