The 42 Best Franchise Opportunities to Buy & Own in 2022

Best Franchises to Buy. McDonald's; 7-Eleven; Dunkin'; The UPS Store; Popeyes; Sonic Drive-In; Great Clips; Taco Bell ... Sales|22minread The42BestFranchiseOpportunitiestoBuy&Ownin2022 WrittenbyMeredithHart @meredithlhart Usethisfreebusinessplantemplatetodevelopyourfranchisebusiness.DownloadFreeBusinessPlan Oneofthebestwaystostartanewbusinessisbycapitalizingonafranchiseopportunity.Notonlydofranchiseopportunitiescomewithpremademarketingcollateralandhighbrandawareness,butyougetextensivebusinesssupportfromthefranchiser. Let’stakealookatthedefinitionofafranchise,thebasiccriteriaforevaluatinganopportunity,andthebestfranchisestoownthisyear. We'llcover: Whatisafranchise? HowtoEvaluateaFranchiseOpportunity BestFranchisestoBuy Low-Cost/CheapFranchises BestFranchisestoOpenandOwn MostProfitableFranchises Whyownafranchise? HowtoAffordYourFranchise Let'sgetstarted. Whatisafranchise? Afranchiseisabusinessinwhichindependententrepreneursusetherightstoalargercompany’sbusinessname,logo,andproductstooperateanindividuallocation.Thefranchiseristheownerofthelargercompanywhosellstherightstolicensetheirbusiness,andthefranchiseeisthethird-partyownerandoperatorofthebusinesslocations. Whenwasthelasttimeyoumadeafastfoodstoporpurchasedacupofcoffeebeforework?Ifthebrandisrecognizableandhasmultiplelocationsthroughoutyourcityortown,likeMcDonald'sorDunkin',it'squitepossibleyourfavoritefoodjointisafranchise. Infact,theUSCensusreportsthat11.4%ofallbusinessesintheUSarefranchises.Whilerestaurantsmakeupthebulkoffranchiseopportunities,gasandconveniencestores,cardealerships,fitness,realestate,andhospitalitysectorsalsomakeupasizablechunk. Butwhichfranchisesarebestsuitedforyourbudgetandskillset?Let’stakealookathowyoucanevaluateafranchisingopportunity. HowtoEvaluateaFranchiseOpportunity Nofranchiseisone-size-fits-all.Entrepreneurswhowanttoopenafranchisemusttakeintoaccounttheirbudgetaryconstraintsandthefranchiser’ssupportsystemduringtheevaluationphase. Hereareafewcriteriathatyoushouldconsider. FranchiseFeesandSet-UpCosts Everyfranchisorrequiresanupfrontfee.Thiscanrangefromhundredstohundredsofthousandsofdollars. Preferably,thefranchisefeewouldbepaidout-of-pocket(thoughsomefranchisersofferfinancingoptions).Eitherway,werecommendhavingatleast$10,000toinvestup-front. Profitability Whenyou'reevaluatingabusinessinvestment,it'simportanttoknowiftheopportunityisworththemoney. Determiningtheprofitabilityofafranchiseisn'tanexactscience,butthereareafewfactorstoconsider,includingtheunitgrowth,newfranchiseesuccessrate,andthefranchiser'sfinancialstatements. SupportSystemsforFranchisees Whenselectingafranchiser,takealookatthesupportsystemsthey’veputinplacetoensuretheirnewlocationisasuccess. 7Eleven,forexample,fliesacceptedfranchiseestotheirsupportcenterinDallasfortraining.Theyalsohavearesourcecenterwithseminarsandevents.Notallfranchisers,especiallysmallones,willhaveextensiveresourceslike7Eleven,butmakesuretheyofferbasictraining. TimeCommitment Operatingafranchisewillbeadecades-longcommitment,ideallylonger—youcan’toperateastoreandleaveafterayear.ThefranchisetermforMcDonald’s,forexample,is20years. Besurethatyou’repreparedtostickaroundforawhilewithoutpursuingothertime-consumingcommitments(suchasanadditionalcareer).Ifyoufeelthatyou’llwanttoleaveinlessthantenyears,besuretochooseabrandwhosefranchisesareeasiertosell. AvailableTerritories Most,ifnotall,franchisersarelookingtogrowinaparticulargeographicalarea.Itwouldn’tbeprofitable,forexample,toopenanewlocationjustmilesfromanother,orinanareawherethere’snodemand. Besuretocheckwhetheryourtargetfranchiserwantstoopenalocationinyourarea.Ifnot,decidewhetheryou’rewillingtorelocate. BrandRecognitionorGrowth Howrecognizableisthebrandthatyou’llbefranchising?Ifit’sasmallerbrand,hasitseensignificantgrowthinthepastyear? Thesetwocharacteristicswilldeterminewhetheritwillbeprofitabletooperateafranchiseforaprospectivebrand.Sometimes,goingforabig,highlyrecognizablebrandisn’tideal,becauseup-frontcostsaresignificant. Asmallerfranchisercouldbeaneasierentrypoint—solongasthecompanyhasbeengrowinginrevenue. Nowthatyouknowhowtoevaluateanopportunity,let’stakealookatourlistofthebestfranchiseopportunitiestoselectfrom.Throughoutthepandemic,thesefranchisershaveeitherseengrowthorverylittlestagnation,makingthemthebestfranchisestoown. BestFranchisestoBuy McDonald's 7-Eleven Dunkin' TheUPSStore Popeyes SonicDrive-In GreatClips TacoBell KumonMath&ReadingCenters SportClips AnytimeFitness AceHardware Let'stakealookatsomeofthesefranchisesandseehowtheystackup.I'llreviewwhateachfranchiserequiresintermsofthefranchisefeeandtheinitialinvestmentyou'llneedtomake. Afranchisefeeisacostapotentialfranchiseepaysupfronttooperatethefranchise.Andtheinitialinvestmentamountincludesexpensessuchasroyaltyfees,realestate,andinventorycosts. Let'stakealookatsomeofthesefranchisesandseehowtheystackup.I'llreviewwhateachfranchiserequiresintermsofthefranchisefeeandtheinitialinvestmentyou'llneedtomake. Eachopportunitywillhavethefollowinginformation: Category:Thisisthebusinessorindustrycategoryforthefranchise. Franchisefee:Afranchisefeeisacostapotentialfranchiseepaysup-fronttooperatethefranchise. Initialinvestment:Theinitialinvestmentamountincludesexpensessuchasroyaltyfees,realestate,andinventorycosts. Financingavailable:Thiswilltellyouwhetherfinancingisavailableforinitialinvestments. Franchisedetails:Thisisalinkthatwillleadtothefranchisingpageforthebusiness. FeaturedResource FranchiseBusinessPlanTemplate Fillouttheformtoaccessabusinessplantemplateforyourfranchise. 1.McDonald's Category:Fast-FoodFranchise Franchisefee:$45,000 Initialinvestment:$1,008,000to$2,214,080 Liquidcashrequirement:$500,000minimum Royaltyfee:4-5% Financingavailable:Yes,throughthird-partylenders Franchisedetails:McDonald's Ifyouwantgoldenarchesofyourown,you'llneedtoputinaheftyinitialinvestment.Butwiththatinvestment,yougetbrandrecognition,popularity,andyearsofexperienceinthefast-foodindustry. 2.7-Eleven Category:RetailFranchise Franchisefee:$10,000to$1,000,000 Initialinvestment:$37,550to$1,149,900 Liquidcashrequirement:$50,000-$150,000 Royaltyfee:Varies Financingavailable:Yes,through7-Eleven’sinternalprogram Franchisedetails:7-Eleven Asthe#1conveniencestore,7-Elevenisseeingunprecedentedgrowth.Itsstoresareturnkeyandyoucangetstartedwithinthreetosixmonths,includingapplication,testing,andtraining. 3.Dunkin' Category:Food&DrinkFranchise Franchisefee:$40,000to$90,000 Initialinvestment:$109,700to$1,637,700 Liquidcashrequirement:$125,000to$250,000 Royaltyfee:5% Financingavailable:Yes,throughthird-partylenders Franchisedetails:Dunkin' Dunkin'droppedthe"Donuts"fromitsname,butthisbusinessisasrecognizableaseverwithlocationsin32countries.Itwasrated#1incustomerloyaltybyBrandKeys’CustomerLoyaltyEngagementIndex.Andtheysupporttheirfranchiseeswithtrainingandassistancewithsiteselection,construction,operations,management,andmarketing. 4.TheUPSStore Category:PrintingandPackingFranchise Franchisefee:$29,950 Initialinvestment:$138,433to$460,031 Liquidcashrequirement:$75,000minimum Royaltyfee:5% Financingavailable:Yes,throughGuidantFinancial Franchisedetails:TheUPSStore TheUPSStoreisthetop-rankedfranchiseinthebusinessservicesindustry.Itboastsfinancialstability,brandrecognition,anddedicatedtrainingandsupport—and84%oftheU.S.populationliveswithin10milesofaUPSStore. 5.Popeyes Category:Fast-FoodFranchise Franchisefee:$50,000 Initialinvestment:$383,500and$2,620,800 Liquidcashrequirement:$500,000minimum Royaltyfee:5% Financingavailable:No Franchisedetails:Popeyes PopeyesisconsistentlyoneofthetopfranchisestoowninEntrepreneur'sFranchise500Rankings.It'sawell-knownfast-foodbrandwithaglobalpresence,strongadvertisingstrategies,andwell-developedcorephilosophies. 6.SonicDrive-In Category:Fast-FoodFranchise Franchisefee:$45,000 Initialinvestment:$1,240,000to$3,540,000 Liquidcashrequirement:$500,000minimum Royaltyfee:2.5-5% Financingavailable:No Franchisedetails:SonicDrive-In Thisdrive-inchainpridesitselfonitsoperationalexcellenceandcustomerservice.Thisbrandkeepsgrowing—itsfranchiseownerssaw$1,341,000inaveragegrosssales. 7.GreatClips Category:HairSalonFranchise Franchisefee:$20,000 Initialinvestment:$136,900to$259,400 Liquidcashrequirement:$50,000minimum Royaltyfee:6% Financingavailable:Yes,throughthird-partylenders Franchisedetails:GreatClips GreatClipshasbeeninbusinessfor30yearsandprovidesitsfranchiseownerswithup-to-datetechnologyandtraining.Ithasinvestedheavilyinmarketresearchtoprovidecustomerswiththebestserviceandexperience. 8.TacoBell Category:Fast-FoodFranchise Franchisefee:$25,000to$45,000 Initialinvestment:$525,100to$2,622,400 Liquidcashrequirement:$750,000minimum Royaltyfee:5.5% Financingavailable:Yes,throughthird-partylenders Franchisedetails:TacoBell Thisquick-servicerestaurantbrandhasbeenaroundfor50yearsandhasdevelopedfinancialstabilityandbrandrecognition.Ithasaprovenoperatingsystemandgivesyouaccesstorestaurantresourcesandacommunityofmorethan350franchiseeswhoknowthebusiness. 9.KumonMath&ReadingCenters Category:Children’sEducationFranchise Franchisefee:$1,000 Initialinvestment:$74,428-$156,590 Liquidcashrequirement:$70,000minimum Royaltyfee:Varies Financingavailable:No,butKumonwillcoverupto$36,000ofyourbusinessexpenses Franchisedetails:Kumon Kumonisrankedconsistentlyinthetop10ofEntrepreneur’sFranchise500list.Thisisanidealfranchisetobuybecauseofitslowfeeandpotentialforhighprofitabilityinatimeofremotelearning. 10.SportClips Category:HairSalonFranchise Franchisefee:$59,500 Initialinvestment:$224,800to$373,300 Liquidcashrequirement:$200,000minimum Royaltyfee:6% Financingavailable:Yes,throughthird-partylenders Franchisedetails:SportClips SportClipsisgrowingandshowingitsstrengthandstability—ithasahighcontinuityrateof95.4%overthepastfiveyears.Thismeansthatoutofallthestoresthatopenedthroughoutthelastfiveyears,morethan95.4%ofthemareopentoday.Itattributesthisstabilitytorelativelylowstartupcosts,solidsupportsystems,andcontinualmonitoringofstoreperformance. 11.AnytimeFitness Category:Gym Franchisefee:$35,000 Initialinvestment:$105,000to$720,000 Liquidcashrequirement:$100,000minimum Royaltyfee:$549permonth Financingavailable:Yes,throughthird-partylenders Franchisedetails:AnytimeFitness AnytimeFitnessisoneofthestrongestperformingfitnessfranchisesouttheretoday.Withover4millionmembersworldwide,AnytimeFitness'brandrecognitionishigh,butoperatingcostsarelow. 12.AceHardware Category:Homeimprovement Franchisefee:$5,000 Initialinvestment:$280,000to$2,000,000 Liquidcashrequirement:$250,000 Financingavailable:Yes Franchisedetails:MyAce AceHardwareexudesalocalfeel,whichstarklycontraststhebig-boxhomeimprovementstoreslikeHomeDepotandLowe's.Thisfranchisepridesitselfonstellarcustomerserviceandstore-brandproducts. Low-Cost/CheapFranchises Theinitialinvestmentinafranchisecanbepricey,andrangeanywherefromafewthousanddollarstooveramillion.Ifyou'relookingtopurchaseafranchiseatalowerpricepoint,thereareoptionsforyouinavarietyofindustries. 1.CruisePlanners Category:TravelFranchise Franchisefee:$6,995 Initialinvestment:$2,095to$22,867 Liquidcashrequirement:$11,000 Royaltyfee:1.5-3% Financingavailable:Yes,throughthird-partylenders Franchisedetails:CruisePlanners CruisePlannersisacruiseplanningagency.It'shome-based,soyoudon'tneedtofactorinthecostofrealestate.Priorexperienceintravelplanningisnotrequired,andthecompanyofferscomprehensivetraining. 2.SuperGlassWindshieldRepair Category:VehicleMaintenanceFranchise Franchisefee:$9,500to$28,500 Initialinvestment:$9,910to$31,000 Liquidcashrequirement:$15,000 Royaltyfee:4% Financingavailable:No Franchisedetails:SuperGlassWindshieldRepair SuperGlassWindshieldRepairhasbeenoperatingfor30yearsandspecializesintherepairofrockdamagedandcrackedwindshields.Overheadcostscanbekeptlowduetoitsmobileoption—aphysicalshoplocationisnotrequired.Italsooffersclassroomandon-the-jobtraining, 3.JAN-PRO Category:CleaningandMaintenanceFranchise Franchisefee:$2,520to$44,000 Initialinvestment:$3,985to$51,605 Liquidcashrequirement:$150,000 Royaltyfee:10% Financingavailable:Yes Franchisedetails:JAN-PRO JAN-PROisacommercialcleaningfranchisewhoseclienteleisotherbusinesses.Theyofferthreeoptionsforfranchising:internationalmasterfranchise,executivebusiness,andhome-basedopportunities. 4.Jazzercise Category:GroupFitnessFranchise Franchisefee:$1,250 Initialinvestment:$2,500to$38,000 Liquidcashrequirement:$2,900 Royaltyfee:Varies Financingavailable:No Franchisedetails:Jazzercise Ifyou'relookingtostartalow-investment,exercisebusiness,aJazzercisefranchisemightbeagoodfitforyou.Itoffersvariouspricepointstobeginafranchiseandyoucanfindtheonethatalignswithyourbudget. 5.DreamVacations Category:TravelFranchise Franchisefee:$495to$9,800 Initialinvestment:$3,245to$21,850 Liquidcashrequirement:$9,800 Royaltyfee:1.5-3% Financingavailable:Yes,throughtheirinternalfinancingsystem Franchisedetails:DreamVacations DreamVacationsisahome-basedtravelagencyfranchisewithnooverheadorinventory—thiskeepsthecostofinitialinvestmentlow.It'sagreatoptionformilitaryveteransandoffersdiscountedinvestmentprices. BestFranchisestoOpenandOwn Freddy'sFrozenCustardandSteakburgers Culver'sButterburgersandFrozenCustard PlanetFitness ClubPilates NothingBundtCakes PureBarre uBreakiFix SoccerShots Mathnasium KonaIce Somecompanieshaveseenunprecedentedgrowthorareparticularlydriventogrow.They’reactivelylookingfornewopportunitiesbecausethey’restillintheinitialstagesofexpandingtheirreach. Theseareprimeopportunitiesforprospectivefranchisees.Youcantakeadvantageofagrowingnameinthebusinesswhilebeingthereasonthenamegrowsandbecomesmoreauthoritative. Belowareourtoppicksforthebest-growingfranchisestobuy.Inthislist,we’lltakealookattheinitialinvestment,thefranchise'sgrowthrateoverthepastthreeyears,andthenumberoffranchiselocations,orfranchiseunits. 1.Freddy'sFrozenCustardandSteakburgers Initialinvestment:$640,552-$2,077,046 Three-yeargrowthrate:44.6% Totalfranchiseunits:386 Thisfast-casualrestaurantisknownforitsburgersandfreshly-churnedcustard.Afteryourinitialinvestment,youcanexpectyourrestauranttoopenineightto18months,dependingonlocationandwhetheryou'rebuyingorleasingproperty. 2.Culver'sButterburgersandFrozenCustard Initialinvestment:$2,349,000-$5,356,000 Three-yeargrowthrate:21.2% Totalfranchiseunits:765 Foundedin1984,Culver'shasbeenawell-recognizednameintheburgerandcustardbusiness.It'satopfranchiseandoffersanestablishedoperatingsystemwithover35yearsofexperience. 3.PlanetFitness Initialinvestment:$968,100-$4,113,000 Three-yeargrowthrate:45.9% Totalfranchiseunits:2,059 PlanetFitnessisknownforitsJudgmentFreeZone®philosophy—makingfirst-timegymusersfeelcomfortableastheybegintheirfitnessjourneys.Thisgymhasover14millionmembersandfranchiseeshaveamedianannualoperatingincomeof$567,000. 4.ClubPilates Initialinvestment:$178,000-$365,200 Three-yeargrowthrate:192.6% Totalfranchiseunits:597 ClubPilatesisoneofthetoppilatesfranchisesintheUnitedStates.Foundedin2007,thisgroupfitnessfranchisecarriesoutupto8millionpilatesworkoutsayear. 5.NothingBundtCakes Initialinvestment:$430,200-$624,300 Three-yeargrowthrate:60.6% Totalfranchiseunits:355 Thisbakeryisuniquebecause,despitebeingafranchise,ithasa"MomandPopshop"feel.TherearelocationsacrosstheUnitedStates,anditscakeshavebeenfeaturedinpopularmediaoutletslikeFoodandWineMagazine,FoodNetwork"Unwrapped",andFranchiseTimes. 6.PureBarre Initialinvestment:$204,100-$461,700 Three-yeargrowthrate:20.6% Totalfranchiseunits:563 PureBarreisapopular,boutiquefitnessbrandwithnearly600,000clients.Thebusinessoffersmultiplerevenuestreams:barclassesandactivewear.Anditprovidessupportandtrainingforrealestate,operations,consulting,marketing,andmore. 7.uBreakiFix Initialinvestment:$98,350-$303,000 Three-yeargrowthrate:14.8% Totalfranchiseunits:585 uBreakiFixspecializesinrepairsofalltypesofelectronics—fromcomputerstoTVstogamingconsoles.Theriseofremoteworkandin-homeentertainmentmakesthisagreatcontenderforthisyear. 8.SoccerShots Initialinvestment:$41,034-$55,100 Three-yeargrowthrate:26.7% Totalfranchiseunits:242 SoccerShotsisachildren'ssoccerprogramwithafocusoncharacterdevelopment.Ithasalowoverheadcost,supportsitsfranchisees,andhaswell-establishedrelationshipswithnationalbrandslikeAdidasandtheU.S.SoccerFoundation. 9.Mathnasium Initialinvestment:$112,750-$149,110 Three-yeargrowthrate:26.1% Totalfranchiseunits:1,074 Thismathlearningcenteropenedin2002,anditsmissionisto"helpeverychildunderstand—andmaster—math."Mathnasiumhasearnedmanyaccolades,andoverthepastfouryears,itsaverage-per-unitgrosssalesgrew10%annually. 10.KonaIce Initialinvestment:$145,600-$169,200 Three-yeargrowthrate:43.7% Totalfranchiseunits:1,305 KonaIce,asellerofshavedice,offersthebenefitofhavingrelativelylowinitialcostswhilestillhavingsolidbrandrecognition.Eachfranchiseisoperatedoutofatruck,meaningthatyouwon’tspendmoneyonlandorrealestate.Thebestpart?YoucanopenaKonaIcelocationinlessthantwomonths. Next,wecuratethemostprofitablefranchisesoverall—takenfrombothourlistandlistsaroundtheweb. MostProfitableFranchises Dunkin' 7-Eleven PlanetFitness JAN-PRO TacoBell OrangetheoryFitness GreatClips MacTools CruisePlanners Jazzercise McDonald's Mathnasium JimmyJohn'sGourmetSandwiches PapaJohn's AnytimeFitness Thefranchiseslistedaboveareseeingthelargestgrowthinfranchiselocationsoverthepastyear,whichisoneofthekeyindicatorsofprofitability. Feelingoverwhelmed?Notsurehowtogetstarted?Readourguideonhowtobecomeanentrepreneurtogetthebasicsdownbeforepurchasingafranchise. Whyownafranchise? Owningafranchisehascountlessbenefits.Youcanprofitfromthefranchiser’srecognizablebrandwhileessentiallyrunningyourownoperation.Themostprofitablefranchisesrarelyfail,removingtheriskstypicallyassociatedwithopeningabrand-newbusiness. Let’sdiveintothebenefitsyou’llenjoyafterinvestinginafranchiseopportunity. 1.Franchisesarealreadywell-knownintheirmarket. Oneofthebiggestchallengesoflaunchingastartupiscreatingenoughbrandawarenesstoattractandconvertcustomers. Becausemostfranchiseshavebeenoperatingforafewyearsatminimum,they’vegeneratedenoughawarenessforyourfirstcustomertowalkinwithindaysofopeningyourdoors.Thebrandcanberecognizedimmediately. Ifit’snot,thenpotentialcustomersneedonlylookupthenameofyourbusiness,andallthelocationswillshowup.Thisdemonstratestopotentialbuyersthatthebrandisprovenandreputable.Thinkaboutit:Wouldyougotoanunknownshoporashopthathasmultiplelocations?Likelythelatter. 2.Youseegreaterprofitsasafranchiseowner. Becausefranchisershavealreadyestablishedmultiplebusinessesandhavegeneratedbrandawareness,youwillhaveagreaterpotentialforprofitsthanifyouweretooperateanindependentbusiness. Thatdoescomeatapremiumcost,suchasfranchisefeesandongoingroyaltiespaidouttothefranchisers.However,youwillseeahighreturn-on-investmentoncenewcustomersbeginwalkinginalmostimmediatelyafteropeningthelocation. 3.Yougetthetrainingyouneedtooperatethefranchise. Don’thaveindustry-specificexperience?Goodnews:Youdon’tneedany.Yousimplyneedtobeavailableforthecompany’strainingscheduletolearnhowtooperateyourbrand-newfranchiselocation. Franchisersdon’texpectyoutohavespecificexperienceinthefield.Forinstance,ifyou’reconsideringopeningaKumonlocation,Kumonwon’trequireyoutohaveaMasterofArtsinteaching.Allyouneedistobeproficientinmathandreadingandbewillingtoworkwithchildren. 4.Youwillreceivein-personsupportandassistance. Mostfranchisershavefieldrepresentativesthatvisitindependently-ownedlocationstoensureoperationsareprogressingsmoothly.Evenifthefranchiserdoesn’tofferanin-personvisit,youwillhaveastrongsupportgroupfromyourfellowfranchisees.Youcangotonetworkingevents(orcreateyourown)tofindnewwaystomarketyourlocation,hiremorehelp,andattractmorecustomers. 5.Franchisesofferlowerrisks. Allofthesebenefitsconspiretomakefranchiseslower-riskbusinessventures.Sure,there’salwaysapotentialforyourfranchiselocationtofail,butthisriskismuch,muchsmallercomparedtotheriskyoufacewhenopeningyourownbusiness. Ifthingsgoawry,youcansellthefranchiselocationtoanotherperson.Afterall,thebrandnameisstillvaluable.Justbecauseyoucan’taffordtooperatethatlocationdoesn’tmeananotherpersoncan’t. FranchiseDrawbacks 1.Franchisescanhavehighupfrontcosts. Initialinvestmentcostsinafranchisecanbepricey,especiallyifyouarebuyingawell-knownprofitablebusinesslikeDunkin’orMcDonalds.Forsmallerfranchises,you’llstillhavetoshelloutthousandsupfront. Whilebuyingintoasuccessfulfranchisecomeswithmanybenefits—includingabuilt-incustomerbase,theinitiallumpsumneededtogetstartedcanbeprohibitiveforsome. 2.Franchisesmayhavemorerestrictiveregulationsorguidelines. Unlikestartingyourownbusinessfromscratch,franchisescomewithalistofguidelinesfranchiseesmustfollow.Thesetermsandguidelinescanbefoundinyourfranchiseagreement. Thefranchisormaydictate: Pricing Products Equipment Businesshours Decorandsignage Marketing Location Theseguidelinesaremeanttocreateuniformitysothateachfranchiseisthesameateverylocation. 3.Thefranchisormayoverseeyourbusiness'finances. Inadditiontodictatinghowyourbusinessruns,franchisesalsolackautonomywhenitcomestofinances.Yourfranchisorwillmostlikelycontrolallaspectsofthefranchise'sfinancialdealings.Bepreparedtoroutinelysubmitfinancialstatementssuchasyourbalancesheetandincomestatements. 4.Franchisesoftenrequireadditionalongoingfeesandexpenses. Inadditiontostartupcosts,franchiseownersshouldbudgetfundsforreinvestmentinthebusinessandotherfeesstipulatedbythefranchisor.Theseadditionalcostscancomeintheformoftrainingfees,royaltyfeesorotherserviceslikeadvertising. Whileowningafranchiseoffersimportantbenefits,itdoescomeatahighcost.Readontolearnhowyoucanaffordafranchise. HowtoAffordYourFranchise Openingupanewlocationofafranchiseiscostly.You’llneedtonotonlycoverthefranchisefee,buthavethousandsofdollarsinliquidassets. Firstup,makesurethatyouhaveagoodenoughcreditscoretoqualifyforloans.Havingasavingsaccountisalsoessential.Keepinmindthatsomefranchiserscouldrequireyoutopayfortheup-frontfeewithoutaloan.Forthatreason,youshouldconsiderfranchisesthataccommodateyouruniquefinancialsituation. Hereareafewofyourfundingoptions: 1.SmallBusinessLoans Smallbusinessloansareanexcellentoptionforcoveringyourfranchisefeeandup-frontinvestments.Dependingonyourfinancialsandyourlender,youcanqualifyforhundredsofthousandsofdollars,whichwillmorethancoveryouduringthesetupphase. 2.SmallBusinessGrants Smallbusinessgrantsareanotheravenuetoconsider,withaminorcaveat:Mostgrantissuingauthoritieslookforindependentstartupowners,notforfranchiseowners.Forthatreason,you’llwanttoparsecarefullythroughtheoptions. IfyouidentifyasBIPOC,youcanalsoconsidersmallbusinessgrantsspecificallyforminorities. 3.Microlending Microlendingisanothergreatfranchisefundingoption.Ifyoudon’thaveenoughcapitaltoqualifyforbiggerloans,youcanuseamicro-loan.Theseloanstypicallyamounttolessthan$50,000andarebestforyouifyou’replanningtoopenupalocationforalow-costfranchise.Ideally,youwouldalsohaveothersourcesoffunding,suchasinvestorsandfriendsandfamily,tocovertheup-frontfranchisecosts. 4.Investors Justasifyouwerelaunchingyourownstartup,youcanandshouldlookforinvestorsforyournewfranchiselocation.Youshouldalsodistributeequityaccordingtoyourinvestors’initialinvestment. Beforeseekinginvestors,reviewthefranchiseagreementtoensureyou’renotviolatingthetermsofyourfranchisor-franchiseepartnership.Somefranchisersmaynotallowyoutoseekindividualinvestorsbecauseoftheterms.Italsomaybeoverlycomplicatedtoaccountforfranchiseroyalties,investorequity,employeepayouts,marketingfees,andoperationalcostswhencalculatingyournetprofits. 5.FriendsandFamily Oneofyourbestoptionsforfunding?Yourveryownfriendsandfamily.Asmentioned,openingafranchiselocationrequiresaheftyinvestment.Evenifyourfriendsandfamilychipinat$100apiece,you’llbemuchclosertoaffordingyourfranchisethanyouwereyesterday.Inaddition,yourfriendsandfamilycanbeanexcellentsourceofnewbusinessonceyouopenyourdoors. BecomeanEntrepreneurbyBuyingaFranchise Youcanbecomeanentrepreneurbystartingyourownbusiness—orbybuyingafranchisefromamajorbrand.Takeadvantageofanestablishedbrandnamewhileenjoyingtheperksofrunningyourownoperation.Franchisescanbehighlyworthwhiletoown,especiallywhenyoucreateastrongbusinessplanthathelpsyourprofitsgrow. Editor'snote:ThispostwasoriginallypublishedinOctober2020andhasbeenupdatedforcomprehensiveness.   OriginallypublishedAug23,20227:00:00AM,updatedAugust252022 Topics: Franchise Don'tforgettosharethispost! RelatedArticles WhatisaFranchiseevs.aFranchisor? Sales  |5minread WhatisaFranchiseDisclosureDocument(FDD)andWhyDoYouNeedOne? Sales  |4minread FranchiseAgreements:WhatTheyLookLikeandWhattoExpect Sales  |5minread ExpandOffer ctaSalesPlanTemplate Getitnow Getitnow DownloadforLater