The Top Low Cost Franchise Sectors of 2021
It’s impossible to start a business when you can’t afford its costs, and unthinkable to sign up with a franchise when it would take every penny you have. This fear of the costs puts many people off starting a franchise outlet, as they assume that it will cost hundreds of thousands of dollars to get started. But the truth is that there are plenty of low cost franchises, ones that take under $100,000 to start and that could be your path to owning your own business.
Some industries are better for this than others. Home-based businesses in particular can keep down costs and make a business affordable, though some others fit the bill. To help you get started, here are some of the top low cost franchising sectors, and examples of their most successful franchises.
Top Low Cost Franchise Sector #1: Senior Care
As lifespans increase and family sizes fall, the American population is aging. According to the Population Reference Bureau, over-65s will represent nearly a quarter of the population by 2060. Over 60% of them are retired, and by 2005, 91% of older adults had some sort of chronic condition, increasing their need for support.
Many retirees prefer to stay at home as long as possible, for both personal and financial reasons. The average monthly cost of a private room in a nursing home was $8,821 in 2020, compared with $4,481 for home services. In-home care allows people to live independently for longer and at less expense, and the result has been great growth for franchises in this sector, with average growth of 8% per year from 2014 to 2019. The franchised part of the industry is currently worth $11 billion and employs nearly 400,000 people across 11,000 businesses.
The services provided by franchises vary. Some people need medical care, while others only need non-medical assistance. Some franchises work with disabled people or those recovering from medical conditions. The skills involved vary, but in all cases, the aim is to make people feel comfortable and cared for.
- Home Helpers provides in-home care for the elderly. Its services aren’t built around specialist or medical care, but provide compassionate in-home support from experienced, well-trained staff, catering to customers’ specific needs.
- Assisting Hands provides non-medical care to seniors and others seeking in-home support. It emphasizes exceptional service and a personalized approach.
- Amada Senior Care provides a range of services for those with care needs. This includes long-term care insurance, support in finding a retirement community, and in-home caregivers.
Top Low Cost Franchise Sector #2: Commercial Cleaning
Every workspace needs to be cleaned, and this is seldom the responsibility of a business’s own staff. The result is a commercial cleaning market full of skilled, experienced professionals, worth an estimated $64 billion in the US alone.
Because it’s a low-investment sector, franchises play a significant part in commercial cleaning, with 36,000 franchised outlets in the US. 90% of contract cleaners work on office buildings, making this the biggest earner for the industry, but there are a huge range of other properties to deal with, including public buildings, shops, and gyms. From 2015-2020, the janitorial industry saw average annual growth of 2.1%.
Many companies in this market offer both “unit franchises” and “master franchises.” A master franchisee is the one who sells the owner-operator unit franchises and takes the lead on lining up clients and negotiating service contracts. The unit franchisee is the one who delivers the cleaning services, without having to worry about the sales aspect.
A couple of trends are currently shaping the commercial cleaning market. One is “green” cleaning, driven by clients’ desire to reduce their environmental impact through organic and natural cleaning products. The other is “cleaning for health,” with a focus on eliminating germs, an area likely to escalate following the COVID-19 pandemic.
- Servicemaster Clean specializes in carpet, upholstery, and hard floor cleaning. It also offers other services, such as office cleaning, reactive cleaning, and cleaning for infection control.
- Jan-Pro provides cleaning services to all kinds of businesses, including messy places such as restaurants, medical facilities, and gyms. It offers options for a wide range of budgets and has been rated as a top cleaning franchise in several recent listings.
- With over thirty years of experience, Anago Cleaning Systems is a leading cleaner for many types of businesses. Services include high-tough disinfection, electrostatic disinfection, and comprehensive detail cleaning.
Top Low Cost Franchise Sector #3: Children’s Fitness Programs
Every parent wants the best for their children, and that includes keeping them physically fit. A $301 million industry has sprung up providing fun, active entertainment that keeps kids engaged, and franchises play a part in that.
Successful franchises have countered the lure of electronic devices by finding ways to make fitness fun and keep kids coming back for more. This often means team sports, but it can involve other physical activities, from athletics to trampolining, that create fun, thrills, and laughter.
This industry has been relatively stable over the past decade, seeing neither significant growth nor steady decline. A slight contraction in the birth rate has been balanced by rising per capita income to keep revenues on an even keel. A predicted rise in both the birth rate and the child obesity rate is expected to boost the industry over the next five years, which might make this a good time to jump on board.
To work in this area, you need to maintain your enthusiasm and be the face of fun when surrounded by hordes of screaming kids. If that sounds like your kind of fun, then this could be the industry for you.
- Skyhawks Sports Academy offers camps, after-school programs, classes, and leagues for 4 to 14-year-olds across sports including basketball, baseball, and soccer. Its alternative for kids aged 18 months to 5 years, Supertots Sports Academy, offers more limited but still exciting options to develop both skills and fitness.
- Soccer Shots provides a soccer program through childcare facilities, preschools, elementary schools, and local parks. With low overheads, established support, and a curriculum developed for its audience, it’s a good choice for the soccer enthusiast.
- Amazing Athletes aims to empower children through a range of sports. Camps, events, private classes, and online tutoring mean that fitness can be spread in a way that suits the franchisee and their local customer base.
Top Low Cost Franchise Sector #4: Children’s Enrichment Programs: STEM
Fitness isn’t the only way that parents seek to provide their kids with extra support. Enrichment programs are a popular way to expand children’s opportunities, and for franchisees to get involved in shaping young lives.
Science, technology, engineering, and math (STEM) is a vital part of the education system. Knowledge in this area can lead to careers in engineering, medicine, finance, computing, and other prestigious and well-paid fields. But it’s also an area where many children struggle, and where teachers struggle to find time to push more able pupils.
STEM enrichment programs counter this by making learning fun. From science experiments to LEGO-based engineering projects, they provide kids with thrilling opportunities to learn about the sciences. Many educators now extend this coverage from STEM to STEAM, adding art to the mix.
Getting kids to engage with learning outside of school usually means disguising what’s going on. The skills involved in running an enrichment program are as much about making an after-school or holiday activity fun and engaging as they are about subject matter knowledge. Fortunately, the tools to deliver this are often surprisingly low cost, and by teaming up with schools, enrichment providers can tap into a pre-made audience.
- Snapology uses LEGO to teach kids about a wide range of subjects in fun ways, including engineering, programing, and art. As well as after-school and holiday programs, it offers a pre-school option and inclusive programs for children with special needs.
- Challenge Island offers an award-winning curriculum of STEAM learning for field trips and after-school clubs. Working in “tribes” in an environment with no screens or digital devices, kids can learn that they don’t need to rely on digital tools.
- STEM For Kids offers courses in computer programing, engineering, biomedical engineering, and innovation. It aims to encourage innovative thinking and a passion for STEM from an early age, to give kids the best chance in these subjects.
Top Low Cost Franchise Sector #5: Real Estate
Real estate values have grown significantly in the 21st century, and with them the commission that can be earned on sales. Demand for single-family homes, and for greater space in those homes, has particularly boosted the residential market. Meanwhile, costs remain low for franchisees, as most of the work of selling real estate is about online activity and visits to other people’s homes. This makes real estate a very accessible sector.
Economic growth has driven a boom in the commercial real estate market, while cost-cutting measures have shaped business decisions and, ironically, fed more money to real estate agents. Many businesses are willing to take the short-term hit of real estate fees for the long-term benefits of a better positioned building, making the most of business-friendly cities and low-cost workforces. Even during the economic turmoil of 2020, the real estate market was worth more than it had been just five years before.
It’s important to get involved in the right sort of property. Single-family homes, data centers, and industrial properties are all expected to rise in demand and value over the next few years, while retail and hospitality continue to struggle. Brick and mortar retail’s decline provides an opportunity for real estate franchises, who can help small businesses downsize to affordable properties and big brands move into vacated space for new and better rental deals.
- HomeVestors of America offers sellers a quick, certain way of selling their homes, by buying them for cash, even in an “ugly” state. This lets franchisees profit off both conventional sales and those where the sellers want to avoid the hassle of renovating their home to get it ready for the market.
- Realty One Group is a modern, lifestyle real estate brand which sets great value by the professionals working within the franchise. The company places an emphasis on providing coaching and a supportive community, as well as a cool culture that franchisees can take pride in.
- A progressive real estate franchise, NextHome uses a flexible pricing model and competitive programs to attract franchisees and customers. It leans on innovative technology to increase services and profit.
Top Low Cost Franchise Sector #6: Advertising Services
Advertising is one of the biggest industries in the US, having grown from $66 billion in revenue in 2004 to nearly $139 billion in 2019. It covers everything from product placement in multi-million-dollar films down to leaflets stuffed into local mailboxes, and is vital to every sector of the economy. Small businesses and franchises thrive at the lower end of the advertising scale, making themselves invaluable to businesses in a specific niche or area.
Online marketing is the biggest growth area, having increased by 13.1% per year from 2015 to 2020. This is a constantly evolving arena, thanks to the ever-changing whims of algorithms in critical marketing channels such as Facebook and Amazon, creating opportunities for franchises to stand out through innovative approaches.
But old school methods can still do well. Direct marketing, including direct mail, remains a major advertising channel in the US. Leaflets thrust through doors or into mailboxes are an important way to reach local customers. Eye-catching glossy magazines and postcards can help businesses to distinguish themselves from the mass of bulk advertising, while coupons lure in bargain conscious consumers.
- RSVP Advertising is the leading direct mail franchise company, targeting affluent homeowners with cost-effective mailings. By taking professions and income into account, it reaches customers who are twice as likely to purchase as average, making it an appealing option for clients.
- Money Pages provides locally targeted advertising, connecting businesses to people in their communities. From an initial magazine, it has grown over twenty years to include direct mail, digital marketing, and branding services.
- Discovery Map’s fun, illustrated maps target people looking to explore a specific area. By featuring local businesses, the maps help these businesses draw the attention of both locals and travelers.
Top Low Cost Franchise Sector #7: Home Inspections
If you’re looking to profit off the property market but don’t want the high pressure and sales focus of real estate dealing, then home inspections could be the option for you. Almost every real estate sale in North America involves an inspector who evaluates the building, looking for flaws, defects, and any areas of concern for the buyer. They’re a vital part of the process, providing buyers with information about whether they’re making the right choice.
Across the industry, inspectors’ main customers are commercial and governments agents, who want to assess the state of non-residential buildings both during and after construction. Home inspections are also an important part of the industry, and may be an easier entry point for franchisees, who can cater to the local residential market.
Sales and inspections are likely to increase in the coming years, creating more work for inspectors. The industry already employs nearly 50,000 people, and it is expected to expand over the next five years. If you can learn the regulations needed to carry out an inspection, then this is a low cost franchise area with huge potential.
- Pillar to Post Home Inspectors provides inspections for some of the largest, most reputable real estate and relocation companies in the US. It places a high value on social purpose, supporting local communities and charities as well as emphasizing diversity and inclusion.
- Established for over 30 years, National Property Inspections brings experience and credibility to the inspection franchising market. Its services cover both residential and commercial properties, as well as specialist inspections for problems such as mold and radon.
- HomeTeam Inspection Service provides inspections of residential properties for buyers, sellers, and those involved in new construction. Emphasizing speed and accuracy, the company aims to schedule inspections in a single call and to provide a team of experts to quickly complete a thorough inspection.
Top Low Cost Franchise Sector #8: Maintenance Businesses
Maintenance businesses cover a broad range of services relating to the care and repair of properties. Everything from grout maintenance to irrigation to repairs to walls and roofs can fall under this category. It incorporates some broad groups of businesses, such as home repairs and lawn maintenance, as well as more unusual franchises.
What area of maintenance to get into is a matter of individual skills and interest, but it also depends upon what’s needed locally. Lawn maintenance is a concern in suburban neighborhoods with large gardens than in inner city residential districts. Grouting, though too specific to create a lot of different franchises, is universal enough to be relevant for almost any home.
The costs to get set up in a particular area of maintenance will depend upon the tools and materials involved.
- Despite the name, the Sir Grout business model covers more than the maintenance and replacement of grout: the company also restores tiles, stone, and wood. It’s a franchise that focuses on hard surfaces, to keep homes in good condition.
- Conserva Irrigation provides sprinkler and irrigation services for both residential and commercial properties. Given the nature of the business, there’s a seasonal element to the work, which focuses on efficient lawn irrigation through smart technology.
- Even before the COVID-19 pandemic, people were increasingly interested in cleaning as a way to create a healthy environment, and that’s where Bactronix makes its mark. The company gets rid of mold and bed bugs, cleans ductwork, and provides disinfection services.
Top Low Cost Franchise Sector #9: Residential Cleaning
There were 1,189 residential cleaning service franchise businesses in the US in early 2020, following years of persistent growth. The services offered vary, from one-off deep cleans to regular scheduled cleaning, but the principle is the same: saving residents the hassle of cleaning their own homes.
The industry’s growth has been driven by several factors. There’s an aging population that needs help around the house; a rise in dual-income households meaning there are fewer people at home to clean and tidy; and a growth in disposable income, which people are using to buy back time by not doing their own cleaning. As a result, there’s a far larger market for domestic cleaning services than there was two generations ago, and companies have emerged to fill that gap. Hiring a cleaner has become normal, not just something for the elderly and the wealthy.
Cleaning someone’s house is a very personal service, so it’s important to make the customer feel comfortable. Personal skills are almost as important as cleaning ones. Affluent urban and suburban locations have the best opportunities, but green services or deep cleans to battle germs can make a franchise stand out in many locations.
- The largest home cleaning franchise network in the world, Merry Maids was founded in the US and now has over 600 North American franchises. It offers a range of services, from regular cleans to a one-off thorough job after builders have been in.
- Founded in response to the disappointment of receiving inferior cleaning services, MaidPro is focused on providing a high-quality service at a reasonable price. The company values experimentation and continuous improvement, constantly striving for a better clean.
- Two Maids & A Mop is set on disrupting the residential cleaning industry through its unique incentive plan. Payment based on performance gives cleaners an incentive to provide the best possible service, and customers a way to reward a great clean.
Great Franchises Without Great Costs
Just looking at these nine sectors, you can see that there’s huge potential in low costs franchises, and plenty of variety to choose between. If you want to get into franchising but you don’t have a big budget to spend, then these are a great way to get started.