Top Low-Cost Franchises

These Top Low-Cost Franchises are among the best franchises to own. The franchises that made this year’s list of Top Low-Cost Franchises have an average owner satisfaction rating of 12% higher than the industry benchmark, making them all excellent options for entrepreneurs considering franchise ownership.
Franchise Business Review surveyed over 13,000 franchisees from 135 low-cost franchise brands to identify the best low-cost franchise opportunities based on ratings and reviews from the people who know best—franchise owners.  Approximately one-third of the franchise companies we survey have initial investments starting under $100K. With financing, many can be started for as little as $15-$20K, with a few options starting under $10K. 
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Financing Options for Low-Cost Franchises

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Franchise Business Review (FBR) surveys thousands of franchise owners from hundreds of leading franchise brands to gauge franchisee satisfaction and franchise performance. Our independent franchisee satisfaction surveys ask 33 benchmark questions to measure the health of franchise systems and our top franchises lists are based exclusively on the feedback from actual franchise owners.

Not all brands willingly open their doors to an independent research firm like Franchise Business Review, but those who do can offer investors, like you, a wealth of information on the system’s leadership, culture, training and support, financial outlook and franchisee community. Rest assured, the franchises on our Top Low-Cost Franchises list are among brands that have highest franchisee satisfaction ratings – and that’s a great place to start.

If you don’t have the savings to pay for a low-cost franchise out of pocket, financing options can help. There are several financing options for low-cost franchises that you’ll want to consider:

Low-Doc SBA Business Loans: An alternative for those searching for smaller amounts of capital, these loans offer you the same benefits as SBA Loans (guaranteed by the Small Business Administration (SBA) and lent by banks) with a shorter turn-time.

401 (K) Business Financing: 401K Rollovers, also known as Rollovers for Business Start-ups (ROBS), is a method of financing that allows investors to use their retirement funds to purchase a franchise without taking a taxable distribution. Entrepreneurs can use up to 100 percent of funds from an existing retirement account to buy or start a small business or franchise without taking a taxable distribution or getting a loan.

Unsecured Loans: You don’t need collateral to qualify for these loans, which can happen in just three weeks. They are a great option if you need a fast funding solution. If you have a high credit score, banks and credit unions are good sources for unsecured loans. If your credit score is lower than the required range for banks and credit unions, consider a third-party lender.

Portfolio Loans: Security-backed loans allow you to take a loan using a financial portfolio, such as a mutual fund, as collateral. There are several potential advantages to doing so. First, you can leave your portfolio in place, which enables it to grow. Second, because the loan is backed by your portfolio’s value, the interest charged will be lower than for an unsecured loan. It is important to note that the risk of borrowing against the value of your securities is that if your investments fall in value, the money borrowed will emphasize your losses.

Family and Friends: For low-cost franchise loans, you may be able to turn to family and friends for assistance in getting started.

To help keep your startup costs low, talk to franchise companies about potential discounts or financing options they may provide. Some companies will let you finance a portion of the initial franchise fees over time and many offer special incentives to military veterans and other special groups such as first responders.

As you launch your franchise, it makes sense to save money where you can, without sacrificing any important business needs.  If your franchise doesn’t have equipment built-in to your agreement, you may want to explore leasing equipment versus purchasing it.

Click here to see the Top Low-Cost Franchises list

Includes owner satisfaction report
out of 100

Kona Ice

Industry: Food & Beverage
Investment: $149,995 - $189,300 Cash Required: $20,000
Includes owner satisfaction report
out of 100

Snap-on Tools

Industry: Automotive, Services
Investment: $201,433 - $465,436 Cash Required: $44,121
Cruise ship on water city lights
Includes owner satisfaction report
out of 100

Cruise Planners

Investment: $2,295 - $23,465 Cash Required: $10,995