Franchising is a tried and tested business strategy that’s been around for many years. A franchise is a kind of agreement where one person or business allows an individual or group to offer goods and/or services under its trade name.
The owner of the existing business is known as the franchisor while the individual or group taking on the new role is called the franchisor. Some massive companies including Subway and Dunkin Donuts have made huge successes from franchising over the years and it’s clear to see why from both sides. But, for today, we’re just going to focus on franchising from the perspective of the franchisees (franchise owners).
Key benefits of franchising
There are so many reasons as to why people choose to franchise for business opportunities. The following are just some of the key benefits:
Free marketing: With most franchises, all the marketing and sales promotions are taken care of by the owner, leaving you valuable time and money free to spend elsewhere.
Support on tap: Being a new franchisee may seem a little daunting at first, but usually, you’ll get plenty of ongoing support from the franchisor. At the end of the day, they want you to succeed as much as you do because of the higher your profits, the bigger their cut. So, you can be sure that they'll do all they can to support you in your new venture.
Sales almost guaranteed: Because you’re setting up shop under an already successful brand, you don’t need to put much work into making yourself known. People will already know the brand and will be coming to you because it’s a name they’ve come to trust over a period of time. The only thing you’ll really need to do is let people know you’re there. The name will do the rest for you.
Key drawbacks of franchising
With every “good” there must, unfortunately, be a “bad.” Here are some of the key drawbacks of franchising:
- Start-up Costs: Probably the most obvious and the most off-putting drawback to franchising is the initial start-up costs. Not only do you have the franchise fee to worry about, but you’ll need money for working capital, legal fees, and premises.
- Less profit: Of course, in being one of many franchise business owners, not all the profits are yours and a portion of all sales revenue goes straight to the franchisor. But then surely a little of something is better than a little of nothing?
- Very little control: Most franchisees have very little control over many aspects of running the business. Working hours, staff wages, and product prices are all things that are often laid out for you as part of the franchise agreement.
If you can get over those minor drawbacks, then becoming one of the growing number of franchise business owners can be a very profitable way of going about your business.
Franchise opportunities for under $5k
There are plenty of business opportunities out there just waiting to be snapped up. The problem is that many of them require a minimum capital amount that runs into tens if not hundreds of thousands of dollars. However, there are still some franchise opportunities dotted around that can be bagged for under $5k and could still make you a tidy sum. Here are a few them:
- The BeautyWrap: This low-cost franchise will allow you to run your very own beauty wrap salon or add BeautyWrap to your existing salon’s services. This kind of business works well on its own or as part of a bigger business offering beauty treatments. To get a BeautyWrap franchise, there is a franchise fee of $1,495. For this investment, you get access to a full online video training course that will offer you with all the knowledge needed to make a success of your franchise.
- Cruises Inc.: If you love talking about travel, then this could be the perfect low-cost franchise opportunity for you. With an initial investment of just $249, the Cruises Inc franchise is a popular choice for those with limited funds. As an independent Cruises Inc. affiliate you’ll get to keep 100% of the commission you earn selling great cruises to a plethora of fabulous people. With this franchise, you get a flexible initial training program that includes both online and on-site training as well as a six-week mentoring program to make sure you’re comfortable in your new role.
- Personal Touch: Everyone like the personal touch. Selling personalized gifts is a great way to make money as the product pretty much sells itself. With a small investment from just $229, you can get your own Personal Touch franchise. Included in the package is everything you need to get going to start make money immediately. There are no franchise fees or ongoing royalties and you get to work with a company that’s been in the business for more than 25 years.
- Senzu Jewelry: If you love all things bright and sparkly, then this may be just the franchise for you. Senzu is a Canadian jewelry manufacturer that offers a range of beautifully hand-crafted pieces. With a low-cost initial investment of just $75, you really don’t have much to lose with franchise opportunity. Included in the franchise package, you get 50% of your first sample order of jewelry, and 30% off anything after that. You also get your own business cards, invitation cards, and other marketing material to help get you going in the right direction. All shipping, payments, and gift wrapping is taken care of by Senzu, so all you have to do is sell it.
- Sparkle Grill Cleaning: If there’s one thing that Americans love, it is BBQs. So, with a Sparkle Grill Cleaning franchise, you should have no problem in cleaning up. With an initial investment of just $2,995, you get a whole heap of help to start your business off on the right foot. As part of the deal, you also get to use the brand’s email, website, appointment booker, card payment system, and telephone answering service. The company also prides itself on providing ongoing support and is happy help with any queries you may have.
There are plenty other franchise opportunities out there that will cost you less than $5k to join. A lot of it really comes down to what it is you want to do. While it’s all well and good buying into a franchise that you think will be profitable, if you have no real interest in it, your motivation to do well could soon fade. So, to be on the same side, find a franchise that’s not only affordable to you but is something that you’re happy to get your teeth into.