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  • CheapFranchise.com Staff

5 Reasons for Owning a Cheap Franchise

Updated: Jun 26, 2018

See the reasons why cheap franchises are the future and why it is perfect for you.



Five reasons low cost franchises are the future.


1. Risk – Let’s start with the obvious. The risk in starting a business for $50,000 versus $500,000 is significant. It’s more than just $450,000! Most pricier concepts require a physical location and good retail locations require personal guarantees. This means you’re committing to pay the rent on that space for the entire term of the lease. (Typically 5 or 10 years) The majority of low cost brands don’t require a store front. Which means no personal guarantee and much less risk.


2. Access to Funds – It’s hard to come up with $300,000. Most franchises encourage you to get an SBA, roll over a retirement account, or wait for an inheritance, but all of those options can take a long time and carry a lot of risk. Unless a brand offers in house financing, be prepared for a bumpy ride getting funds put together.


3. Employees – Have you walked into a restaurant lately? If you have, you’ve probably noticed the “Help Wanted” sign on the door. Finding and retaining employees is becoming increasingly difficult. Last year, restaurant employee turnover was 133%, according to research firm TDn2K. Dealing with dozens of employees is hard. Most low cost franchise concepts require only a handful of employees thus eliminating one of the top obstacles of business owners today.


4. Day to first dollar- How long it takes between signing a franchise agreement and making your first dollar should be at the top of every potential franchisee’s checklist. Low cost brands on average have a significantly shorter ramp up period, meaning people start making money faster helping to increase their chance of success.


5. The millennial business owner- Almost every brand I see is heading for a major problem within the next 10 years. Their business model does not attract millennials. Their product might attract the millennial consumer, but their business model does not. 62% of millennials want to start their own business. The average student loan debt of millennials is $30,000. They want/need a low cost opportunity.





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