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Franchising On A Budget: How To Do It

Franchising with limited funds might not be easy, but it is possible with these five steps.

While franchising offers entrepreneurs a way to own a business with a proven model and support system, the initial costs can sometimes be a bit overwhelming. However, there are ways to start a franchise without spending a fortune. 

In this guide, we'll look at some strategies for franchising on a budget, from choosing a low-cost brand to understanding expenses and more.

Pick a Low-Cost Brand

When looking for a franchise on a limited budget, start by checking out low-cost brands. These could be home-based or service-based franchises that require less upfront investment compared to retail or restaurant franchises. Do your research to find franchises that fit your budget and match your interests. 

“Vending is a classic model to implement when funds are not available for a traditional location business,” Colleen O'Brien, owner of Franchise For You Consulting, told 1851 Franchise. “Once placed, servicing the machines can be on demand, within reason. Most home-based businesses allow a rapid start-up and lower overhead costs.”

Check out our list of low-cost franchises to get you started. 

Understand Costs and Set Expectations

Before signing anything, make sure you understand all the costs involved. This includes the initial franchise fee, ongoing royalties, marketing fees, and other expenses like equipment and inventory. Take a close look at the franchise disclosure document (FDD) to uncover all potential costs. 

“It’s important to understand the expectations,” Praful Mittal, the CEO of WIN Home Inspection, told 1851 Franchise. “You need to understand the cost structure, how long it takes to get your business up and running, and monthly costs.”

Mittal also emphasized that franchising is a “partnership between the franchisee and the franchisor,” explaining that each party needs to do its part in order for the business to be successful.

“Entrepreneurs need to be brutally honest with themselves,” he said. “Don’t start a business if you can’t fend for yourself. You need to ask yourself how willing you are to roll up your sleeves and actually work hard to get the business up and running.”

Explore Financing Options

If traditional financing isn't an option, consider alternative ways to fund your franchise. This could include using personal savings, family loans, peer-to-peer lending, or Small Business Administration (SBA) loans. Some franchisors even offer in-house financing or partnerships with third-party lenders to help franchisees finance their investment. Explore all your options to find the best fit for your budget.

Maximize Efficiency

Running a franchise efficiently is crucial, especially when you're on a budget. Focus on streamlining operations, minimizing waste and making the most of your resources to keep overhead costs low. Franchisees should also be efficient with their time and decide how much of it they actually have to spend on a franchise operation.

“Entrepreneurs on a limited budget need to evaluate the time they can realistically devote to a business,” O'Brien said. “The less you spend, the more time that is likely required.”

Use technology and automation tools to improve productivity and reduce manual tasks. Invest in employee training to ensure everyone is working efficiently and delivering great service. By running your franchise efficiently, you can maximize your profits even with a limited budget.

Build a Support Network

Building a support network is essential for franchise success, especially when you're on a budget. Connect with other franchisees in your brand or join industry associations and networking groups to share ideas and best practices. Take advantage of the support and resources offered by the franchisor, including training programs and marketing support. By building a strong support network, you can navigate challenges more effectively and increase your chances of success.

“Franchising can be an effective way to invest funds into a business due to the support, marketing and processes already in place,” said O'Brien.  “This can be perceived as a higher cost, when in fact the new franchisee can be up and running quickly and focusing on revenue generating activities. That is more important than spending hours on a logo and a website that would already be created.”

Franchising on a budget requires careful planning and resourcefulness, but it's definitely possible. With the right approach and determination, starting a franchise — even with limited funds — can be a rewarding and profitable venture.

Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit and start your journey.