Top Franchises with Low Startup Costs: A Smart Entry into Business Ownership
- Matt Lucas
- 4 days ago
- 6 min read
Entering the world of entrepreneurship doesn’t always require deep pockets. For aspiring business owners, franchises with low startup costs offer an affordable and strategic path into business ownership with the backing of an established brand. In this article, we’ll explore some of the top franchises with low startup costs, and we’ll break down the key financial considerations every prospective franchisee should understand: initial investment, royalties, and operational costs. Most importantly, we’ll help you define what “low startup costs” actually means.
“Low-Cost” is Relative.
Let’s first establish what we mean by “low-cost.” Every person’s financial situation is different, and what seems “low-cost” to one potential entrepreneur may seem nearly impossible to another. So, setting your expectations is key to getting your franchise journey off on the right foot.
As with anything in life, you get what you pay for, and high and low investment amounts are relative.
At the risk of you bouncing off our page and going to some other site where they make empty promises - we’ll break your heart right up front – we rarely, if ever – see any “great” franchise investments requiring less than a $50,000 initial investment. Does that mean they don’t exist? No. But we want to set your expectations correctly. You get what you pay for, and if a franchise investment doesn’t require a fairly healthy initial investment, it’s probably not set up to help you make a strong return on your investment as quickly as possible. We hope you’ll stick around to learn more – if you’re truly interested in becoming your own boss.
Although, we won’t be recommending any franchises that require virtually no investment. We will recommend franchise brands that offer the highest opportunity for success and the most expedient chance for a return on investment, at the “lowest” investment possible. An equation for real success.
We’re also here to help you figure out how to get the money you need to buy a franchise.
Let’s go!
Why Choose a Low-Cost Franchise?
Low-cost franchises allow new entrepreneurs to enter the market with lower financial risk while still benefiting from the training, support, and proven systems of a franchise model. These opportunities are ideal for those who want to build a business on a budget, generate supplemental income, or transition into full-time entrepreneurship.
Basically, you can think of your franchise investment as a direct exponent of your returns. Lower investment typically equals lower and | or slower returns. Higher investment can equate to higher or faster returns. We say “can,” because all franchise systems aren’t the same, and no investment is ever guaranteed to be a winner.
Understanding the Initial Investment
The initial investment is the upfront capital required to start your franchise. This can include:
Franchise Fee: The cost to purchase the rights to use the franchise brand.
Training and Onboarding Costs: Many franchises provide comprehensive training for a fee.
Licensing and Insurance: Required by state or local regulations.
Technology or Software: POS systems, CRM tools, or booking platforms.
Marketing and Advertising: Initial campaigns to launch your business.
Low-cost franchises generally require around $50,000 in total startup costs. Home-based or service-based franchises typically fall on the lower end of this spectrum because they don’t require retail space or inventory.
Pro Tip: Don’t forget to include working capital for your first 3-6 months while your business ramps up.
Royalty Fees: What You Need to Know
Royalty fees are ongoing payments you make to the franchisor, typically a percentage of your gross revenue. These fees help fund continued brand development, support, and national marketing campaigns.
Typical Royalty Range: 4% to 12% of gross revenue
Flat Fee Models: Some franchises use a flat fee structure instead of a percentage.
Sliding Fee Models: Some franchises have a sliding royalty fee structure. Many of these will actually have you pay less as your business takes off – rewarding their best franchisees.
Understanding royalty structure is critical because it directly affects your profitability. Look beyond just the number—evaluate what you’re getting in return for those ongoing fees. You can learn more about royalty fees in the Franchise Disclosure Document.
Operational Costs: The Day-to-Day Reality
Beyond the startup and royalties, you must budget for daily operational expenses. These can include:
1. Labor Costs
Home-based businesses may not need employees initially.
Service-based businesses might require subcontractors or part-time workers.
Brick-and-mortar franchises will likely require full-time staff and scheduling software.
2. Administrative Costs
Accounting and bookkeeping
Legal services (especially during launch)
Software subscriptions
Office supplies or co-working space
3. Marketing and Customer Acquisition
Local advertising
Social media management
Print materials like flyers or business cards
4. Ongoing Equipment or Inventory
Cleaning supplies (for janitorial services)
Branded merchandise (for mobile or event-based franchises)
Fitness equipment or uniforms (for health-related businesses)
Operational costs can range from a few hundred dollars to several thousand per month, depending on your business type and how aggressively you plan to grow.
Top Franchises with Low Startup Costs
Now that you have a better understanding of everything involved in an actual franchise investment – let’s look at a few of our favorite “low-cost” franchises. Here are a few franchises businesses we often recommend to first-time entrepreneurs as “low-cost” franchise investments.
1) Doody Calls Franchise - If you have a passion for pets and a desire to be part of the $130+Billion pet industry, a Doody Calls Pet Waste Management franchise could be perfect. They offer a low-overhead, no brick-and-mortar business with flexibility, scalability, and potential for recurring revenue and high returns. See why franchisees think this franchise is “The Poop!”
2) Frios Gourmet Pops Franchise - If you’re ready for “sweet success,” purchasing a Frios Gourmet Pops franchise could be the perfect opportunity. You’ll get the opportunity to be part of a successful brand offering delicious, handcrafted popsicles made with natural ingredients. With an incredibly low investment, their established business model, ongoing support, scalable approach, and unique tie-dyed delivery trucks, you can tap into a thriving $300+Billion frozen treats market and experience “sweet success.”
3) nZone Sports Franchise - An Entrepreneur Franchise 500 for over 5 years straight – N Zone Sports is a great youth sports brand. If you’re looking to help your community with a sports-based franchise, this low-cost, home-based business could be the game-changing franchise opportunity you've been searching for.
4) Tippi Toes Franchise - Many franchisees earn double the initial investment in the first year working less than 40 hours per week! Child enrichment businesses are booming, and this quick-to-start, semi-passive, mobile franchise opportunity will let you get in on the action fast! See for yourself why this biz was on Shark Tank!
While these may not seem glamorous – they’re great ways to begin your entrepreneurial journey! We also invite you to take a look at our Find a Franchise tool for even more great franchises to explore. You can sort the tool by investment level; low, moderate, or advanced.
Remember – don’t think of the initial investment only as money going out – think of it as the potential for money coming back to you as well!
Is a Low-Cost Franchise Right for You?
A low-cost franchise can be an excellent option for first-time entrepreneurs, semi-retired professionals, or anyone seeking a flexible business model with less risk. While the financial entry point is lower, commitment and hustle are still essential. The most successful low-cost franchisees are proactive marketers, great at customer service, and driven to scale strategically.
Before investing, take the time to:
Review the Franchise Disclosure Document (FDD)
Talk to current franchisees
Evaluate your personal financial runway
Understand your time commitment and lifestyle goals
Low-cost franchises provide an accessible path to business ownership for a range of aspiring entrepreneurs. Whether you’re drawn to travel, fitness, cleaning, home services, pet care, or food, there’s likely a low-cost franchise model that fits your goals. Just remember to consider all aspects of the financial picture: startup investment, royalties, operating expenses, and expected return on your investment.
With the right planning, the right franchise, and the right mindset, you can step confidently into entrepreneurship without breaking the bank.
If you want to find out which franchise might be the best fit for you, we’ve got a quick assessment that will help you align with a few of the best fitting brands.
You can explore on your own. But remember, our help is free! Let’s talk! The perfect opportunity might be closer than you think.
