We all like to save money and get the best deal and even more so at this current time when many people are being more careful about what they spend. With this in mind its natural when considering a franchise business investment, to want to get the best deal, look for the cheapest way and avoid regretting the amount invested at a later date.
So then, what are the cheapest franchises to open? Well to work out which are the cheapest you will need to work out how much a franchise will cost you to start up. The start up cost of a franchise is affected primarily by two factors:-
The franchise fee is comparable to a license fee that you pay to the franchisor. In return, the franchisor will provide you with the right to trade under its brand name, the right to use its proven franchise business formula and initial training on how the franchise should be run. Depending on the business type, it may also include some initial start up stock or equipment to help you start off your business. You can usually find out what you might expect to be included in the franchise fee from franchise information provided.
The franchise fee is usually very apparent from any information the franchisor publishes about its franchise opportunity. This might be from a listing on a franchise business directory website or from a brochure you obtain directly from the franchisor. Franchises fees vary considerably from as little as a few thousand to hundreds of thousands of pounds.
Whatever franchise business you choose, you will undoubtedly have additional costs to consider. These will be determined by the type of franchise opportunities you choose. For instance, a home based franchise will not usually require any commercial premises rental or lease whereas a retail or restaurant type franchise will carry the extra expense of retail or shop space to operate from. You will need to consider other expenses such as investment in office furniture & equipment, telephone lines, business stationary, initial stock, etc.
Once you have the above figures you can add them together and get a real idea of how much it would cost to start a franchise. A franchise that has a low franchisee fee but requires commercial premises to operate from will likely end up being more expensive than a franchise which has a higher franchisee fee but can be operated from home for example.
So when considering what is the cheapest franchise to open, make sure you take both the factors above into account.
There is a further consideration and that is of earning potential. While it might make sense to go for the cheapest possible option remember that the business model of any specific franchise might have a maximum expected earnings potential (this might be market size, workforce operating limits, etc). This may be something you wish to consider, as paying a little more at the outset could provide much more in return over the years that follow if the earnings potential of the franchise is higher than going for an initially cheaper option.