Those looking to build a business may be attracted to the benefits of a franchise. In addition to offering the support and promotion of the franchise from the headquarters itself, many franchises can be purchased with startup fees that are relatively affordable.
Before you officially throw your hat into the entrepreneur ring, consider these affordable franchise options from Entrepreneur's Franchise 500 list for 2021. None of the listed companies have net worth requirements or liquid cash requirements, making it easier to get started.
1. H&R Block
A big name in tax preparation, H&R Block began in 1955 with franchise operations starting in 1956. The company reported 2,909 franchises in the U.S. and 1,550 outside of the U.S in its 2020 annual report. The initial investment for a franchise can be as low as $31,500 and as high as $149,000. The franchise comes with an initial fee of $2,500 and a royalty fee of 30%. In-house financing for equipment, inventory, and payroll is available, among support in a variety of areas, from field operations to advertising to software systems.
2. Dream Vacations
Dream Vacations is a fairly new company, with operations starting in 1991 and franchises starting in 1992. The company, as noted by its name, is in the travel business. It sells travel packages, hotels, tours, and travel-related excursions. The company has been growing consistently, with current franchises of 1,551 in the U.S. and two outside of the U.S. as of 2021. Initial investment costs are between $1,795 and $21,000. The initial franchise fee is between $495 and $10,500. The ongoing royalty fee is extremely low at 1.3% to 3%, meaning you keep most of the income earned. Dream Vacations also offers in-house financing for the franchise fee. In addition, they offer classroom training, online support, and a wealth of marketing support.
A popular name in getting fit and having fun through dance, Jazzercise has been around since 1969 and started franchising in 1982. Jazzercise has 6,443 U.S. franchises and 2,013 outside of the U.S. as of 2021. The initial investment is between $2,415 and $21,750, with an initial franchise fee of $1,250 and an ongoing royalty rate of 20%. Jazzercise offers plenty of support with on-the-job training, seminars, advertising, marketing, and more.
4. Buildingstars International
Founded in 1994, with franchises starting in 2000, Buildingstars International is a commercial cleaning company. The company offers a variety of cleaning services that include carpet and floor care, nightly building cleaning, as well as a focus on the environment with green cleaning and consulting. The company requires a low initial investment, starting at $2,245 and going up to $53,200. As of 2020, the total number of franchises was 899. The franchise comes with an initial fee between $995 and $46,995 but offers in-house financing to cover the fee as well as startup costs and equipment. Buildingstars provides on-the-job training, classroom training, site selection, amongst other support functions.
5. Cruise Planners
Cruise Planners is an American Express Travel Services Representative. They offer travel agent services through a home network that provides customers with vacation packages that include cruises, car rentals, and on-land travel options. The company was founded in 1994 and started franchising in 1999 and had 3,150 franchises as of 2020. The initial investment ranges between $2,295 and $23,665. Initial fees are between $695 and $10,995, and the company has a very low royalty fee that is between 1% to 3%. Cruise Planners offers in-house financing to cover the franchise fee as well as a 28% discount for veterans. The company provides 49 hours of classroom training, which is a nice addition when getting started.
6. Leadership Management International
Leadership Management International was founded in 1966 with franchise operations starting the same year. It was founded by Paul J. Meyer to grow the leadership skills of employees and to create a program to help companies do so. The company offers many different courses that allow employees to grow as professionals. The different programs and courses are offered in 28 languages and are available in more than 70 countries. There are 118 U.S. franchises and 344 franchises outside of the U.S. Initial investment costs for the franchise are between $20,000 and $27,500 with an initial franchise fee of $15,000 and a low royalty fee of 6%. The franchise fee can be financed through in-house financing options while third-party financing is available to cover startup costs, inventory, and accounts receivables and payables.
The Bottom Line
There's more to choosing a franchise opportunity than just the startup costs. Initial investment price, however, is one of the most looked-at factors for investors - especially those first-time business owners. Considering a value-priced franchise leaves more money for improvements over time and could help owners get through a rough patch, should the market downturn.