In this franchise guide, we’ll explore more approachable business models that require less cash to launch. Joining a franchise vs. starting your own business!
Opening a franchise can be incredibly expensive. It requires a substantial initial investment and franchise fees that can cost hundreds of thousands of dollars — sometimes surpassing over a million dollars.
However, in this guide, we’ll explore more approachable business models that require less cash to launch. Before you get started, check out these franchises under $100k that span a wide range of industries.
Before we begin, let's talk about why you might be interested in a franchise. For one, franchises give you the comfort of joining an established brand that has a proven business model. They also offer resources like advertising support and ongoing training. Here’s a closer look at some of the other appealing aspects of starting a franchise.
Starting a business can be daunting, particularly if you’ve never done it before. The best franchises will offer their business owners a support system that helps them succeed. This includes mentorship, business guidance, and training programs for both you and your employees.
When searching for a franchise business opportunity, be on the lookout for companies that offer both onboarding and ongoing training. Companies that are willing to give extensive training are invested in the success of franchise owners, and this training might even be extended to every employee you hire.
On top of that, some franchises have annual seminars that include additional training to give you a much-needed refresher. You can then reinvigorate your business with what you’ve learned through your training and networking with other franchisees.
A main selling point of franchises is that they have a proven business model that reduces the uncertainty of whether or not your venture will succeed. You can start a franchise that has a track record of success in other markets instead of blindly pursuing an idea you’re not sure will work.
You’ll also inherit the benefits of an established brand, so you won’t be starting from a blank slate. Prospective customers will already be familiar with your brand and understand the goods or services you provide.
Here’s an example: Imagine you’re standing in front of two coffee shops, trying to decide which one to choose. There's a good chance you'll opt for the brand you're more familiar with because you already know they offer a solid cup of joe. That type of awareness and reputation is what an established brand can offer your business.
The success of your franchise hinges on the effectiveness of your marketing. You’ll need to inject a decent amount of money into your marketing efforts if you want your franchise venture to succeed. Franchises help you with marketing initiatives and give you a recipe that has been proven to work.
Here are some marketing and advertising initiatives most franchises will assist you with:
Now that you understand some of the benefits of starting a franchise, let's review several franchises that cost less than $100,000 to launch.
With thousands of franchise opportunities out there, it’s hard to know where to begin. If you want to spend less than $100k, that’s a great place to start. (If you want to spend even less, consider these cheap franchise opportunities.)
Next, you’ll need to figure out which industry might interest you. Here are five different low-cost franchises in various sectors.
Kumon Math and Reading Centers help children improve their math and reading skills after school. The company was born out of educational necessity when founder, Toru Kumon, developed an innovative learning method to help his son who was struggling with basic elementary subjects.
The company prides itself on having drastically lower startup costs within its industry. It also pledges to reinvest up to $36,000 into your company to cover startup expenses, so you can get your company successfully off the ground.
Kumon is now the world’s largest education franchise with over 25,000 locations. The initial investment ranges from $70,000 to $155,000.
While there are thousands of real estate companies around the United States, RE/MAX is one of the most recognized brands in this sector. You’d be hard-pressed to go more than a day without seeing a RE/MAX sign in front of a house or commercial space.
This industry leader has expansive technology offerings that allow franchisees to customize a variety of marketing materials. You can customize flyers, your website, and sales presentations with a few clicks. You can even create personal marketing videos and virtual home tours to help sell properties through your online marketing channels.
According to RE/MAX, their agents make average yearly commissions of over $120,000. Your initial investment to launch a RE/MAX franchise ranges from $40,000 to $285,000.
The health and fitness industry may seem like a flooded market, but Anytime Fitness has carved out a niche within the industry. The difference with Anytime Fitness is in its name — they’re open 24 hours for customers to use their facilities.
Gyms are equipped with advanced security systems that let customers exercise even when there isn’t any staff on duty. This means you can make money while you sleep without having to pay employees around the clock.
With over 4,000 locations worldwide, this fitness franchise is booming, especially outside the U.S. Since gym sites can range from expansive to compact, the level of investment varies. The entry point is just above $75,000 and can increase to more than $500,000.
Food franchises tend to be on the pricey side of the spectrum. However, Baskin-Robbins doesn’t have nearly as much overhead as other food franchises such as McDonald’s. This franchise offers customers 31 classic flavors of ice cream and is a household name — no need to worry about brand recognition here.
Baskin-Robbins offers a variety of development options for different budgets and types of locations. You can launch a traditional store — either freestanding or within a retail complex — or you can start a non-traditional shop. Non-traditional stores are placed within other venues — like an airport, transit terminal, or grocery store — and may come at a lower price.
Baskin-Robbins has more than 7,800 locations in over 50 countries around the world. While it might be considered an affordable opportunity within the food industry, it’s one of the more expensive options on this list, with a minimum investment of over $90,000.
You’ve probably heard that nothing in life is certain except death and taxes. And Liberty Tax Service lets you capitalize on that certainty.
Taxes are a predictable and cyclical business, and you can expect a flood of business every year when tax season rolls around. Many consumers turn to a professional tax service to maximize their tax returns, and that’s where this franchise comes in.
Liberty Tax Service is a recognized brand across the U.S. with more than 3,800 locations. It also has relatively low startup costs, with a total investment hovering around $60,000 to $70,000.
While joining an established franchise brand sounds like a somewhat safe bet, there are other ways you can start your own business. Franchise opportunities have plenty to offer, but there are some downsides.
For one, there are unforeseen costs that can add up to more than what you initially planned. For example, franchises have variable royalty fees that can stifle your profitability. You may think you’ll be receiving a hefty paycheck, but then you're left with little in the pot after you pay out franchise royalty fees.
Also, the amount of money you need to start one of these franchises can be quite substantial. Beyond initial investment amounts, you’ll also need to meet certain levels of net-worth and have liquid cash to spend. This can quickly add up and present a barrier to entry.
On the other hand, an option like Hoist can make the most sense. It allows you to be your own boss while giving you the beneficial resources of a franchise, including ongoing training, access to state-of-the-art technology, and around-the-clock support.
Hoist also allows you to start a business with significantly less money — a $10,000 initial investment and $30,000 in liquid assets to support the growth of your company. Plus, Hoist will reinvest $10,000 into your company as you continue to grow.
Joining an established franchise can limit the risks of entrepreneurship. Instead of starting from scratch, you'll inherit the perks of a well-known brand and receive additional support to get your business off the ground.
Some franchises are more approachable than others and require a much lower level of investment. You can get away with starting a franchise for under $100k if that's within your budget.
You can also pursue other opportunities that are more affordable and offer the same resources — if not more — like starting your own small business independently or teaming up with Hoist. Whatever you decide, it’s good to know you have options when the time comes to be your own boss.
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