Top Low-Cost Franchises 2015
A look at the top Low-Cost Franchise Opportunities for 2015 based on owner satisfaction.
A look at the top Low-Cost Franchise Opportunities for 2015 based on owner satisfaction.
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SPECIAL REPORT: <strong>Top</strong> <strong>Low</strong>-<strong>Cost</strong> <strong>Franchises</strong><br />
Continued from page 6.<br />
What a Typical <strong>Low</strong>-<strong>Cost</strong><br />
Franchisee Looks Like<br />
62%<br />
28%<br />
male/female<br />
10% partnerships<br />
Median age range:<br />
45 – 54<br />
82 %<br />
Caucasian<br />
64%<br />
have a Bachelors degree<br />
or higher<br />
15%<br />
have an Associates degree<br />
21%<br />
have a high school diploma<br />
11 %<br />
are military veterans<br />
Focus Your Search<br />
After deciding which franchise concepts interest<br />
you most and fit your budget, you’re ready<br />
to begin narrowing down your choices. An<br />
experienced franchise consultant can help you<br />
do so by analyzing whether or not you are a<br />
good fit for a particular business opportunity.<br />
Connect With the Franchisor<br />
Contact the brand’s corporate office to find out<br />
what the investment requirements are and what<br />
kind of training and support you would receive.<br />
It’s a good idea to also ask what they feel makes<br />
their top franchisees successful as well as what<br />
their advantages are over competitors.<br />
Scrutinize the FDD<br />
Read the Franchise Disclosure Document<br />
(FDD) very carefully. It clearly defines what<br />
the franchisor will do for you and what they<br />
expect of you. There are 23 sections to<br />
review, so we suggest that you consult an<br />
established franchise attorney. He can ensure<br />
you understand every aspect of the FDD and<br />
alert you to any red flags. An in-depth breakdown<br />
of the FDD, presented as on-demand<br />
video segments, is featured in our Franchise<br />
Buyer’s Toolkit. It is available at www.<br />
FranchiseBusinessReview.com/Toolkit.<br />
Interview Franchise Owners<br />
The best feedback will come from those who<br />
know the most about the franchise opportunity<br />
you are considering—franchisees who own it.<br />
“It’s essential to find out how supportive<br />
the franchise is of the concerns and needs of<br />
franchisees,” says U.S. Lawns franchisee, Kirk.<br />
Even though our List features low-cost<br />
opportunities with the most satisfied franchisees,<br />
you should still take the time to speak<br />
with at least a dozen current franchise owners.<br />
Once a franchisor determines you are a<br />
qualified candidate, you’ll be provided with<br />
franchisees’ contact information. When you<br />
start reaching out to them, keep in mind<br />
that they are busy. Try sending a brief e-mail<br />
outlining why you are contacting them that<br />
asks if there is a good time for you to call.<br />
Remember, they don’t have to get back to you,<br />
so it is important to keep your tone friendly,<br />
professional and appreciative. It is worth being<br />
persistent since you will obtain insight regarding<br />
whether or not the franchise can meet<br />
your goals via your conversations. You can<br />
also ask a few owners if they would be willing<br />
to have you job-shadow them so you see what<br />
running the franchise is really like.<br />
Find Funding<br />
You can obtain funding via a bank or less<br />
traditional methods such as:<br />
• Security-backed loans: Enable you to<br />
take a loan using a financial portfolio,<br />
such as a mutual fund, as collateral. There<br />
are several potential advantages to doing<br />
so. First, you can leave your portfolio in<br />
place, which enables it to grow. Second,<br />
because the loan is backed by your portfolio’s<br />
value, the interest charged will<br />
be lower than for an unsecured loan.<br />
It is important to note that the risk<br />
of borrowing against the value of your<br />
securities is that if your investments fall<br />
in value, the money borrowed will<br />
emphasize your losses.<br />
• Rollovers as Business Start Up (ROBS):<br />
You can invest up to 100% of your retirement<br />
funds into a franchise without<br />
taxes, penalties or a loan via ROBS. You<br />
must have at least $50k in eligible retirement<br />
accounts such as an IRA, 401(k),<br />
or 403(b). Your retirement funds can<br />
be combined with a spouse’s, partner’s<br />
or traditional business loans. Since the<br />
money is yours interest free, ROBS can<br />
increase your chances of being profitable<br />
sooner. That said, there are setup fees, and<br />
on-going maintenance fees associated<br />
with doing a ROBS transaction. Consult<br />
with your tax professional to determine if<br />
this the best option for you.<br />
“About half of our new franchisees use their<br />
401K to fund their franchise fee,” says Hopkins<br />
of Office Pride. “The rest pay for it in cash.”<br />
“We funded our U.S. Lawns franchise using<br />
our 401K and savings after which we had no<br />
cushion. It was very unsettling, but worth the<br />
discomfort to be where we are today,” says Kirk.<br />
12 | For more information on this report, visit: www.FranchiseBusinessReview.com
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