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The Most Profitable Franchises to Open for Recent Retirees

Retirement is a much-anticipated moment in life. After working hard for decades to build up a successful career, many people look forward to taking a break and having the opportunity to relax and enjoy life.

Yet, some who retire find themselves wishing to stay involved in the business world. Investing in a franchise can be an excellent way to stay engaged and to capitalize on a great business opportunity in a relatively low-cost way. The International Franchise Professionals Group (IFPG), is a membership-based franchise consulting network with more than 1,300 franchisors, franchise consultants, and vendor members. Here we provide an overview of frequently asked questions on the most profitable low cost franchises to open for recently-retired individuals.

What are Some Low-Cost Franchises?

The amount of money an investor needs to put up depends on the franchise. If the individual is looking for a franchise in an industry with low startup costs, some of the best options include:

  • Food transportation services such as Subway, Subway Refrescos, or Steak ‘n Shake
  • Small and local restaurant chains such as Papa John’s Pizza or Jimmy John’s Gourmet Sandwiches
  • Home improvement services such as Window Genie or Mr. Handyman
  • Coffee shops such as Starbucks, Caribou Coffee, or Peet’s Coffee
  • Health and beauty services such as Massage Envy or Paul Mitchell
  • Fitness and health centers such as Planet Fitness or 24 Hour Fitness

What Benefits come with a Low-Cost Franchise?

Investing in a low-cost franchise comes with a variety of benefits. One of the most significant benefits is that these franchises tend to require fewer resources, meaning an individual’s time and money won’t necessarily be tied up in the business as it grows. Another significant benefit is that these types of franchises usually come with fewer requirements and regulations than more expensive, larger franchises, such as McDonald’s.

In addition to the cost benefit, franchises offer investors access to a well-known brand name. This allows a business to start out with immediate recognition and customers who already have an established trust in the franchise brand. Further, with an already established brand, a business won’t need to put as much effort into marketing and growth.

What are the Most Profitable Low-Cost Franchises?

It is important to consider the overall cost of the franchise, not just the initial investment, when determining which is the most profitable. Factors like the potential for growth, customer base, and the franchisor’s fees should all be considered.

Subway is a well-known and popular example of a low-cost and profitable franchise. With an initial investment of approximately $85,000, an owner can access the brand name, training, marketing, and support systems. After the initial investment, Subway’s franchising fees are 6 percent of gross sales. The brand also provides regional marketing initiatives and a proprietary app to support its franchises.

For a slightly lower initial investment of approximately $50,000, a business person can partner with Peet’s Coffee for a new location. This franchise also provides training and support for entrepreneurs. The brand is a good choice for entrepreneurs who are interested in being involved in the coffeehouse industry.

The initial investment for Mr. Handyman, a home improvement franchise, is even lower at roughly $45,000. This franchise provides comprehensive training, marketing, and support and long-term growth potential. It also is an attractive option because the home repair business is not seasonal, meaning the business can be profitable all year round.

What Do I Need to Consider Before Investing in a Low-Cost Franchise?

Before moving ahead with any franchise, it is important to consider all of the necessary components of making an informed decision. Potential investors should be mindful of the franchisor’s reputation, the right business location, the franchisor’s requirements regarding the management of employees and marketing expenses, and the financial information provided by the franchisor.

Business owners also should pay attention to the terms of the franchise agreement as outlined by the franchisor. The agreement should include specifics regarding the franchisor’s obligations to the franchisee and the timeframe for these obligations to be fulfilled.

Finally, it is wise to do due diligence when selecting a franchise. The IFPG provides experienced franchise and business consultants to help potential investors determine which franchise may be the best fit for their skills, budget, and interests.




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