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 types of franchises can be purchased with startup fees that are affordable in the realm of ordinary people.
Before you officially throw your hat into the entrepreneur ring, consider these affordable franchise options from Entrepreneur's Franchise 500 list for 2020. None of the listed companies have net worth requirements or liquid cash requirements, making it easier to get started. (For related reading, see: Is Buying a Franchise Wise?)
1. H&R Block
A big name in tax preparation, H&R Block began in 1955 with franchise operations starting in 1956. The company currently has 3,136 franchises in the U.S. and 741 outside of the U.S. The initial investment for a franchise can be as low as $32,000 and as high as $149,000. The franchise comes with an initial fee of $2,500 and a higher than usual 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 and tours, and travel-related excursions. The company has been growing consistently, with current franchises of 1,429 in the U.S. and three outside of the U.S. Initial investment costs are between $1,795 and $20,300. The initial franchise fee is between $495 and $9,800. 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 and a special 20% discount on the franchise fee for veterans. 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 6,585 U.S. franchises and 1,975 outside of the U.S. The initial investment is between $2,405 and $17,155, 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 has a low initial investment, starting at $2,245 and going up to $53,200. As of 2020, total franchises are at 725. 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 currently has 3,061 franchises. The initial investment ranges between $2,295 and $23,617. Ongoing 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 for 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 27 languages and are available in more than 80 countries. There are 112 U.S. franchises and 346 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. (For related reading, see: Share the Wealth With Franchises.)