How to choose an affordable franchise
The most affordable franchising opportunity is a well-planned one, which includes working with a franchise lawyer as soon as possible. A so-called budget franchising opportunity isn’t going to save you much money or upfront costs if there’s no support system for the franchisee, if it’s a relatively new and unstable company, or if connecting with someone at headquarters is impossible. Look at the whole picture when considering franchising, and make sure you build your own support network from day one.
However, it’s still beneficial to know which opportunities are the most accessible from a sheer budget perspective. Different franchises have different requirements-for example, Pinkberry requires exceptionally strong backgrounds in store management, but that’s not necessarily a requisite for all brands.
Talk with a franchise attorney about your options once you’ve narrowed down your choices. They can provide incredible insight and help navigate these tricky waters. There are a few affordable franchises out there to get started with. However, keep in mind that affordable can mean many things and may be dictated by your capital (or access to it), your financial planning and your location.
What’s More Important than the Bottom Line?
Most people can name a handful of businesses they know can be franchised, but you’d be surprised by just how many not-so-well-known (and treasures!) are out there. However, the fees for franchising are just one consideration. More important is your business plan and your expertise with a particular brand or industry. For example, you might discover a very budget-friendly convenience store franchise option, but maybe you’ve never worked in retail before-let alone at a convenience store or this particular convenience store. However, if you have a background in residential or commercial cleaning, paying a little more for a cleaning services franchise can result in better profits and success.
Your region also plays a big role. There are some states with zero income taxes, and others with income taxes in the double digits. Some regions offer very amenable cost of living, while others (think Manhattan, Silicon Valley and the like) are very expensive. The cost of your franchise is subjective based on taxes, cost of living, the average cost of commercial property (if applicable) and so on.
Just like starting a non-franchised business, you need (and may be required by the franchise) to have a solid business plan, including a budget, in place. Drafting this plan will help you pinpoint your current assets, potential investors, challenges, detailing of costs for the coming months and can keep surprises from popping up. A working budget should be in place well before applying for a franchise. The Small Business Association (SBA) combined with a savvy franchise lawyer can help you perfect your plan, including the budget, to keep costs low and manageable.
Remember: It’s important to choose a business you admire, respect and have experience managing. Follow your passion, and let the startup costs be just one of the factors. Talk with your franchise lawyer about pros, cons, fine print and make sure transparency is apparent.