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With over 700,000 franchise owners in the country today, as reported by Zippia, breaking into the franchise industry is an exciting prospect. Trends like mobile apps, artificial intelligence and contactless options are currently popular among franchisers. However, owning and running a franchise involves more than just following trends.
Here are key details to consider while starting a franchise:
Franchising can be challenging and cash flow plays a crucial role in the success of your franchise. When choosing a franchise to purchase, consider how your initial investment will impact both you and the business in the long run. If you’re looking for a lower entrance fee, you might want to explore some of the least costly franchises available.
Here are the cheapest franchises to buy in 2024.
What are the cheapest franchises to buy?
If you’re primarily considering cost when choosing a franchise to open, it’s crucial to know which ones have the lowest initial investment. Remember, even after opening your business, you may still need to pay advertising fees, royalty fees, or other recurring costs. Here are some of the cheapest franchises to start in 2024:
“FYI: A low entry cost for a franchise does not ensure low running costs. Before you sign, make sure you understand the advertising, royalty, and other expenses.”
Cruise Planners
- Franchise fee: $10,995 or less, based on experience.
- Initial investment: $2,295 to $23,617
- Royalty fee:5% to 3% of gross commissionable fares.
- Type of franchise: Travel
Cruise Planners may not be as widely recognized as other franchises, but it’s a more affordable option. It’s considered one of the most budget-friendly travel franchises available. The cost to start your own Cruise Planners location ranges from $2,295 to $23,617, which is considerably lower than opening a McDonald’s or Dunkin’ franchise.
Proforma
- Franchise fee: $0, based on experience
- Initial investment: Up to $35,000
- Royalty fee: 5-8% of gross volume
- Type of franchise: Print and promotional products
Proforma is a prominent business-to-business (B2B) franchise in the $150 billion print and promotional products industry. Unlike business-to-consumer franchises, Proforma offers a franchise fee and initial investment at a much lower price point. They also provide a 10% discount on the franchise fee for veterans. One significant advantage of owning a Proforma franchise is that you don’t need a large storefront or physical space. Franchisees can operate from a home-based office environment. The franchise training covers essential industry and product knowledge.
Vanguard Cleaning Systems®
- Franchise fee: Fees vary by location
- Initial investment: $5,500 to $36,600
- Royalty fee:5%
- Type of franchise: Commercial cleaning
The janitorial services industry is expected to reach a value of $50.1 billion by 2024, according to Statista. Vanguard Cleaning Systems offers a trusted and reliable brand. It has consistently ranked among the top franchises in Entrepreneur magazine’s annual Franchise 500 list. Franchisees can also finance part of Vanguard’s low initial investment.
United Country Real Estate
- Franchise fee: $8,000 to $20,000
- Initial investment: $10,875 to $50,380
- Royalty fee: 6% to 12%
- Type of franchise: Real estate
United Country Real Estate is highly regarded in the real estate industry. While they don’t disclose their gross sales, the franchise offers a lower barrier to entry with a total startup cost ranging from $10,875 to $50,380. This makes it more affordable to join the United Country Real Estate family and benefit from its reputation and revenue.
Stratus Building Solutions
- Franchise fee: $3,600 to $69,000
- Initial investment: $4,450 to $79,750
- Royalty fee: 5%
- Type of franchise: Commercial cleaning
Opening a commercial cleaning company typically involves purchasing a large amount of equipment. However, when you open a Stratus Building Solutions franchise, most of this burden is eliminated, making it a relatively inexpensive venture. The cost to open a Stratus Building Solutions location is between $4,450 and $79,750.
Anago Cleaning Systems
- Franchise fee: $4,590 to $32,348
- Initial investment: $1,000 to $21,000
- Royalty fee: 10%
- Type of franchise: Office and commercial cleaning
Anago Cleaning Systems, like Stratus Building Solutions, offers cleaning services, but with a focus on regularly scheduled office cleanings. In contrast, Stratus tends to handle more one-off commercial cleaning jobs. Both franchises provide affordable entry into the cleaning industry. Anago has a successful track record and boasts over 1,500 franchises, with more than 50 located outside the United States.
Town Money Saver
- Franchise fee: $0
- Initial investment: $5,700 to $17,000
- Royalty fee: Varies
- Type of franchise: B2B advertising
Similar to Proforma, Town Money Saver (TMS) franchisees don’t need a storefront, inventory, or employees to start. TMS corporate handles accounting, graphic design, printing, mailing, and digital services, allowing franchisees to focus on building customer relationships and growth.
Club Z! In-home Tutoring
- Franchise fee: $19,750
- Initial investment: $10,000 to $15,000
- Royalty fee: N/A
- Type of franchise: Tutoring
Club Z! In-home Tutoring is one of the fastest-growing one-on-one home tutoring companies in the U.S. It offers national franchising opportunities at one of the lowest costs in the tutoring industry. The franchise provides several support measures for its franchisees, such as the proprietary Z! Tutor Match process, which matches the right tutor to each child. It also offers part-time or full-time ownership options and the flexibility to operate from home rather than needing a storefront.
“Fact: Lesser-known brands typically require less overhead, inventory and maintenance.”
Here are three instances of name-brand franchises to show the cost differential between lesser-known and well-known franchise brands.
McDonald’s
- Franchise fee: $45,000
- Initial investment: $464,500 to $2,306,500
- Royalty fee: 4% of gross sales
- Type of franchise: Restaurant
McDonald’s is one of the most famous restaurant franchises globally, known for its fast-food locations. While the franchise is expensive, it remains popular among established entrepreneurs. McDonald’s consistently ranks in the Top 10 Franchises in the World, according to Entrepreneur magazine.
Dunkin’
- Franchise fee: $40,000 to $90,000
- Initial investment: $526,900 to $1.78 million
- Royalty fee:9% of gross sales
- Type of franchise: Restaurant
Dunkin’, known for more than just doughnuts and coffee, is another well-known franchise brand. Opening a Dunkin’ location is slightly less expensive than opening a McDonald’s. Dunkin’ offers both traditional and nontraditional franchising opportunities, with some nontraditional options featuring lower fees. Both opportunities require a minimum net worth of $500,000, but nontraditional may be more suitable for some entrepreneurs.
Taco Bell
- Franchise fee: $25,000 to $45,000
- Initial investment: $575,600 to $3,370,100
- Royalty fee:5% of gross sales
- Type of franchise: Restaurant
Taco Bell, a popular choice for late-night cravings and Tex-Mex cuisine, offers franchising opportunities for motivated entrepreneurs. The chain boasts 42 million weekly customers. However, Taco Bell ranks as one of the more expensive franchises on the market.
“Did You Know: Of Taco Bell’s 7,000-plus restaurants globally, 90 percent of them are franchised.”
Franchises that require low overhead, no storefront, and few or no employees typically require less initial investment to start making money. On the other hand, well-known franchise names, often in the restaurant or cafe industry, require more startup capital due to the need for equipment, uniforms, additional training, and other products. If the franchise requires new real estate development, this adds significant costs. Building a hotel or restaurant franchise has much higher overhead compared to a home- or small office-based cleaning service.
Brand recognition is another factor that contributes to the higher cost of well-known companies as a franchise option. Lesser-known brands are more eager to establish their name in new markets. In contrast, established brands like McDonald’s, Dunkin’, or Taco Bell can charge higher advertising and franchising fees due to their strong community presence and brand recognition.
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What’s the most affordable franchise to start?
Town Money Savers is the cheapest franchise to open when looking solely at startup expenses.
However, when you factor in long-term earnings potential, the decision gets trickier. Would you rather invest a small amount upfront in a franchise that yields modest profits or invest more for potentially higher long-term returns?
What’s the most profitable franchise to open?
McDonald’s is often cited as a top earner, with an average restaurant bringing in around $2.7 million in sales. However, the high upfront investment required means it might not be the most profitable choice for you as a franchisee.
Considering the initial investment and potential returns, Cruise Planners emerges as a strong contender. With an annual revenue of over $545 million, and an initial investment ranging from $2,295 to $23,617, it offers a lucrative opportunity. Moreover, the luxury travel industry is expected to reach $1,574 billion by 2028, according to PR Newswire.
Cruise Planners also stands out for its lower royalty fees, ranging from 1.5 percent to 3 percent of gross commissionable fares, compared to other franchises. Additionally, Cruise Planners allows you to sell a variety of travel services beyond cruises, such as land tours, all-inclusive resorts, hotels, travel insurance, and rental cars.
If you’re passionate about succeeding in the travel industry and want to open a franchise without a massive initial investment, Cruise Planners could be your best bet.
“Tip: The most profitable business to open could be Cruise Planners. It delivers a low-cost franchise with some of the highest commission rates in the travel business.”
What are the benefits of opening a business franchise?
Here are some advantages of starting a franchise instead of building a new business from scratch.
- Capital: Starting a new business often requires a significant amount of capital and time to acquire funding. Franchises provide guidance on equipment and machinery, saving you time on decision-making. Some franchises can also connect you with lenders for easier funding options, reducing the hassle of searching for financing.
- Branding: Establishing a new brand involves creating logos, slogans, and marketing materials, which can be costly and time-consuming. Franchises offer the advantage of using the company’s established branding, leveraging its recognition and reputation.
- Low Risk: Franchises benefit from existing brand recognition, making it easier to attract and retain customers. Customers already familiar with the brand are more likely to trust and choose your business, potentially leading to higher revenue and profitability.
- Management & Marketing Support: Franchise systems typically have a corporate office that provides support in marketing, management, and training. This built-in assistance can be valuable when you need help in these areas.
- Purchasing Power: Franchises often benefit from lower costs on inventory and supplies due to the franchisor’s collective buying power. This cost savings is usually passed on to franchisees, allowing you to operate more efficiently.
