What is the Cheapest Franchise to Own?
Since you’re here, you probably already know that owning a franchise is a great way to be your own boss and create the kind of career you dream of. You might have even started searching for franchises for sale as you try to find the perfect fit for you. It’s natural to wonder, during your search, things like “which franchise is the cheapest to buy” and “which franchise is the cheapest to own?”
The quick answer is that there are thousands of franchises and new ones are being started all the time, so there isn’t one specific cheapest option. There is a wide range of starting costs, franchise fees, and minimum required money to start, so some will definitely be cheaper than others.
In this article, we’ll go through what fees are associated with becoming a franchisee and give examples of low cost franchise opportunities that could be a great fit for your needs!
What Is the Cheapest Franchise to Start?
One of the biggest things that you can look for when exploring the cheapest franchises to own in 2022 is the franchise fee and startup capital required for a franchise. This refers to the amount of money you will pay the parent company (franchisor) for the right to use their brand and receive their training to open your own location. It will also cover the other costs associated with opening a business (it might include the cost of stock, employee wages, rent or purchase of a building, etc).
Here are some other popular low cost franchises under $20,000 for you to take a look at, along with the expected total investment.
- CruiseOne/Dream Vacations - $10K liquid capital required, total investment anticipated $495 - $9,800
- BuildingStars - Commercial cleaning solutions franchise focusing on office buildings, $10K liquid capital required, total investment anticipated $2,245 - $8,295
- Cruise Planners - $11K liquid capital required, total investment anticipated $2,295 - $23,617
- Delivery Developers - Local delivery provider, $15K liquid capital required, total investment anticipated $55,000 - $74,000
- CTI-Concrete Technology - Concrete resurfacing provider, $15K liquid capital required, total investment anticipated $24,500
- Commercial Capital Training Group - Diversified finance business, $20K liquid capital required, total investment anticipated $26,000 - $68,000
- The Lending Network - National lending and financial services business, $20K liquid capital required, total investment anticipated $29,995 - $99,995
- LIME Painting - Painting company for high end homes and businesses, $20K liquid capital required, total investment anticipated $124,700 - $162,375
As you can see from these examples, the liquid capital required to start a franchise and the actual amount it is likely you will spend before you can open for business can be very different amounts. Liquid capital means how much cold hard cash you need to buy the rights to run your franchise and get your training, costs that are unlikely to be eligible for grants, loans, or lines of credit.
Total investment anticipated includes everything else that will be needed, like securing a location, hiring and training staff, buying startup materials, etc. These are more likely to be expenses that can be deferred until profits start coming in, or paid for with other funding sources.
It’s important to keep these amounts in mind when you think about how to invest in a franchise that will work the best for you.
What Is the Most Profitable Franchise to Own?
Another way to think about what makes a franchise cheap to own is to consider how much ongoing operating costs there will be. For example, you could search for and find cheap franchises under $1,000 but that low entry cost doesn’t tell the whole story about how much the franchise will cost for you to own in the medium to long term. Some of the very low cost franchises may be less likely to generate profit - meaning you never see a return on your investment at all. Other times they may be advertised as very low cost to start, but be leaving out all the extra expenses they will require before you can actually open the doors.
You might find that what works best for you is to weigh the startup costs of opening a franchise with the long term return on investment you can expect from that franchise. It may turn out that a well-known, popular franchise with a higher starting cost could work out cheaper in the long run because you will make your investment back quicker. The question “Which franchise is best and cheapest?” may be a better one to ask to get to these kinds of answers. There are many funding options that can bridge the gap and make starting one of these franchises a good option, even with limited finances.
Best Franchises to Own in 2022
At Franchise Gator, we are passionate about connecting people with successful franchises! That’s why we created a list of our best performing franchises this year. With this top performance comes great opportunities for profit. Even though some of these opportunities require more startup money, they also may give you a quicker payback and could be cheaper to operate overall.
So, which is the best franchise to buy if you are looking for low cost franchises with high profit for $50K or less? These are some great options:
Postal Annex - Shipping company, $50K liquid capital required
StretchMed - Stretch therapy providers offering 1-on-1 stretching to relieve pain and increase flexibility, $30K liquid capital required
Dryer Vent Wizard - $30K liquid capital required
Men in Kilts - Exterior home cleaning franchise with an eye-catching difference, $30K liquid capital required
Glass Doctor - Glass repair and replacement for home or auto, $50K liquid capital required
Cheapest Franchise to Own in Fast Food
When a lot of people think about franchises, fast food restaurants or fast casual dining is the first thing that comes to mind. It’s not surprising why—franchises in the food industry make up around one-third of all franchise businesses in the US, and they employ more than five million people.
Because fast food franchises require a physical location, staff, and specialized equipment, they will not be the absolute least expensive options to get started with a franchise. But the potential return on your investment can more than make up for the higher starting cost.
So, what are the most profitable fast food franchises to own? Here are some great contenders:
Oath Pizza - $100K liquid capital required
Calliope’s Poboys - $150K liquid capital required
Bruster’s Real Ice Cream - $100 K liquid capital required
Shuckin’ Shack - $250K liquid capital required
The Great Greek Mediterranean Grill - $150K liquid capital required
Vocelli Pizza - $100K liquid capital required
Is it Cheaper to Buy a Franchise or Start a New Business?
Starting your own business, whether it be a franchise or a completely independent venture, takes some money to begin with. Which one is cheapest depends on so many different things that no one answer is true in all cases. There are pros and cons financially on all sides. Let’s look in more detail into what can make opening a franchise location the cheaper option overall.
- Predictability - When you open a franchise, you are working from a set playbook with a proven track record. The parent company and other franchisees have put a lot of work into opening and running these businesses already, and they can give you a very good idea of exactly what to expect. Being prepared for the specifics of your business will save you costly mistakes or last minute unexpected expenses.
- No Costly Trial and Error - If you start a brand new, unproven business, you will be setting everything up yourself. There are so many options for every element of running a business (from point-of-sales software to web hosting, packaging to logo design). If you become a franchisee, a lot of the trial and error of which things are worth the money and actually make your business more profitable is done for you. If you start from scratch, you will likely make mistakes along the way that can cost you money.
- Built-In Customer Base - The first day you open your doors as a franchise owner, customers will know about your brand and be ready to use your services. The parent company of your franchise will have already invested a huge amount of time and money into advertising the business and developing a reputation that makes customers more likely to shop with you. Starting a business from scratch will not give you any of these starting benefits.
- Ongoing Support - Being a business owner has so many great upsides, but it can also be hard to go it alone. With a franchise, you typically have access to ongoing training and a network of others using the same proven business model to be successful. If you compare that to having to pay for your own training, business coach, and marketing department—franchise ownership can certainly be the cheaper option.
Franchise Gator: Your One-Stop-Shop for Franchise Opportunities!
At Franchise Gator, we know franchising can be a great, low cost way to start the business of your dreams. We want you to be successful on your franchise journey, with whatever budget is best for you. We make it easy to search for your new career as a franchise owner and provide a plethora of useful resources to get you started.
When you're ready to find the right franchise for you, use us to search for your best business opportunities—whatever your budget. Our website offers a Search by Investment Amount option so you can narrow your search to look for Franchises under $10,000, under $30,000, or whatever your preferred investment level is.
We also have over 100 free educational resources to answer all of your questions about starting your own franchise before you commit. These include everything from articles about how to secure startup funding, to weekly franchise reports so you don’t miss any new opportunities.
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As of January 25, 2021:
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