Are you looking to invest in a franchise, but you’re on a tight budget? Are you willing to spend no more than $30,000 on your initial investment?
Browse our listings below to see some of the top franchises for sale for Under $30,000.
You can also obtain an SBA loan for a franchise and invest as little as 30% of the total investment amount.
Franchises under $30.000 for sale are generally going to be in the service industry. This could be commercial cleaning, it could be travel agency concepts, and it could be waste management solutions. There are all different types of service franchises that are available for those that want to invest less than $30.000 in a franchise.
Be aware, under $30.000, there are a lot of business opportunities that are marketed as franchises like vending machine options, ATM type businesses that boost having passive income, but they’re not required to have the same disclosure as a franchise in terms of disclosing estimated investment amounts, the litigation, experience of the executive team, openings and closures. Just do your due diligence if a business does not give you a Franchise Disclosure Document.
If it’s being marketed as a franchise, they’re legally required to give you a Franchise Disclosure Document if you’re in the United States. Under $30.000, there are a lot of business opportunities that are packaged and sound like a franchise, might even be marketed as a franchise, but they’re not franchises.
All franchises on Vetted Biz are clearly stated and noted as franchises and we even give the source of when we last got the information from their FDD. If you’re going to buy any franchise, you’re going to receive this document in the very initial phases of investigating that franchise.
Lots of franchises are cleaning concepts. I’m not a big fan of residential cleaning, as you’re competing with people that operate in the gray market where you have people still paying cash for their cleaners. And then you’re also competing with technology firms that are launching apps where you can get a cleaner on-demand, where commercial cleaning if I was going to open up a franchise in the space would be a lot more attractive because you’re dealing with business professionals. You generally have a contract that could be up for a year and you’re getting paid every week or every month for services rendered.
Some notable franchises are under $30.000, and you can listen to our podcast or watch our video on the Chick-fil-A franchise which is $10.000, as well as the Steak ‘n Shake franchise which is $10.000. Now both those franchises do not operate as traditional franchises where you own and operate and you get 100% of the profits, but for the right candidate, they might be worth exploring.
that often is not spoken to would-be franchisees of some of these low-cost franchises, which are generally under $100,000, is there’s not enough profit margin for a day-to-day manager. So as a franchisee of a low-cost franchise, it could be in the service sector, you can expect to work full time for the first 12 to 18 months. You can expect to work full time for the first 12 to 18 months.
Is it takes a long time to build up that initial customer base and pass breakeven? Where some franchises, especially in the food sector, might break even after three, or six months. For some of the service brands, it can take up to 12 months or more, especially for service concepts like staffing, it can take 18 months to break even. It’s really important to talk to current franchisees of any franchise model that you’re thinking about investing in to see how long it took them to break even, and as well as until what time was there enough profit margin to potentially have a day to day manager in place.
I mentioned working full time. Full time has different definitions depending on who you are. Many of the service concepts that we’ve looked at in the $40,000, $50,000, $60,000 range require or strongly suggest and that most of the franchisees that are doing this, work 50 to 60 hours a week for the first year. So this essentially requires a full-time commitment to the business without earning any money. So make sure that you’re comfortable with that. And perhaps you have a spouse that has a job or another business with steady income coming in for about 6 to 12 to 18 months. You can expect to make no money at all. Or very little money in many of these service-based low franchise cost businesses.
is the is pretty high for many of these low-cost franchises. Our analyst looked at over 2,000 different franchise brands, and how they performed with the 7(a) program under the SBA program… Cut. Our analyst at Vetted Biz looked at over 2,000 franchise brands. Many of these franchises were low-cost opportunities under $100,000 that tended to have high default rates. Depending on the specific industry, as well as the specific franchise opportunity.
Some of the reasons that might contribute to this high failure rate are it’s a low entry amount, so it’s easy to get in, a lot more , and perhaps even competition in those different industries. Also, some of the systems have less commitment from the franchisor. You’re not working with the franchisor on selecting the real estate, and building out the store. There’s not extensive training on-site oftentimes. So there’s less commitment on the side of the franchisor. Also on the side of the franchisee in terms of signing a commercial lease for 5 years or 10 years. And having that personal guarantee.
Many of the service-based concepts can be operated from your home, a shared office, and month-to-month rent office space, as many of the services, are conducted outside of your business premise.
Low-cost franchises often don’t have enough profit margin for a manager. Also, the franchisee for the first year is generally working many hours, it could be 50 to 60 hours plus. It can take a long time to build your customer base and then break even. As well as many of the brands in the low-cost category sub-$100,000 franchise investment have pretty high franchise failure rates.
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