9 Reasons Why Small Franchises are a Good Investment

Becky Martin, writer

Published at 19/09/2017, Updated on 04/05/2022 , Reading time: 5 min

9 Reasons Why Small Franchises are a Good Investment — Photo © small-franchise-good-investment.jpg

Many people dream of starting their own business but are held back by lack of funding or the fear that it could all go wrong. If this sounds like you, starting a low-cost franchise could be the perfect option. Read on to find out why small franchises are such a good investment.

Being an entrepreneur comes with an element of risk, but there are ways to boost your chances of success, such as considering small franchise opportunities. By starting out with an investment that is affordable, new franchisees can create a profitable business while they build their confidence and experience, before expanding the business or buying a bigger franchise for sale further down the line.

Franchise businesses with a small initial franchise fee can often be operated as a part-time job. But will a franchise that is run on just a few hours a week be profitable? And will it be profitable enough to justify the time and money that needs to be invested in the first place? The answer to both questions is yes. There are plenty of franchises that can be very lucrative but only require a small investment and need just a few hours a week to run. This doesn’t mean that the business demands lower levels of dedication, hard work and passion; rather, it probably involves skills that its franchisees already have, and does not require the purchase of expensive equipment.

Why is a small franchise a good investment?

1. Benefit from training and support

You’ll get access to a comprehensive training programme that provides you with all the skills you need to run the franchise successfully. Most franchises provide an initial training scheme as well as ongoing support.

As part of the franchise package, you’ll also receive help with advertising and marketing. It can be tough for an independent business to build up a customer base when they are just emerging in the market, but your small franchise will be part of a recognised brand that is promoted both locally and nationally.

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2. Less risky route to business ownership

Your business is less likely to fail if you start it through a franchise. This is because you’ll be taking on a tried and tested business model that has been perfected over the years the franchisor has developed industry knowledge and experience.

3. More likely to secure funding from lenders

You are more likely to secure funding from banks if you open a franchise business than if you start an independent business from scratch because you’ll be seen as less of a risk.

4. Preferential rates on equipment

Being part of a franchise can provide economies of scale when buying stock or equipment. Because the franchise will have increased purchasing power with certain suppliers, discounts can be obtained.

5. Work from home

Most small franchises can be operated from home. That means the set-up costs are lower and the ongoing overheads almost non-existent. No extra employees are needed, so the costs associated with employees, such as insurance, are eliminated, so it is easier to make a profit in a short space of time.

It’s also a very attractive opportunity for investors that want to avoid the dreaded morning commute. You could choose to work from the comfort of your sofa or create a designated office space – whichever suits you and your ideal working environment.

6. Work part-time

When you buy a franchise that has an affordable franchise fee, it’s more than likely that you’ll be able to run the business on a part-time basis. Doing so will enable you to earn extra income whilst investing in your future. In the long run, this is much more profitable than simply getting a traditional part-time job to subsidise wages from a full-time job.

Also, it means that you can fit your working schedule around your personal commitments. So, whether you’re a new mum wanting to spend quality time with your baby or simply want to have control over the hours you work, starting a small franchise unit could be a wise investment decision.

7. Financial security

Having a second job within the franchise network can offer security in times of economic uncertainty. By investing in a part-time franchise, you have a safety net, should your primary job come under threat of redundancy.

8. Find out if the franchise model is for you

Small franchise opportunities also offer you the chance to try out the franchise model before you decide to expand your business or commit to a more expensive alternative. Launching a business can be very daunting, so starting small with the option to grow takes away some of the fear and uncertainty that more expensive franchise opportunities can bring. There are even a few franchises that give you the opportunity to ‘try before you buy’ with a trial period before the franchise agreement is signed.

9. It offers alternative employment

We’ve already mentioned that the employment market is becoming more unstable and people are unfortunately facing redundancy every day. This is all too true as a result of the unprecedented COVID-19 crisis. Lots of redundancy packages might not provide the opportunity to invest in a high-cost franchise like a globally recognised franchise business. However, small franchises with lower investment costs are becoming a popular alternative for people to consider.

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What opportunites are there?

If you have been reassured that investing in a small franchise could be your next business venture, you can check out the top 10 low-cost franchises to consider in 2020. Let’s take a quick look at two of them:

Tubz

This leading sweet vending brand provides packages with a two-year guarantee for towers and floor machines, as well as other products, such as corporate clothing and inventory stock. Investments in this profitable franchise start at just £3,295.

FiltaFry

This unique franchise provides a complete fryer management service for customers across the UK. There is unlimited growth potential and franchisees can develop a vast network of clients in no time. A minimum investment of just £5,000 is all you need to get started with FiltaFry.