New Research Finds Low Cost Franchises Offer Huge Potential

14/11/2015
Low costs mean low rewards, right?
Wrong.

According to a recent study from the Franchise Business Review, prospective franchise owners looking to invest in a low-cost franchise opportunity––one that costs less than $100,000––can make just as much in earnings as the higher price options.
Earnings aren’t the only plus, though. The study also found that those making smart low-cost franchise investments often achieve a “more flexible lifestyle,” and are frequently given the same high level of support from their corporate offices.
Let’s dive a little further into the study and explore why low-cost franchises give owners the power to earn just as much as the biggest brands out there.
Confirming what franchise experts have been hearing for years
To put this study together, researchers at the Franchise Business Review interviewed the CEOs and franchisees of over 100 low-cost franchises. In total, their survey reached more than 10,000 franchisees.
Franchisees were asked to rate and rank their particular franchise systems in the following areas:

• Financial opportunity
• Training and support
• Leadership
• Operations and product development
• Core values
• Franchisee community
• General satisfaction

In addition to these essential parts of business, they also responded to questions about their specific market area, customer demographics, the business lifestyle, their overall level of enjoyment owning and running the franchise and the role they play in a larger community of franchisees.
What were the results?
The low-cost franchise owners rated their companies higher in every category of the survey than did those who had bought higher priced franchises ($100,000 or more).
While this might seem surprising to most people, Franchise Business Review’s President Michelle Rowan said the data “supports what we’d been already hearing from franchisees––that they are often times more satisfied in a franchise costing less money.”
The biggest difference between the low-cost and higher-cost franchisees was seen in the area of Franchise Training and Support.
Why are low-cost franchises opportunities often better than high cost opportunities?
Simply put, lower initial investments give franchisees the opportunity to grow faster.
Rather than six-figure franchise fees bigger brands charge just to launch a business, smaller low-cost opportunities give you the ability to enter the market for far less money. Combined with the low overhead needed to get started, these opportunities make it possible to start putting more money in your pocket faster.
Want to learn more about earning big with a low-cost franchise? Check out our article: How to Turn a Low-Cost Franchise into a Highly Profitable Business.
Interested in a low-cost franchise opportunity driven by a business model that has proven itself effective all over the country? Click here to learn how The Groutsmith differentiates itself from the competition, or contact us today to start a conversation about starting a franchise of your very own.

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