investing in a franchise

How to Start Investing in a Franchise on a Budget


Investing in a franchise on a budget is easily possible if you follow the right steps by an expert. Let’s help you out!

investing in a franchise

Investing in a franchise takes time, effort, a good amount of investment, and the right strategy. You might have looked up several ways to start franchising but found it costly, but let me break it up for you on a budget. 

Here’s how to invest in the least expensive franchises to start: 

  • set your budget and explore financing 
  • target budget-friendly franchises
  • understand franchise fees
  • maximize efficiency
  • build your support network
  • seek help from a franchising guide

Running a franchise business is not a walk in the park, but there’s a potential to boost your financial situation with the right guidance. 

In this article, not only will I expand on the aforementioned steps to start franchising on a low budget, but will also provide you with some options that you can explore and get going!

So, are you in for a value-packed guide to create a thriving business? 

Your Blueprint to Start Investing in a Franchise on a Budget

investing in a franchise
  1. Know Your Numbers & Set a Realistic Budget 

If you think owning a business requires a mountain of cash, franchising is a surprising alternative. However, you should be realistic at setting your budget when investing in a franchise. 

Let’s face it. Where there are franchises with significant investments, there still are opportunities available for aspiring entrepreneurs (like yourself) on a budget. 

Did you know? 

According to CNBC, the IFA says the average initial investment for a franchise business is around $250,000, with many falling well below that range. In fact, there are industries that let you start a franchise with $15,000 or even less in cash!

So, ditch the misconception, set your budget, and explore the exciting world of franchise ownership.

Make sure you are honest with yourself about your savings (investment amount). You can also explore financing options like SBA loans or personal loans (with responsible repayment plans!). 

Quick cue: Do consider royalty fees and remarketing expenses while you do your research!

  1. Target Budget-Friendly Franchises  Beyond the Big Brands

The franchising world is diverse. Don’t get hung up on the big-name brands – there are fantastic low-cost franchise opportunities waiting to be discovered yet!

Here are some quick tips to target low-cost franchising options: 

  • Look for businesses with proven success rates that cater to specific niches or operate from home-based or mobile models. These models often require less upfront investment and overhead costs, making them ideal for an investment on budget. 
  • Research is key – explore franchise directories and attend industry events to find the perfect fit for your skills and financial goals.
  • Consider low-cost options. Industries like janitorial cleaning, mobile businesses, and home-based services often require a lower investment.

Some budget-friendly franchise options: 

  • Janitorial Services
  • Pet Sitting
  • Mobile Businesses (Car Washing, etc.)
  • Lawn Care
  • Business Consulting

Keep in mind that franchising provides a proven model.  By targeting budget-friendly franchising options and planning carefully, you can actually achieve your dream of business ownership!

  1. Decode the Franchise Fees: Friend or Foe?

When investing in a franchise, remember to consider franchising fees as well in your budget. I know it might come off as daunting at first glance, but understanding its breakdown helps you make informed decisions. 

Franchise fees usually include an initial franchise fee that covers access to the brand and operating system, ongoing royalties (a percentage of your sales), and marketing fees (contributing to brand-wide advertising). 

The good news? Many franchises offer incentives for veterans.

Additionally, explore financing options specifically designed for franchise startup costs. Remember, these fees are investments in your business’s success and using them strategically to maximize your return helps you in the long run.

  1. Adopt Efficiency & Minimise Your Costs for Maximum Profit

Running a smooth and efficient business process is important for any franchise, especially when you’re on a budget. And that’s where your creativity comes in!

I’d just suggest exploring cost-saving in staffing by offering competitive wages. Plus, to avoid further costs, you should leverage technology for scheduling and payroll. 

Furthermore, negotiate bulk discounts with suppliers for your inventory. Talking about marketing, make sure you’re utilising free or low-cost strategies. For example, go for social media and community engagement instead of physical marketing ways (that’s old anyway). 

Lastly and most importantly, take the needed support from your franchisor! Since they offer you their brand name, they also provide you with resources, training programs, and best practices to help you streamline your business process. So, make use of these benefits and maximize your profitability. 

Remember, by becoming an efficiency expert, you can turn your limited budget into a significant advantage.

  1. Make Your Support Network

Franchising Fact 101: Franchising on a budget doesn’t mean doing it all alone. 

Building a strong support network for your business is necessary for running the entire process. It also increases the likelihood of achieving success in your business.

Here’s how you can take support from your network:

  • Connect with existing franchisees: You get the chance to talk to franchisees within the systems you’re considering. These franchises offer invaluable insights into the day-to-day processes of your business, costs, and challenging aspects specific to that franchise.
  • Seek advice from experienced entrepreneurs: In your support group, you can talk to successful business owners, not necessarily in franchising. But they can provide valuable advice on budgeting, financing, and steering the overall business landscape.
  • Tap into professional resources: When you have a support group, you can approach a small business development center (SBDC) or SCORE mentor for direction and support. These organizations usually offer free or low-cost consultations. Plus, they also provide you with resources specifically tailored to aspiring entrepreneurs like yourself.
  1. Seek Help from a Franchising Guide

A franchising guide is a valuable asset, especially if you’re new to the entire franchising process. Here’s how a guide can help you on a budget:

  • Matching you with budget-friendly options: A franchising guide can identify franchises with lower initial investments for you. He can also specify ongoing fees that go well with your financial limitations, cutting all the nuisances you might have due to a low budget. 
  • Negotiation assistance: An experienced franchise guide can help you negotiate franchise fees and terms with your franchisor. And it will definitely save you money upfront.
  • Access to a wider network: It won’t be wrong to say that a franchising guide may have good relationships with lenders or investors who understand the franchise landscape willing to finance your venture. So, that’s a plus too!

Remember: Avoid those guides that pressure you towards specific franchises or have hidden fees. You can consider me (GG The Franchise Guide) for a FREE consultation & franchise matching services.

Insider Tips to Succeed While Investing in a Franchise on a Budget

investing in a franchise

The following are some tips to take in account while you start investing in a franchise on a limited budget: 

  • Master the Art of DIY: Identify tasks you can handle yourself initially. For instance,  social media management, basic bookkeeping, or website maintenance. You can outsource these as your business grows.
  • Negotiate Existing Expenses: Renegotiate phone, internet, and office supply contracts to cut extra fees. Franchises often qualify for bulk discounts, so you can leverage that buying power as well. 
  • Think “Pre-Loved” for Equipment: There’s nothing wrong with going for pre-loved equipment instead of brand new when you’re starting out. Take help from reputable franchise brokers as they might have reliable sources.

You also need to learn negotiating like a pro! 

Don’t know how to do so? 

Here’s how to negotiate like a pro and secure your franchise dream:

  • Become a Market Expert: Do some research on your target market and understand your competitors’ pricing. Doing this will help strengthen your negotiation position with the franchisor.
  • Focus on Value, Not Just Price: While cost/investment to start a business matters, your skills and experience add value to the franchise. Utilise them!
  • Consider Non-Monetary Alternatives: In some cases, you can go for proposing alternative benefits to your employees such as extended marketing support or training in exchange for lower fees.

The Bottom Line

Although franchises offer a captivating path to business ownership, budget concerns might hold you back. 

However, by going for resourceful ways and strategic planning, you can definitely turn your franchise dream into reality without having to invest a lot. 

I have created this blog to help you learn how to bootstrap your franchise journey by making use of clever tips and tricks like DIY processes and pre-owned equipment. I also emphasised the importance of negotiation and told you ways to become a market expert by proposing alternative benefits. 

Having shared all the tides and bits, I hope you now know how to start investing in a franchise on a budget. Remember, franchising on a budget requires dedication, and using the right approach, you can become your own boss and grow a successful franchise business. 

Make sure you don’t forget to utilize the support network available, including free resources and consultations with the franchise guide. With a calculated approach and a little bit of hustle, you can be well on your way to franchise ownership without breaking the bank. 

Having said that, if you still have questions or concerns about investing in a franchise on a budget, you can book a FREE call with me and let’s get you started!

Bonus Section

Is Franchising Possible With Limited Funds?

Absolutely! Although some franchises do require big investments, most of them cater to budget-conscious owners like yourself. Make sure you’re exploring the low-cost franchise options in the right market. And yes, don’t forget to implement financing strategies and negotiating terms to make it work.

Bootstrapping Strategies for New Franchisees

The following are some strategies that might help you as you begin the venture: 

  • Go DIY. Tasks like social media management or bookkeeping can be easily done by yourself initially. So, go for it!
  • Negotiate existing utility contracts for bulk discounts. 
  • Consider buying gently-used (second-hand) equipment to avoid extra costs!

Giuseppe Grammatico is a franchise veteran, coach, author, speaker & consultant who simplifies the process of franchising and excels at guiding his candidates to the business model that best suits their desired lifestyle.

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