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Franchises
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Article 1: Low-Investment Franchise Ideas
One industry magazine
reports that the average charged for its top 500
franchises is only $23,450. Indeed 70 percent of
franchises charge an initial fee of $30,000 or
less, says the International Franchise
Association (IFA). Hundreds of franchises are
available for $25,000 or less.
Low-cost franchises are more service-oriented,
often home-based and consequently almost always
require much less (if any) upfront capital for
land, physical plant or equipment.
Low-cost franchises present diverse
opportunities—cleaning and personal services,
retail and food sales, automotive and
beauty-related retailers. Virtually every
category, offer franchises for fees of less than
$20,000, according to IFA research.
The Dent Doctor, for example, offers same-day
paint-free automotive dent repair. Its
franchises require initial investments of only
$19,000 and as little as $10,000 in startup
cash. Window Butler, a window cleaning service,
requires only a $19,150 initial investment and
$7,000 cash on hand. The travel industry has the
lowest average initial franchise fee, $18,769,
says a 1998 IFA study.
But be cautious when entry prices sink too low.
Rock-bottom prices usually spell “business
opportunity” rather than franchise. The
distinction is important. Franchisors are
generally required by law to provide more
support and services than a business
opportunity. And they’re typically required to
give greater disclosure than are business
opportunity sellers.
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