Franchises under 5k

We are going to talk about some of the top franchises under 5k. Keep in mind there’s not that many. From our last count, there are only 21 franchises where you could invest less than $5,000, open up the business including working capital to pass the break-even point, and start collecting your dividends back.

There are some diamonds in the rough. And depending if you’re willing to roll up your sleeves and get dirty literally, there’s a pet waste removal business. Probably, in the beginning, it’s going to be you, the owner, picking up dog poop, but with time, you scale up the opportunity. And this franchise is called POOP 911. The numbers are pretty appealing for those that are on a limited budget.

There’s also College Pro Painters, however, we are not so convinced by this opportunity given the relatively high failure rateThe Failure Rate represents franchise unit terminations, non-renewals and franchises that ceased operations for other reasons in a given year relative to the total number of franchise units. A lower closure rate, overall terminations, and non-renewals indicate a more stable franchise system.   Franchise failures… More. And, again, that’s not just with College Pro Painters, but most franchises under 5k do have a pretty high failure rate. As it’s easy to get in and usually the franchisor is open for you to get out of the contract before the 5-year or 10-year period which you signed the franchise agreement for.

Also there are some travel agency businesses. We wouldn’t recommend that, especially as travel is still way down in 2021 and we don’t expect 2022 to return to the pre-COVID numbers. And you’re also competing with some pretty big technology travel heavy weights like priceline.com, Kayak, Expedia. So the franchises that offer people to be essentially a travel agency, it’s not the best space to be getting into in 2022.

Franchise financing

And we would definitely overall, if you’re looking to open up franchises under 5k, try to save some more money in capital. Or you could potentially look at different ways to finance the investment. You can consider a cash-out refinance, mortgage from your property, your apartment or house. You could also do a 401(k) roll over. So use part of your retirement savings to invest in your business, as well as you can look at an SBA loan. But if you have cash less than $5,000, there aren’t too many options available in the traditional SBA financing round.

So, again, $5,000 or less to invest in a franchise will definitely limit your options. There’s very few available, and we do have the largest database at vettedbiz.com on franchises in the United States.