Whether you’re looking to add to your portfolio or simply be your own boss, franchising can be an incredible opportunity for wealth building and entrepreneurship.
While starting a business from scratch is a massive undertaking, franchising to start a business with established brand recognition (plus training and support systems) may take much of the risk away.
Or will it? It can be hard to choose the right opportunity here, and many of these organizations do a lot of marketing to show themselves in a good light.
This guide of the best franchises to own for beginners will provide an overview of 5 popular options and whether they will make sense for you. Plus, we’ll cover a bunch of franchising terminology that is important for beginners to understand, so they don’t get tricked or taken advantage of.
The Lowest Cost Franchises in 2024
Your first thought around franchising may be about golden arches and lovin’ it, but there are a number of (much) lower cost franchising opportunities around—in industries you may not expect.
That said, we’re going to evaluate whether they are viable options for entrepreneurs and investors.
Cruise Planners: Home-Based Travel Agency Franchise
The TLDR:
- A way for folks to dip their toes into running their own businesses from their own homes
- Low cost, but potentially mixed results
- Training provided
- Not relevant for investors
Cruise Planners offers people the ability to train to be travel agents and run their own travel agencies in their own homes. Franchisees do not open “Cruise Planners” locations, but rather run under their own branding and demand generation.
As part of the initial investment (which is occasionally discounted, as shown above), franchisees get an all-expenses paid trip to Ft. Lauderdale for a 6-day training plus various support systems for business operations, ranging from CRM access to “ongoing business development coaching and ongoing support.”
Franchisees keep between 97% and 98.5% of commissions; the remainder is a “royalty” paid to Cruise Planners. However, if “unapproved” travel suppliers are used, the commission dips to 90%.
Franchising with Cruise Planners may be an option for people who are genuinely passionate about the travel agent lifestyle and getting training in it. Information about Cruise Planners online mostly seems to be written with bias and/or by people currently associated with the company.
In the end, the relatively low cost may reflect the quality of the results.
Fit4Mom: Low-Cost Fitness Franchise
The TLDR:
- A community-driven fitness franchising opportunity without need for a brick-and-mortar location
- Low cost
- Also not relevant for investors
Fit4Mom franchisees start groups, not gyms, that are more like paid workout groups for new and expecting moms. Starting a franchise requires contacting the Fit4Mom organization via a form and scheduling a call that will determine someone’s eligibility to open a franchise.
According to the Fit4Mom website, franchising starts at $7500, but based on additional research, a franchise may ultimately cost upwards of $30k depending on a number of factors (e.g., location, space, equipment, royalty fees, monthly franchise fee tier, insurance, and the additional specifics of negotiation).
The cost also extends to franchise renewal, which is a percentage of the annual franchise fee, and to qualify for franchise renewal, franchisees must hit $10k in topline sales.
Fit4Mom may be another opportunity for those passionate about working with new moms and scaling the business to cover expenses of the parent org, but it seems to have little other relevance.
Dream Vacations: Home-Based Travel Agency Franchise
The TLDR:
- Similar to Cruise Planners
- Lower associated fees than Cruise Planners
- Not relevant for investors
Dream Vacations, like Cruise Planners, is a franchise opportunity for individuals looking to start a travel agency from their homes.
Starting a franchise can start at $7350 for veterans and their family members, but the “standard cost” is $10.5k. Also like cruise planners, Dream Vacations offers franchisees a weeklong training course, followed by substantial online training resources (they call them “modules”).
Dream Vacations takes 3% of sales commissions as royalty fees. Sales commissions are explained as a payout “from the booking organization as a thanks for recommending their product (i.e. hotel, cruise ship, tour operator, etc.) to an interested traveler.”
SuperGlass Windshield Repair: Mobile Franchise Opportunity
The TLDR:
- More transparency around starting costs
- Relatively higher cost (starts at $28k)
- Established international organization; reviews easily findable online
- Not relevant for investors
SuperGlass Windshield Repair is a franchise opportunity for individuals to start their own windshield replacement businesses under the SuperGlass umbrella rather than as their own personally branded businesses.
Franchisees get a one-week training in Orlando, Florida then have access to online resources, meetings, conventions, and marketing support such as advertising templates, social media/website help, and overall guidance.
Initial investment is based on the franchisee’s location. SuperGlass locations opened in smaller cities (<100k population) cost $28,652, while locations opened in larger cities (500k+ population) start at $48,652 and go up to $57,922.
Buildingstars: Commercial Cleaning Franchise
The TLDR:
- Franchising possible at potentially one of the lowest costs around (to be an individual employee) and at a higher entry point (to open a regional franchise)
- Opportunity for investors
Buildingstars offers commercial cleaning franchising opportunities for those looking to be small business owners as well as for folks looking to make a more substantial investment and grow a regional cleaning business.
On the small business end, the upfront cost is $795, while the regional business ownership (called “Master Franchise”) costs between $113k and $300k.
The small business option seems to have no strings or requirements associated with it. However, the Master Franchise ownership option requires a vetting process and the following requirements:
- FICO of 720+
- Net worth of at least $2m to $5m
- $500k in liquidity
- “Longevity” in a previous career
- Financial/business expertise (incl. ability to run a P&L)
- Experience in B2B sales
Buildingstars locations and reviews are readily visible in search engines, seeming to be reputable and trustworthy businesses. However, few details are available in terms of the Master Franchise path.
(By the way… What about Non-Beginner Franchises?)
For a discussion of top franchises to own (including popular fast food chains), we put together a resource that covers the best franchises to own.
Now, back to the main story…
Important Concepts for Beginners to Understand aboug Franchise Ownership
Off the bat here, we want to point out that many of the low-cost franchise options that promise high returns may not necessarily be as they appear. Especially if “high returns” are a key part of their marketing and the phrase is plastered all over their websites.
In general, there is opportunity for franchisees at the above organizations to see modest success. But some of these franchises may be betting on recruiting larger numbers of franchisees based on promises of success—and highlighting those well-established franchisees who worked extremely hard to make their businesses work.
It’s like anything else. The more you put into the businesses, the greater your chances of success. Though, of course, nothing is guaranteed, and some franchisees may end up working extremely hard and have nothing to show for it.
Some franchisees may not fully understand the requirements and fees of operating under a franchise’s terms, which impact their chances of success, so we’re listing some of them here.
Franchise Fee
A franchise fee is a payment that a franchisee must pay the franchise to leverage the franchise’s support system and/or the well-established brand name. The fee may range from hundreds of dollars to tens of thousands of dollars.
For example, the Buildingstars franchise fee is $795, while SuperGlass includes their actual franchise fee within the overall upfront cost, so it may be upwards of $20k.
Important note: the franchise fee is separate from other startup costs, including inventory, real estate, equipment, and royalties (see the next section). Potential franchisees need to carefully review their Franchise Disclosure Document (FDD) to understand the actual investment required.
Royalty Fees
Most franchises don’t let their franchisees operate without getting a taste of the sales.
Royalty fees are set percentages that franchises take out of their franchisees’ businesses. The fees are usually taken from gross sales, and range from as little as 1.5% (as with Cruise Planners) to 12% with other organizations.
Understanding your royalty fees (effectively, extra taxes) is absolutely crucial before you pay any upfront cost so that you know what you’re getting into beforehand and so that you’ll understand how much money you’ll have to make to live comfortably.
Franchise Disclosure Document (FDD)
A Franchise Disclosure Document (FDD) is a legal document that provides comprehensive information about the franchise opportunity.
FDDs are regulated by the Federal Trade Commission (FTC) and must be provided to prospective franchisees at least 14 days before signing any binding agreements or making payments.
The FDD consists of 23 formalized, standardized sections, including:
- Franchisor's background and litigation history
- Initial and ongoing fees
- Estimated initial investment
- Franchisee obligations and restrictions
- Territory rights and protection
FDD Section Call-Out: Item 19 - Financial Performance Representations
Item 19 of the FDD is extremely important, as it provides information on the franchise's financial performance. Translation: financial performance a franchisee can expect.
While franchises are not required to include this information, many choose to do so to attract potential franchisees. The FTC explains this: “If a franchisor makes financial performance representations (FPR) to prospective franchisees in the sale of a franchise, it must disclose such FPRs.”
Item 19 may include data such as:
- Average gross sales
- Net profits
- Expense ratios
- Top and bottom performing franchisee data
Territory Protection
Territory protection is a crucial aspect of franchise ownership: it grants franchisees the exclusive right to operate within a defined geographic area to prevent too much (or any) competition among franchisees.
This protection prevents competition from other franchisees within the same brand, allowing the franchisee to build their customer base and establish a strong market presence.
The size and scope of the protected territory can vary widely between franchises and may be determined by factors such as population density, market demand, and the franchisor's expansion plans.
3 Types of Territory Protection
- Exclusive territory: The franchisee has the sole right to operate within a defined geographic area, with no other franchisees from the same brand permitted to open locations within that territory.
- Non-exclusive territory: The franchisor may grant multiple franchisees the right to operate within the same geographic area, potentially leading to increased competition.
- Protected territory with exceptions: The franchisee has exclusive rights within a defined area, but the franchisor may reserve the right to open company-owned locations or grant franchises in certain non-traditional venues (e.g., airports, stadiums, or educational institutions).
Low-Cost Franchises: Are They Worth It?
Based on our research, it’s tough to give a definitive answer, but as we discussed, there is a non-guaranteed opportunity for those willing to work… Hard.
The five franchises we covered are often covered by franchise roundups as the best franchises to own for beginners, but we can’t definitely recommend that anyone go into them without a specific drive and passion for the industry.
For example, we think that someone super interested in travel (and motivated specifically to start their own travel agency) could franchise Dream Vacations or Cruise Planners.
Someone else might use one of those organizations as a training ground to start their own business and leverage the skills they learned while running their agency. Someone who gets great at selling might transition from their agency into sales at a larger organization, potentially substantially increasing their income in the process.
One thing we can say, though, is that the more established, transparent businesses with higher associated fees may offer a more likely opportunity for success.
Our winners here: SuperGlass and Master Franchising under the Buildingstars umbrella.
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