Buying a business doesn’t have to break the bank. But to pursue an entrepreneurial path without draining your savings account, you will need to know where to look. Low-cost, affordable franchises — say, those requiring an initial investment of under $500k — are a case in point. 

These businesses can be a boon for anyone with an entrepreneurial spirit, not to mention the potential for a strong return on investment (ROI). Beyond requiring only minimal financial outlays to get started, the other upside is building on a proven business model, together with ongoing support from the franchisor (for more on key terms, see our article “What is a Franchise?”). 

Let’s break down the range of investments and costs associated with franchises across the board today, then zero in on some of the things that not only differentiate affordable franchises from the rest, but make them a particularly smart investment.

Investment and Costs Associated with Franchises

The net cost of getting a new business off the ground varies wildly — and needless to say, it can be steep. Opening a restaurant, for example, is estimated to cost as much as $10k per month. For a one-person, service-oriented digital business, on the other hand — say, a web designer or a developer — less than $100 per month may be feasible.

Within the world of franchising, too, these costs cover a significant range. Simply to begin operating one McDonald’s franchise, for example, requires an investment ranging from $1,008,000 to $2,214,080, including an initial fee of $45,000 paid to the franchisor.  On the more affordable side, franchises that retail mattress and upholstery cleaning systems, for example, are available for around $5k in initial investment. To get in on the CBD oil craze, meanwhile, will only cost you only $550 at the outset. 

In general, “affordable” franchises should be thought of as those requiring an initial investment of less than $500k. These often come with a lot of upside — and given that the five-year success rate associated with franchises is 92 percent, compared with 23 percent for independent businesses, that means you could see a lot of ROI. Let’s look at four benefits of low-cost, affordable franchises in greater detail:

1. A Roadmap for Success

A key part of the value proposition for most franchises — regardless of whether the initial investment is north of $500k or under $10k — is the fact that they come with a roadmap to power each franchisee’s success. That means a significant amount of business planning, along with training and ongoing support, is usually built in. It also means that franchisor leadership will typically  work in a hands-on manner with each new franchisee, creating a vision of success and breaking down the steps necessary for the franchisee to get there. And that makes sense — after all, the franchisor has a shared investment in the franchisee’s success. The best low-cost franchisees will ensure that you’re covered where it counts, and that includes everything from hiring employees to purchasing supplies, finding your first clients and more.


2. More Affordable Franchise = More Attainable Profits

When your business has lower initial costs, it stands to reason that you can get to profitability faster — and that’s particularly true of low-cost franchise opportunities. From the start, you should be able to map out a realistic business development plan, including key financial milestones and a timeline for profitability. Plus, because you’re using a formula that has worked elsewhere, there should be plenty of data available to help you not only jumpstart your journey, but accurately predict where it will take you — and when.he 

3. Sales and Marketing Support

At best-in-class franchises today, you can expect an active collaboration with your franchisor. Developing your sales plan, identifying networking opportunities, creating and executing  marketing strategies — in all of these areas and more, the franchisor can provide vital support. You may even be given access to new digital technology and tools that can fast-track your development. 

The bottom-line: Even if it’s the cheapest franchise to own, your franchisor will recognize that you need proven methods to drive business leads, and they should work with you to ensure that you have them. 

4. Streamlined Operations 

Since you’re working with a proven business model, nothing about the day-to-day operation of your low-cost franchise will be superfluous or unnecessary. That’s a huge benefit in terms of cost savings, and it also means that daily operations are significantly streamlined and simplified. As a result, you’ll have more time to dedicate to growing your  affordable franchise, acquiring clients and getting to profitability. Plus, you should have access to additional support resources: online forums, peer groups, business coaches and others who can step in to answer questions and foster your growth. 

Key Takeaways 

Looked at objectively, the best low-cost franchises have a lot to recommend them. Simply to recap, those benefits include: 

  • roadmaps to success
  • fewer costs to recoup in order to get to profitability 
  • ongoing sales and marketing support 
  • streamlined and highly efficient operating plans 

So while the initial costs of starting a franchise in general can vary considerably, those requiring only a modest initial outlay — something in the ballpark of $200-$500k— should be looked at closely by anyone searching for an entrepreneurial path today.  Low-cost entry. Significant support and resources. A  huge potential upside. What’s not to love? 

Contact us at Spherion Staffing to learn more about affordable franchise opportunities, our own cost structure — and how you can begin your journey to business ownership today.