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Finally – you have decided you want to take the plunge and become your own boss. That's great! Investing in a profitable and sustainable business does not have to wipe out your savings. Owning a franchise means that you become part of an established brand and are able to leverage the strengths of that brand in a very short space of time. It is much easier to hit the ground running with a franchise than it is with a start-up business. Our range of low-cost franchises is an excellent place to look for an affordable franchise opportunity. Below, we have rounded up some key points for you to consider before investing in a low-cost franchise.
Age of Business
Has the franchisor been in business for long? How many franchisees are currently operating a franchise? The first thing you should ask is how long the business has been running and if it is a relatively new franchised business, you should ask for proven results for the business system, so that you know you are investing in a “new” business but with a model that has been tried and tested prior to franchising.
Current Franchisees
Ask your franchisor for a list of their current franchisees and then make it a priority to speak with a selected number of them. You don’t need to contact every single franchisee, but it would be in your best interests to randomly select three to four of these to ask them their opinion on the franchise business. It is worth remembering that a franchise can advertise their business as low cost but add on hefty royalty fees to make up the price in the long term. Make sure you know, from speaking with current franchisees, whether they are happy with the royalties being charged.
Fees
Make sure you are aware of all costs you need to pay before signing any franchise agreement. Common fees would include the initial fee, royalty fee, liquid capital fee, etc. This will ensure you will not end up paying more than you thought at the beginning. Budgeting correctly is key for ensuring that your franchise opportunity is a success!
Compare and Contrast
We recommend that you compare and contrast alow-cost franchise with a high cost franchise competitor and assess why one franchise is cheaper to invest in than the other. Is it a better product or service? Is the high cost franchise more established than the low-cost one? Speak to a range of franchisors in your chosen sector to get a rough idea of how they calculated their franchise fees.
Benefits
Make sure that you are getting a range of benefits for your franchisee fee and not just the acquisition of the franchise rights themselves. Benefits of buying a franchise model typically include training, support, help with marketing and site location. Some franchisors will also offer a fully developed website and help you utilise this platform. Always research a franchise with due diligence and have a clear understanding of the key elements involved within that particular business.
Affordable Franchise Sectors
Low-cost franchises often feature in the vending, property, cleaning, education, petand coffee sectors. We recommend making a list of your interests, skills and experience and then checking our low-cost franchises page to see if any of these match your list.
See how far your investment can take you by checking out our low-cost franchises today!