Franchises under 100k: How to Choose the Best Investment

Franchises under $100k: How to Choose the Best Investment
 

You’ve made the decision to become a franchise owner and want to see what you can do with a $100,000 investment. In franchising, there are actually more options than you might expect at this price point. No need to break the bank, because you can position yourself for profit in a low-cost franchise.

You’re immediately at an advantage utilizing a franchise model compared with being an independent business owner starting from scratch. Face it, business ownership of any kind requires substantial funding. However, in franchising, those upfront costs can be more affordable, allow you a quicker ramp-up and you don’t have to learn a new business from the ground up.

By paying your initial franchise fee, you basically pay the entry fee for starting your business. Franchising is a turnkey operation where you are partnering with an established brand that already has a reputable name, a tested and proven business model, an operational system plus a solid customer base.

Rather than starting from scratch as a sole proprietor, the franchisor has done the heavy lifting with a business concept they’ve already taken around the block for a spin and found that it works well, is scalable and repeatable. They provide you with trademarks, logos, marketing materials, guidance, training and on-going support. Your success is their success so they are dedicated to seeing your business thrive.

What to Look For

So, what will the $100,000 get you? Here’s where your capital is going.

Franchise fee: This is a one-time fee you pay from the get-go. It’s your ticket fee for entry.

Initial Investment: These are the particulars, covering leases, construction costs inventory and anything else needed to get started in your particular franchise.

Ongoing investments: These are the funds you will need to stay in business. These are often the less obvious fees, left out of the equation. These include any royalties that need to be paid to the franchisor for the continued use of their systems plus marketing or advertising fees.

Financial requirements: Most often, a franchisor will require franchisees to have a minimum net worth and liquidity requirements. The point of this is to ensure that you as a franchisee have enough money to keep your business running smoothly until profits begin rolling in.

If you don’t have the cash to cover this investment but you know this is a good option, you can consider going in with a business partner, applying for an SBA loan, applying for a commercial bank loan, or see if your franchisor deals with third party lenders.

Choices of Franchises under $100k

Franchises under $100k are typically service-style businesses and require low overhead and often little to no staff except for you. Many fall into the category of home-based businesses which makes your home office a low-cost corporate headquarters. You will find affordable franchises in just about every sector like business services, travel, home-related services, automotive, fitness, cleaning, and travel to name a few. “Job” franchises are typically the lowest-cost option. They are best suited for franchisees who don’t want a large business, but want to grow a small office working by themselves or with a very small team.

The $100K you are thinking of investing is actually a sweet spot in the industry. More than half of franchise opportunities require less than $50,000 to start. In fact, more than 3% of franchise options are priced under $15,000. With nearly 800,000 franchises operating in the US, there is a good variety of franchises available at lower costs.

How to Choose

The caveat here is to do your homework and look for something you enjoy. No sense in purchasing a home painting business if you’re more of a wallpaper person. Find a category that aligns with your interests, your abilities and your wallet.

Once you’ve made the decision it’s time to review franchise paperwork and evaluate the growth of the brand. Are new locations opening? Have locations closed and if so, why? What is the expected revenue growth and is the customer base improving? How much assistance will I be getting from my franchisor? Do they actually have the expertise to guide me? Will I have all the tools I need to grow? Do I want a more hands-on or hands-off approach? You will learn much of this from the franchisor and their franchise disclosure document or FDD. This provides pertinent information about the franchisor and clearly outlines the relationship between the franchisor and franchisee. Talking with current franchisees to glean their perspective about the brand is another great way to determine if you would be a good fit with this franchise.

Once you are serious about a particular franchise, your next step is to go through the application and interview process. You are being sized up as a potential franchisee as much as you’re researching them. The franchise wants to be certain you will be a good fit for the brand.

Here are a few more items to consider before making that franchise decision. Think about what you want? What are your goals in business and your personal life—will this franchise opportunity allow a good balance? Do you like the idea of being the boss? Would you like to manage a few employees? Do you like the idea of working from home or would you like a brick-and-mortar location? What best suits your lifestyle? What are your strengths and does the franchise you’re choosing fit into that?

RSVP Advertising Fits the Criteria

If you are searching for franchises under $100k, RSVP Advertising could be the right choice for you. We are looking for entrepreneurs who enjoy sales and marketing and are driven to succeed. Our franchise investment has an affordable franchise fee of $15,000, allowing you a quick ramp-up and earlier profit potential.

The RSVP franchise model allows you to work from home or wherever you can have a good internet connection. Maybe that means you work from your favorite coffee shop or your condo at the beach.

As a franchisee, you’ll run an appointment-based direct marketing franchise with no weekends required, no equipment or inventory needed, and minimal overhead.

This is a B2B direct marketing business model with a steady sales stream that has been successful for more than 30 years. We specialize in supporting clients whose businesses seek an affluent demographic.

As a Franchise Member, you will have the training and tools you need with our digital integration that tracks conversions and drives business growth. We assist with everything from your classroom training to website development and on-going support to assist with your success.

If you’re looking for an affordable lifestyle franchise allowing you to enjoy an appointment-based franchise, let’s get started with the next step in your financial future.