Many people are interested in franchising as a way to start their own business. There are many advantages to franchising – you get to own your own business but still have the support of a larger company with a pre-established business model. However, the challenge with most franchises is that they require a good deal of money to start. For example, opening a McDonald’s costs $1.25 – $2.25 million. Most people just don’t have that kind of money.
So, how can an average person open their own franchise? Fortunately, there are several great franchises that don’t require millions of dollars to start. In fact, some of the best franchise opportunities cost less than $60,000. Below are a few of the best low-cost franchising opportunities that we have found.
Chick-fil-A is one of the most well-known restaurants in America today. It sells a variety of chicken meals, including sandwiches, nuggets, and biscuits. Its employees are famous for being very polite, and it’s never open on Sundays. It also has some truly die-hard fans: when the NYC Fulton Street location opened in 2018 the line for lunch on the first day stretched around an entire city block. Not bad for a first day.
But Chick-fil-A isn’t just popular – it’s also almost ridiculously profitable. One single Chick-fil-A restaurant makes on average $4.2 million in revenue every year. That’s $1.2 million more than the #2 spot, Raising Cane’s at ~$3 million, and $1.4 million more than a McDonald’s, which averages $2.8 million. Chick-fil-A also has had incredible growth: its sales grew by 16.7% in 2018 to make it the nation’s third largest restaurant chain. The company is also looking to open new locations in 29 states. So, it’s a pretty hot restaurant to have right now. But even better, this is one of the lowest-cost franchises to start. It costs only $10,000 to open a Chick-fil-A. This is because the company pays for all the set-up costs: buying the land, building the restaurant, and all getting all the required equipment.
But no story is perfect, and sadly Chick-fil-A also has a dark side: although you can operate a Chick-fil-A restaurant, you cannot own it. Chick-fil-A uses an ‘Operator’ model rather than the traditional franchising model, meaning the company retains all ownership of its locations. They also place additional restrictions on operators: you cannot operate more than one location or be involved in any other business ventures while operating a Chick-fil-A. Lastly, but maybe most importantly, it is extremely difficult to become a Chick-fil-A operator: only 0.4% of all applicants get accepted.
But none of this is to say that running a Chick-fil-A is not a good opportunity. On the contrary, it’s one of the best opportunities out there. Low cost, company support, a strong and growing brand – there’s lots to love. While it is certainly not an ‘investment’ franchise, and the ‘Operator’ model may not be the right fit for everyone, we would still highly recommend this franchise as a great low-cost opportunity.
If you are interested in applying to operate a Chick-fil-A, you can do so on their website.
|2019 # of Franchises||2,539||Total Set-Up Costs||$10,000|
|Required Liquid Assets||N/A||Franchise Fee||$10,000|
|Required Net Worth||N/A||Ongoing Royalty Fees||15% of Sales and 50% of Pre-Tax Profit|
Jan-Pro Franchising Int’l. Inc.
Jan-Pro Franchising Int’l. Inc. is a commercial cleaning company that specializes in cleaning large buildings like offices and community centers. The company tends to specialize in corporate offices and has even developed a Signature Clean® Office Cleaning System for its franchisees. This system includes a 5-week training course in how the company cleans and its cleaning standards, after which a franchisee is certified to work to the Jan-Pro standard. In addition, Jan-Pro says it uses only “…non-toxic, eco-friendly…” products to clean, which helps appeal to the growing marketing for ‘green’ services.
Jan-Pro offers two levels of franchising: Home-Based and Executive. Franchisees at the Home-Based level own and operate a single Jan-Pro business. A major benefit of this approach is that franchisees don’t have to find their own customers – the company provides them with a book of accounts to start their cleaning service, significantly reducing the risks not having customers when first starting out. The Executive level means that the franchisee manages a group of Home-Based franchise owners in a designated area. So, instead of running a cleaning business themselves Executive franchisees are more like a regional manager. In this role franchisees are responsible for marketing/finding customers, training, and overall quality control in their area. Both of the options have pros and cons, but either would be a good opportunity for people looking to get into a franchise business.
You can learn more about franchising with Jan-Pro here.
|2019 # of Franchises||9,155||Total Set-Up Costs||~$4,200 – $55,000|
|Required Liquid Assets||$1,000||Franchise Fee||~$2,500 – $44,000|
|Required Net Worth||~$1,000 – $14,000||Ongoing Royalty Fees||Estimated 11%|
e2 Young Engineers
e2 Young Engineers is a great opportunity for anyone interested in teaching, mentorship or the STEM fields (science, technology, engineering, and math). Young Engineers is an education franchise that teaches STEM subjects to children from pre-school to high school. The company’s goal is to educate children while keeping them entertained, with the idea that children learn best when they are having fun; the company calls this ‘edutainment’. Young Engineers creates unique learning kits that include all the teaching materials and items for each lesson – allowing very hands-on learning for the children. The program also has a pretty strong brand behind it: in 2011 its founders won the Youth Business International (a group established by Prince Charles) Entrepreneur of the Year competition, and the program is even endorsed by the European Union Commission. So, a lot of people are excited about this company.
Franchise owners for Young Engineers are teachers who help introduce children of all ages to the STEM fields and help get them interested in learning. Franchise owners are provided with the teaching materials and kits for students to use during the programs. Beyond their usual learning programs, the Young Engineers platform offers a variety of additional income sources for franchisees, including birthday parties, summer camps, professional learning, and even programs for seniors. There is also a good pace of growth at the company – they already have 151 franchises in 43 countries and are looking to expand even more. Joining this company allows you not only to start your own business, but also to have a lot of fun while doing it.
To learn more about Young Engineers, watch this video about their program.
|2019 # of Franchises||151||Total Set-Up Costs||~$36,000 – $60,000|
|Required Liquid Assets||~$35,000||Franchise Fee||$25,000|
|Required Net Worth||$35,000||Ongoing Royalty Fees||Estimated 10%|
Leadership Management International, Inc.
Leadership Management International, Inc. (LMI) is a professional development and training company. Founded in 1966, the company has a long history of offering training services and has developed several trademarked programs. These include the Total Person® system, which helps employees to find balance between their personal and professional lives, and the Total Leader® system, which helps employees improve their productivity and leadership skills. The company also offers programs in time management, personal motivation, leadership for women, and team dynamics. They even have a trademarked ‘life management’ system called My-Tyme.
Clearly, this is a well-established company with a lot to offer its customers. But the company also offers quite a bit to its Licensees as well. There are two franchise levels at LMI – a Master Licensee and a traditional Licensee. A Master Licensee has the rights to sell licenses in their designated region and is responsible for ensuring the success of Licensees in their area. This level is more suitable for people looking for ‘investment’ franchises or who already have extensive business management experience. The Licensee level is a more traditional franchise ownership – Licensees are responsible for starting and maintaining their own business of teaching the company’s programs to customers. They are offered training and support from the company, as well as a mentor who is assigned to them from the start of their franchise. The Licensee level is more suitable for people just starting out in the franchise business.
Overall, this franchise is a great opportunity for anyone looking to have a more professional and people-oriented franchise business. Franchise owners will have the opportunity to truly make a difference for companies and individual people through a strongly established training program. LMI is already operating in 60 countries and 23 languages and is still looking to grow around the world.
LMI has answers to some common questions about franchising with them on their FAQs page.
|2019 # of Franchises||458||Total Set-Up Costs||$20,000 – $27,500|
|Required Liquid Assets||N/A||Franchise Fee||$15,000|
|Required Net Worth||N/A||Ongoing Royalty Fees||6%|