Low Cost Franchises Lead To High Returns

A low cost franchise can lead to some rewarding returns for the franchisee.

SPONSOREDUpdated 12:12PM • 01/07/16

As the prospective franchisee peers down at the sets of dotted lines in front of them, the pen in their hand may start to tremble. Their options with the brand may be laid out and their research is complete, but they may be thinking to themselves that even though the initial investment is great, will the payout be greater?

Not necessarily. True, even the most educated franchisee falls victim to these assumptions. A business-minded individual may deem this the arbiter of their decision, and just make the easy choice without looking into lower-cost options. This person may be business-minded, yes, but are they being narrow-minded?

“In our case, a low cost franchise means low investment, low operating costs, and fewer people to manage,” Kevin Wilson, chief executive officer of mosquito control treatment provider Mosquito Joe* explained regarding the benefits of franchising with lower cost franchise like his own.

The lower initial investment is a clear advantage, but they may have some additional questions. They may wonder if this low initial investment will mean low benefits, as well as higher costs elsewhere down the road. However, Wilson assures franchisees that this is not the case.

“Typically, low cost franchises can be operated from the home, which allows for lower fixed costs and lower investment, which in turn helps to drive the return on investment,” he said.

Over time Mosquito Joe, similar to other brands, has continued to raise its franchise fee, but maintains its position on the lower end of franchise costs. Wilson explains that these increases happen as business models are developed overtime, and as existing franchisees demonstrate success.

Franchises that begin in the lower ballpark of initial costs do usually remain there. However, Wilson explained that it is of course important to weigh your options when determining your choice of a low cost franchise. There are four specific questions that Wilson feels hopeful franchisees should ask themselves before signing that dotted line:

1. What am I passionate about doing?

2. Do I like managing people or do I prefer a concept requiring a minimum number of employees?

3. How much can I afford to invest in a franchise?

4. Do I prefer an “office” environment or do I prefer to be outside?

These questions are relevant when choosing to franchise with any brand, but are especially important when looking over initial costs.

Initial investments are just that – initial. They are in no way the determining factor of monetary success a franchisee has with a brand. This lies solely within the individual and the decisions they make after that initial investment – the time they choose to devote, the team they choose to build, and the leader they choose to be.

In short, don’t forget the little guy.

*This brand is a paid partner of 1851 Franchise. For more information on paid partnerships please click here.