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So You Want to Own a Franchise?
One of the fastest and easiest ways to start your own business involves buying a franchise.  Sure, you can build a business from the ground up, which means doing plenty of market research, finding the right location, and slowly building a solid reputation over the course of months or years.  Or you can gain instant recognition by paying a regional or national company for the right to use their name, follow their well-developed business plan for success, and enjoy knowledgeable feedback from dozens, hundreds or even thousands of franchise owners who operate under the same banner.

It’s Only Money
No matter what kind of franchise you wish to own—a fast-food restaurant, a daycare center, or an auto repair facility—you will need a fair amount of cash to get things moving.  First there is the franchise fee, which the parent company charges to cover a variety of items—training, marketing materials, and maybe even some advertising tie-ins.  Next you will have start-up costs that might include acquiring equipment and inventory, renting or owning a building (or a vehicle, if you’re buying a mobile franchise), and hiring employees.  Finally there are regular fixed costs to consider, as most companies require their franchisees to have at least three to six months of operating capital on hand to smooth over any start-up glitches while you’re waiting to turn a profit.  Clearly, the less money you spend up-front, the more you will have to help make the business successful later on.

How Much is Too Much?
Some of the highest-profile businesses around require a great deal of start-up capital to become one of their franchisees.  In some cases, you will need from $100,000 to $250,000 in cash to get the ball rolling, and that figure could grow to a million dollars or more by the time you’re ready to open your doors to the public.  That’s the price you will pay to own a McDonald’s restaurant or run an H&R Block tax service.  But unless you have your heart set on serving up Big Macs, there are less expensive ways to be your own boss.  All it takes is a willingness to work hard, the ability to do plenty of research, and having an open mind.  Plenty of opportunities exist for people who only have a few thousand dollars to spend.  While the amount you pay up-front can affect your profit potential, a low-cost franchise hardly means settling for a second-class opportunity.

Keeping Costs Down
There are three basic types of franchises—storefront, mobile, and home-based.  Generally speaking, the higher the overhead, the higher the franchise fees and related expenses.  Choosing the right industry is definitely the first step in finding a low-cost franchise to acquire.  Maid service businesses—doing home- or office cleaning—can be started for less than $10,000.  You can work from home or out of an industrial park where rent is low, and your only other expenses involve cleaning supplies and vehicle maintenance.  Actually, any business you can operate from home is almost always a bargain.  This would include such fields as home repair services, school tutoring, printing or marketing work, or any kind of consulting.  Another inexpensive way to achieve financial independence is by operating out of a kiosk.  Drive-through coffee shops, digital photo processing, hot dog stands, or dry cleaning businesses (where the actually work is done offsite) are but four examples out of thousands.

Let the Franchisee Beware
One should not confuse “price” with “value.”  Just because something costs less does not mean it will be a good deal for you.  Pay attention to the franchise fee, of course, but also examine closely how much money it takes to keep the business running and profitable.  Ask yourself the following questions:
· Am I required to pay a royalty above and beyond my franchise fee?
· How expensive is the equipment to operate this business, and how often does it need to be replaced?
· Does my franchise agreement require me to buy inventory items from the parent company, or can I shop around for better deals elsewhere?
· How much money will I spend each month on advertising and marketing, and does the franchisor offer any kind of financial assistance or national campaign?

Only by knowing these things up front, and by examining many more critical issues, will you know for sure if that low-cost franchise is truly a great deal, or only priced to move.

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