The 12 Best Low-Cost Franchises You Can Purchase In 2020
While buying a franchise can certainly be a profitable investment opportunity, the cost to actually start up a popular franchise is usually quite steep. You will easily invest $2–$3 million to open a Taco Bell or Wendy’s, with the latter fast food chain also requiring you to have liquid assets of $2 million and a net worth of at least $5 million. These requirements put many popular restaurant franchises out of reach for most aspiring franchise owners. However, just because you have to be a multimillionaire to open a McDonald’s doesn’t mean that there aren’t much lower-cost franchise opportunities. You will have to look outside of fast food for the most part, though there are some fast food and restaurant franchises that you can open for under $100K.
Some types of low-cost franchises you can (usually) buy into without breaking the bank include travel agencies, commercial cleaning companies, sports/fitness instructor franchises, education/tutoring franchises, windshield repair, and others. Of course, just because a franchise is inexpensive doesn’t mean it’s a good idea to buy into it—some franchises are cheap for a reason: they’re not a good value. To help you find a quality, low-cost opportunity, I’ve compiled this list of franchises that not only have a low price tag, but also have the potential for high profits.
All of the top franchises on this list can potentially be bought into for an initial franchise fee of less than $50K, but some you can buy into for under $1,000. I’ve divided them into categories to make it easier for you to navigate depending on which type of franchise interests you most.
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Travel Agency Franchises
Starting your own travel agency can be a good idea for organized, self-motivated individuals who love travel and like the idea of helping people score great deals on their own dream getaways. Travel agency franchises are often home-based, meaning there is very low overhead and minimal startup costs.
1. Dream Vacations
- Initial franchise fee: $495-$9,800
- Total initial investment: $1,795-$20,300
- Franchise description: Home-based travel franchise
- Awards & distinctions: Entrepreneur Best Home-Based Franchise (2018), USA Today Top 50 Franchises for Minorities (2017), IFA 5-Star Franchise (2018–2019), #101 in Entrepreneur Franchise 500 (2019)
If you’ve ever dreamed of starting your own travel agency, Dream Vacations can allow you to do that for a 4-figure initial investment– and from the comfort of your own home. Dream Vacations has collected a lot of accolades over the years (see Awards & distinctions above) and current franchisees rate it highly on sites like Glassdoor and Indeed.com. DV lets you market your business under Dream Vacations or its sister company CruiseOne, and is currently looking for new franchisees throughout the U.S.
A major benefit of owning a home-based travel agency franchise like Dream Vacations is its low overhead. DV is also a veteran-friendly business in that it gives a 20% discount on the franchise fee to veterans. The company offers in-house financing if you can’t afford the franchise fee, or you could also get a franchise loan from a bank or online lender.
2. Cruise Planners
- Initial franchise fee: $695-$10,995
- Total initial investment: $2,295-$23,367
- Franchise description: Home-based travel franchise
- Awards & distinctions: #60 in Entrepreneur Franchise 500 and #1 in Travel Agencies category (2019), American Express Travel Representative Excellence Award (2018), Inc. 5000 List (since 2012)
Cruise Planners, an American Express Travel Representative, is another low-cost, work-from-home travel agent opportunity. Don’t let the name fool you; as a Cruise Planners travel agent, you can book a lot more more than just cruises—you can also connect your customers with great deals on airfare, car rentals tours, hotels, etc. Cruise Planners claims they offer the highest commissions in the industry, and they do not require any travel experience.
When evaluating this franchise, I found their website to be very friendly and informative, though I couldn’t find a figure for the initial investment, apart from the $10,995 franchise fee (with no discounts). However, as with other work-from-home, service-based franchises, I expect a home-based business like Cruise Planners would require few startup expenses apart from the franchise fee (according to the official franchise disclosure document, the total initial investment to open a Cruise Planners franchise can range from $2,295 to $23,367). Cruise Planners offers in-house financing if you can’t afford the franchise fee, as well as a deep discount for veterans, first responders, and travel industry professionals. While Cruise Planners has a larger initial franchise fee than some other home-based travel agency franchises, a big perk you get with Cruise Planners is the American Express network affiliation.
3. Travel Leaders
- Initial franchise fee: $1,500
- Total initial investment: $2,270-$16,910
- Franchise description: Travel agency franchise (storefront preferred)
- Awards & distinctions: Largest network of travel agencies in North America, highest-ranked travel management company in Business Travel News’ annual survey (2016), Top North American travel companies in Travel Weekly 2016 Power List
Travel Leaders is a quality, yet inexpensive franchise ownership opportunity if you’re an experienced travel agent who is interested in running a storefront travel agency. According to information in their FDD (Franchise Disclosure Document), it requires upwards of 10 employees to run a Travel Leaders agency, and the initial franchise fee is only $1,500. To be honest, I couldn’t find that much information online about what it’s like to work for Travel Leaders, but the brand has accumulated a number of industry accolades over the years—to be specific, over the past 131 years the company has been in business (Travel Leaders has been franchising for 35 years). Travel Leaders offers several different tiers of franchise ownership, with no long-term commitment.
Travel Leaders is currently seeking experienced travel agents worldwide.
Commercial Cleaning Franchises
If you are a dedicated hard worker but don’t necessarily have a specific skill-set, starting your own cleaning business can really pay off. Commercial cleaning is a fast-growing industry, and most of the top commercial cleaning franchises are flexible and scaleable, with a low initial investment and part-time options.
- Initial franchise fee: $795 (for initial unit option)
- Total initial investment: $2,245-$53,200
- Franchise description: Commercial cleaning for office buildings with part-time option
- Awards & distinctions: #199 in Entrepreneur Franchise 500, Inc. 5000 List (2017)
BuildingStars is one of the largest, fastest-growing franchises in the commercial cleaning industry, with a sole focus on solutions for office buildings. Services include nightly cleaning, green cleaning and consulting, and carpet and floor care. According to BuildingStars, this franchise offers the highest average gross revenue of any cleaning franchise. BuildingStars also has the benefit of allowing you to start small, working part-time to start your cleaning business while you keep the income and security of your current job. The franchise offers three levels of franchise ownership: part-time technician, full-time onsite manager, and corporate manager. Depending on your goals, you can start as a part-time technician, then work your way up to onsite manager and corporate manager as you build experience managing larger-tenant office buildings.
BuildingStars has mostly positive reviews on sites like Glassdoor and Indeed (with average respective ratings of 3.6/5 and 3.9/5 stars on those sites). The company is currently looking for new franchisees worldwide, and can offer in-house financing to cover not only the franchise fee, but also equipment and other startup costs.
- Initial franchise fee: $2,520-$44,000
- Total initial investment: $4,170-$54,700
- Franchise description: Commercial cleaning franchise with multiple tiers of ownership
- Awards & distinctions: #1 Commercial Cleaning Franchise and Top Franchise For Veterans in Entrepreneur Magazine (2019), Top 200 Franchise in Franchise Business Review (2018), Top 50 Franchise for Minorities in USA Today (since 2012)
JAN-PRO is another fast-growing commercial cleaning franchise with multiple tiers of investment, including a home-based option. This company’s network of 10,000+ franchisees focuses on business cleaning, healthcare cleaning, and green cleaning. JAN-PRO franchisees offer cleaning services to businesses such as car dealerships, restaurants, banks, gyms, schools, churches, medical centers, and offices. JAN-PRO’s VetConnectionSM program was the first franchise commercial cleaning program created exclusively for veterans—veterans receive a 15–20% discount on the franchise fee.
JAN-PRO can be a good place to start out with commercial cleaning, as no prior experience is required and they provide you with your own accounts so you don’t have to find customers. You can start a JAN-PRO franchise for less than $5,000, which includes initial cleaning equipment, cleaning accounts, education on JAN-PRO cleaning standards, and ongoing support. The franchisee testimonials I found online say JAN-PRO has flexible hours and good compensation, and like the fact that franchise owners can transfer ownership; however, they report that JAN-PRO can be demanding work until you have well-trained employees.
6. Stratus Building Solutions
- Initial franchise fee: $3,600-$62,100
- Total initial investment: $4,450-$72,850
- Franchise description: Commercial cleaning franchise with multiple tiers of ownership
- Awards & distinctions: #42 in Entrepreneur Franchise 500 (overall) and #2 by Entrepreneur – Top Budget-Friendly (2019), “Franchise Rankings” Winner – Janitorial (2015), Franchise Direct Top 100 Global Franchises Award (2016)
Stratus Building Solutions is a general commercial cleaning franchise that specializes in environmentally friendly cleaning solutions, with branded Green Seal Certified chemicals and equipment. From schools and malls to gyms and warehouses, Stratus’s 1,400+ janitorial franchises have customers in just about every industry. This flexible cleaning franchise boasts 16 different levels of ownership, from home-based to master franchise.
You do not need any prior janitorial experience to open a Stratus franchise. In fact, all you need is $1,000. With the help in-house financing, Stratus says you can buy in with as little as $1,000 down (plus another 10% off the franchise fee if you’re a veteran).
Sports & Fitness Franchises
Fitness and sports coach franchises are another low-cost franchise idea if you are an aspiring fitness instructor who wants to benefit from the recognition of a name-brand sports/fitness franchise. In some cases, you can also use the facilities and gym equipment of a master franchise, while working as an independent instructor.
- Initial franchise fee: $1,250
- Total initial investment: $2,405-$17,155
- Franchise description: Global aerobics class brand with instructor and center owner options
- Awards & distinctions: #94 in Entrepreneur Franchise 500, #6 on Franchise Chatter’s 25 Best Gym and Fitness Franchises of 2019
Jazzercise might scream “80s party ideas” to the uninitiated, but the franchise has actually experienced a revival in demand in recent years (I think once people just realized it’s an easier version of Zumba), and in fact, Jazzercise never even went out of style in certain circles. In any case, demand for Jazzercise aerobics classes is going strong in 2020.
Jazzercise offers several different tiers of ownership. If you just want to teach, it costs around $2,500, including an initial franchise fee of $1,250. If you want to own your own Jazzercise center, it can range from $9,000 to $38,000. Every instructor is technically a franchise owner, however (not an employee of Jazzercise). All new instructors are trained and certified by Jazzercise before they start teaching, and the training cost is included in the initial fee.
Generally, Jazzercise franchise owners rate the franchise approvingly on sites like Indeed.com. But as for the cons, they say the job can be physically demanding and the pay isn’t great. However, if you want to get paid to exercise and can get by on a part-time income, Jazzercise could be a good investment of your time and money, especially if you already enjoy Jazzercise-ing.
8. Baby Boot Camp
- Initial franchise fee: $5,000-$8,000
- Total initial investment: $6,120-$10,249
- Franchise description: Stroller-fitness classes for new moms, taught by “mompreneurs”
- Awards & distinctions: Franchise Business Review Franchise Satisfaction Awards (2016), Entrepreneur Franchise 500 (2015)
Baby Boot Camp offers several different types of fitness classes for moms, including popular outdoor fitness classes designed for new moms to bring their stroller-age kids to. The main idea is for new mothers to get back into shape postpartum, though the franchise also offers fitness and nutrition classes for expectant mothers as well. Baby Boot Camp participants cite the community aspect as the main reason they like these classes; they provide an atmosphere for new moms to make friends with similar-age children in their area. As for the instructors, most of them are franchisees. The very reasonable franchise fee includes everything you need to get started, including your own territory. The company website also lists existing franchise territories for sale, which you might be able to buy at a lower rate. You do not need any fitness instructor experience to own your own Baby Boot Camp franchise.
There aren’t too many franchisee reviews online, but the ones I could find were positive and noted the company is extremely family-friendly and allows you to bring your kids with you to work. There are fewer than 150 Baby Boot Camp franchisees in the country, so this franchise could represent an opportunity to enter a market that hasn’t become oversaturated yet.
9. Soccer Shots
- Initial franchise fee: $34,500
- Total initial investment: $41,034-$53,950
- Franchise description: Youth soccer franchise for children aged 2-8
- Awards & distinctions: #245 in Entrepreneur Franchise 500 (2019), Forbes “Best Franchises to Buy” (2019)
Soccer is a sport that many of today’s parents want to get their children involved in, not always because they want their kids to embark on a serious soccer career, but more often to simply teach their kids the fundamentals of sportsmanship and teamwork at a young age. And if your preschooler has experience with soccer, there is a good chance that they participated in Soccer Shots, as it is the most popular soccer franchise in the U.S. aimed at young children. Soccer Shots instructors/franchisees teach children basic soccer skills, via 30–40 min weekly classes that take place at their preschool, elementary school, or local community park.
While this isn’t the cheapest franchise opportunity you’ll find, it is still possible to start a franchise for under $50K, and the pay is better than many other franchises—according to the Soccer Shots website, the brand’s franchise-wide top earner makes $3,093,392 in annual revenue, while the top first-year owner made $248,240. Soccer Shots Franchising LLC offers in-house financing to cover the franchise fee, and veterans receive a 15% discount on the fee.
Soccer Shots owners also report a high level of satisfaction: 93.5% of Soccer Shots franchisees would recommend the franchise, according to the Franchisee Satisfaction Index by Franchise Business Review.
Fast Food Franchises
Fast food franchises are typically big earners and as such, they often carry large initial investment. However, it is sometimes possible to start a fast-food franchise for under $100K, particularly if it has a non-traditional setup.
10. Chester’s Chicken
- Initial franchise fee: $3,500
- Total initial investment: $12,385-$286,817
- Franchise description: Fried chicken QSR (quick-service restaurant)
- Awards & distinctions: #110 in Entrepreneur’s Franchise 500 (2019), Forbes’ “The 10 Best Food Franchises For Your Buck” (2014), largest Alabama-based franchise
Chester’s Chicken is a low-cost fast-food franchise, and is, in fact, one of the most affordable fast-food franchises out there. Depending on your setup, you can start your own Chester’s for an initial investment of less than $15K. The franchise fee itself is amazingly low, only $3,500. For the right person and location, becoming a Chester’s franchisee could be the perfect opportunity.
A popular southern fried chicken franchise, Chester’s is unique in that it offers flexible franchise options, including store-in-store options. For example, if you already own a grocery store or convenience store, you can become a Chester’s franchisee to start selling Chester’s Chicken in your existing store. In addition to store-in-store locations, many Chester’s locations are located inside of malls, food courts, airports, college campuses, and truck stops. Chester’s was founded in 1965, but only started franchising in 2004.
11. Checkers & Rally’s
- Initial franchise fee: $30,000
- Total initial investment: $203,600-$945,000
- Franchise description: Double drive-through burger chain
- Awards & distinctions: Best Franchise Deal by QSR Magazine (2018), Franchise Satisfaction Awards Top 50 Franchises (2019), #88 in Entrepreneur Franchise 500 (2019), Franchise Times Top 200 (2019)
Another Alabama-based fast-food chain, Checkers Drive-In Restaurants merged with Rally’s Drive-In in 1999 to form a double drive-thru fast-food chain, Checkers & Rally’s. Besides burgers, the chain’s varied offering also includes hot dogs, chicken, fish, and desserts. The initial investment is the highest one on this list, but is still quite low compared with most competing fast-food franchises.
Versatile and eye-catching modular buildings, multiple financing options, and high ROI (28.7% according to the FDD) make Checkers & Rally’s a good bet for an aspiring fast-food franchisee on a budget. This franchise is an especially good deal for veterans, as the company will waive the $30,000 franchise fee entirely for those who have served in the military.
12. Baskin Robbins
- Initial franchise fee: $25,000
- Initial investment: $93,550-$401,800
- Franchise description: Global ice cream brand
- Awards & distinctions: Largest ice cream chain in the world, QSR Top 50 (2018), Entrepreneur Franchise 500 (2019), Franchise Times Top 200 (2017)
Becoming a Baskin Robbins franchisee means joining the world’s largest chain of ice cream stores, for potentially under $100K. With over 8,000 locations across 54 countries, Baskin’s offering includes not only its beloved rotating 31-flavors of ice cream, but also its popular ice cream cakes and frozen drinks. Though Baskin has been around since 1945, the brand is still growing and changing with the times to stay ahead of competitors. Baskin has rolled out dairy-free and gluten-free options in recent years, as well as a mobile app that allows customers to order online and collect points. In 2017, Baskin teamed up with DoorDash to offer home deliveries.
Baskin offers franchise financing for the development of new units, as well as a waiver of the $25K franchise fee and reduced royalty rates for vets. Conveniently, Baskin lists opportunities to purchase existing Baskin Robbins locations on its website. In addition to traditional establishments, Baskin is also currently interested in non-traditional locations, such as airports, college campuses, transit terminals, and other places with a captive audience and high foot-traffic.
In case you were wondering, yes, Baskin Robbins’s sister franchise Dunkin’ Donuts is arguably an even hotter commodity right now. However, it’s also a lot pricier, with an initial investment that ranges from $395,500-$1,597,200, including a franchise fee of up to $90K.
Buying A Franchise: What You Need To Know
Even though it typically requires less leg-work than starting your own business from scratch, buying a franchise is still a large endeavor. There are several important things you need to understand before purchasing a franchise:
- Opening a new franchise is different from buying an existing franchise (a franchise re-sale) and there are different steps associated with each type of transaction. You’ll probably need to hire an attorney to help you perform pre-purchase due diligence tasks like reviewing the FDD (Franchise Disclosure Document).
- Territory is everything in the franchise business. Before buying into a franchise, you need to know how large your territory is and how many franchisees are nearby to make sure you’re not entering an oversaturated market. You can find territory information in the FDD.
- Franchises do not run themselves. Most franchisees must be actively involved in managing their franchise in order for it to succeed. That said, once you are running a successful franchise, the franchise company will often give you the opportunity to start additional locations in your territory.
- Pay attention to the estimated initial investment (as disclosed in the FDD), not just the franchise fee. Oftentimes on a franchise’s promotional materials (including the company’s website), only the franchise fee is listed front and center, as if to imply this figure is how much it costs to open a franchise. This is, of course, misleading, as the franchise fee doesn’t include the cost of things like inventory, labor, real estate, equipment, working capital, etc.
- Is it a franchise or a pyramid scheme? Lots of multi-level marketing companies may sound like a franchise at the outset, promising to let you “own your own company.” But if the “opportunity” focuses mostly on recruiting other people to the company (rather than selling the actual product/service), then you’d probably be wise to run for the hills.
- Find out what other franchisees have to say. Check reviews on Indeed.com, Glassdoor.com, online forums, and anywhere else you can find information on a franchise you’re interested in. This way you’ll know whether the franchise is worth investing your time and money, and you will be prepared for the potential negatives associated with owning that particular franchise.
Read my Step-By-Step Guide To Buying A Franchise for more need-to-knows about how to buy a franchise.
How To Finance Your Franchise Startup Costs
There are various ways to finance a new franchise. Which one you choose depends on the franchise’s policies regarding financing, and the types of financing available to you. Here are a few ways franchisees finance their startup costs.
- In-House Franchisor Financing: Many franchises have in-house financing programs that allow you to finance startup costs such as the franchise fee, equipment, inventory, etc. It’s also common for franchises to partner with third-party financing sources to offer financing for their franchisees.
- Personal Or Business Loan: If your franchise doesn’t offer financing or you prefer not to use their financing program, you can also obtain a loan on your own (depending on if your franchise allows this). It can be difficult for new businesses to get a business loan from a bank, but you might be able to get a startup business loan or a personal loan online. To find out about some good online loan options for new franchisees, be sure to read my post on the best loans for franchises.
- SBA Loan: If your franchise is listed in the SBA Franchise Directory, then you may be eligible for a low-interest SBA franchise loan. Read our guide to SBA franchise financing to learn how to get an SBA loan to finance your franchise startup.
It’s also important to note that most franchises have specific requirements as to franchisees’ personal net worth and liquid cash. Some franchises will not even let you buy into the franchise if you don’t have deep enough pockets to cover your startup costs yourself (in other words, they don’t allow any kind of financing). Most of the franchises on this list do allow you to finance your franchise startup costs via a loan or other means.
Buying a franchise is not cheap. In addition to the franchise fee, you have to pay for inventory, labor, a business space, and other costs. You’ll also need to have enough working capital to run your business and support yourself before your franchise makes a profit. However, there are a lot of low-overhead franchises that you can start without breaking the bank. Particularly, home-based franchises such as travel agencies, commercial cleaning companies, and sports/fitness instructor franchises can be very inexpensive to get started with. There are even low-cost fast-food franchises out there if you know where to look. As long as you do your due diligence before buying into a franchise and secure adequate financing, you will be well-positioned for success as a franchisee.