Best Franchises Under 50k: Ultimate Deals for 2022

In this section, we will take a closer look at all the things you need to know before buying a franchise. From conducting the proper market research to assessing your own finances. Lastly, we’ll also mention the pros and cons of running a franchise.

Getting Started

Franchising is an excellent business venture for those looking to run an enterprise without having to deal with the nitty-gritty of a full-blown establishment.

Nevertheless, you should bear in mind that although you get the extra support and structure of a pre-existing business model, you also answer to the franchisor, which may or may not impact how you operate your business.

Most often, the best franchises to buy have at least one common characteristic: the franchisor treats the franchisee (you) as a partner. Therefore, with the right mindset, you can steadily grow your business and expand your venture thanks to the immense help you receive from your franchisor.

That said, here are four things you should consider before actually buying a franchise:

Small Business vs Franchise

How good are you at falling behind and following a predetermined business model with its own set of rules?

The reason being, the best franchise opportunities under 50k will usually have set guidelines and requirements for you to adhere to. If you want to build your own brand and make your own unhindered financial and branding decisions, you might be better off as a small business owner.

To put it simply, with a small business of your own, you get the freedom to do whatever you want; with a franchise, you get a proven business model (read: structure and support).

All in all, if you feel that you’d rather risk it and learn from your own mistakes than having to abide by someone else’s rules, a franchise is not for you.

Know Your Budget

In other words, you need to determine just how much you can go for without breaking the bank. If you have a smaller budget, fear not, simply look at the best franchises under 10k or less that you can find (there are a few on this list within that range). Also, crowdfunding can be one of the funding options.

Why?

Well, it’s simple really. You see, each franchise requires you to invest a fixed amount of money to get started. This capital is then used for construction, equipment, inventory, supplies, and other expenses.

In addition, costs don’t stop there. You also need to pay attention to your overhead costs, etc., as with any other small business venture. However, you might get some additional support from your franchisor (say marketing and training, for instance) free of charge.

That said, even the best cheap franchises need working capital and additional funding to get the business off the ground. Hence, if you are thinking about financing, you should know that you need a solid credit score (a score of 680), and have around 30% of the money you aim to borrow already in cash.

Do Your Homework

Before you make your decision you need to determine whether or not the franchise in question has a market demand in your area.

For example, if you are looking for the best franchises in Texas, be sure to check out the local supply and demand, including the competition within the state. One of the most common rookie mistakes you can make is falling in love with a franchise first and only then convincing yourself about its market potential.

After all, purchasing something that has little or no potential makes little financial sense. Therefore, research databases and look at statistics, reviews, etc. in other words, examine our reviews.

Interview the Franchisor Thoroughly 

When it comes to buying franchises under 50k, reviews often highlight the importance of speaking with the franchisor first before making any serious business decisions. Likewise, you need to make sure that you fully understand the terms of the agreement, so be ready to ask some questions in advance.

Also, invest some time in getting to know your potential franchisor. You want to be sure that you’re partnering with someone who has a genuine interest in your business and not someone with a rehearsed FAQs script.

Lastly, taking a closer look at the amount of support you will be getting from your franchisor is never a bad idea. The most profitable franchises will often offer additional training and support if necessary to ensure your success. Overall, your franchisor should be there to help you and point you in the right direction.

Types of Franchises

Despite using a predetermined business model, not all franchises are the same. Namely, there are different types of franchises that you should be aware of when looking for top franchise opportunities under 50k.

Here are the five most common franchise types:

Job Franchise

These are low-investment (mostly home-based) models for people looking to run a franchise on their own. This is why with this type of franchise the franchisee usually purchases only the essentials — the necessary equipment and a limited amount of supplies, for instance.

Plumbing, travel agencies, coffee vans, domestic lawn care services, real estate services, pool maintenance, event planning, and similar fall under this category.

Distribution (Product) Franchise

Here, the franchisee distributes a certain product line from the franchisor. As a result, the franchisee gets the trademark but not the entire network of the franchisor. In general, franchises for sale under 50k are not often found under this category as they usually deal with larger products, like cars and spare car parts, computers, appliances, and so on.

Ford, Chrysler, Exxon, Texaco, GoodYear Tires, Coca-Cola, and Pepsi are great examples of this model with the latter two even licensing the manufacturing process, or at least, parts of it.

Business Format 

In this case, the franchisee also gets the right to use the trademark along with the entire business system to run things and to market the service/product in question.

If you are looking for the best business to start with 50k, this franchise model might be worth looking into since the franchisor will provide you with a detailed plan of business procedures, as well as additional support and training — hence why this is the most popular franchising model and the one that most people refer to when they’re talking about franchising.

Investment Franchise

More often than not, these are large-scale projects with a large capital investment (barely falling under the “best franchises under 100k” category); think hotels and large restaurant chains. With these models, the franchisee usually invests money and engages his or her own management team (or the franchisor) to operate the business to provide a return on their investment.

Conversion Franchise

A slight modification of standard franchising relationships, this model grows by converting independent small businesses of the same industry to franchise units, adopting trademarks, logos, advertising programs, client service standards, and so on.

In fact, they are often the best franchise opportunities under 50k, and the model is used extensively in the real estate industry, as well as in professional services companies and home services, including electricians, plumbing, and air conditioning.

The Pros and Cons of Franchise Ownership

As previously mentioned, running a franchise is a great way of breaking into the business world since there’s less risk involved. However, licensing agreements, company rules, and predetermined business models all confine the entrepreneur into a set structure.

So, before you start looking for the best franchise opportunities under 50k, be sure to weigh both the pros and cons of the business model in question.

Pros:

• An already-working business plan — if you’re looking to up your prospective entrepreneurship stats as a small business owner, coming up with a solid business plan is the first thing you should do. Namely, you have to design your product/service, come up with an entirely new brand and brand identity from scratch, and so on. But, if you opt for a franchise, you don’t have to mess with any of this since you are buying an already established brand.

• An easier way to secure your finances — let’s say you’re looking at franchises under $30k. If it’s a solid opportunity, you might be able to land a loan contract with said company. And while these in-house options aren’t always the best in terms of interest rates, third-party loans can be a true life-saver for those who have a harder time securing a loan from a bank.

• Less risk involved — buying a franchise means buying an already established and coveted product. As a result, there’s a good chance you’ll be running a successful business. The best small franchises are often established right off the bat; unlike new small businesses.

• More personalized business advice — if you have any questions, you can get info about a particular business from the brand itself (provided they offer their support and guidance). You can also go online and check the different stories from past owners, as well.

Cons:

• Potentially high startup costs — even if you’ve managed to get your hands on the best franchise under 50k, chances are, your startup costs might be steeper than with an independent small business. If you literally want to start from scratch and become an entrepreneur without investing a lot of capital, a franchise might not be for you. It’s best to do the math first, check out corresponding statistics on small businesses, franchising trends, and compare them before opting for one.
• Limited by the brand — as previously mentioned, when you buy a franchise, you have to adhere to a set of rules and stick to the terms of the licensing agreement. Your hands are pretty much tied when it comes to the services/products you offer. Moreover, not even the best franchises under 50k will let you shake up the decor nor the uniform of your staff.
• Fees can add up — a portion of each month’s profits goes to the franchisor in accordance with your licensing agreement. What’s more, fees and other expenses can add up quickly. Hence, to get the best deal possible, hiring a lawyer to look for the business with the most agreeable terms is never a bad idea. If you can’t really wrap your head around the idea of paying monthly fees for owning a well-known brand, then owning a franchise might not be your cup of tea.
• You’re not the one entirely in control — essentially, a franchise’s brand recognition is like a double-edged sword. Even the most profitable franchises under 50k aren’t immune to scandals. This can put a huge strain on your business and your entire entrepreneurial future might be in jeopardy, albeit you did everything by the book.

We hope our comprehensive reviews regarding the best low-cost franchises helped you gain a better understanding of what franchising is and how it works. Likewise, we hope our extensive guide at the end gave budding entrepreneurs a hand at starting a franchise of their dreams.

And as with any financial move, you have to do proper market research and buy a franchise that you truly believe in; otherwise, you won’t be as invested.