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Cheapest Franchise to Open after a Corporate Layoff?

Getting laid off from a large corporation is a difficult situation. Despite the financial stresses of being unemployed, there is a unique opportunity to explore starting your own business and becoming a franchise owner. Years of corporate experience has given you the skills and acumen to identify good business opportunities and franchises. But when you’re starting from scratch, knowing which franchise brand offers the best return on investment is a major challenge.

In this article, we’ll detail the factors you should look for while exploring the best franchise by cost. We’ll guide you step-by-step through the best way to find the lowest cost franchises to open, and help you make an educated decision that will serve as the foundation of your success.

What Makes a Franchise Affordable?

Finding the lowest cost franchise requires an understanding of the many factors that go into the cost of entry. Start by considering these elements that will influence the overall cost of opening a franchise.

Initial Investment

Obviously, you’ll want to look for a franchise that has the lowest initial cost. Start by looking at the franchise disclosure document (FDD) to discover the franchise fee, minimum inventory, research and development fees, and any potential sales or use taxes. Add up these factors to know the total initial investment. Keep in mind that, depending on the franchise, you may require additional inventory stock to supply customers.

Ongoing Costs

It’s important to consider the ongoing fees associated with owning a franchise. Besides standard license fees, you’ll also pay various marketing costs, including royalty and advertising fees, and operational costs, such as sales taxes, hard costs, and employee wages. Make sure to factor in these additional costs when you’re reviewing the lowest cost franchises.

Financial Support

Many franchise systems offer prospective owners some type of financial support. Such assistance can include matching or servicing existing lines of credit, discounting the franchise fee, and acquiring financing to cover the initial cost. Depending upon the brand you choose, you may also have access to other direct or indirect financial support options.


The cost of opening a franchise will vary greatly depending on the location you choose. In a major market like New York City, the costs of opening a franchise will likely be much higher than they are in a small midwest town. Consider the potential return on investment (ROI) of opening a franchise location in a major metropolitan area versus an affordable rural area.

Shop Around

Now it’s time to shop around. Contact a franchise consultant or an International Franchise Professionals Group (IFPG) member to get a list of the top franchises under $50,000. Review the list to identify the franchises with the lowest initial investment cost, and then look at their FDD to determine their ongoing fees and other factors. Once you’ve narrowed down your choices, do your research to compare the ROI, understanding that the amount of time and money required to open a franchise may vary significantly.

Timing Is Key

One final note – you should not evaluate franchises solely on their entry cost. You may find the cheapest franchise listed on the IFPG website, but if the rest of the factors don’t line up, the cost-savings may not translate into success. Ensure that all elements of the franchise, such as industry demand, location, training, and operational support, check all the boxes before proceeding.

Once you’ve identified the franchise with the lowest cost, carefully review your options with your IFPG consultant to make sure you’re making the best investment for your situation. With the right research and advice, you’ll be one step closer to achieving the dream of owning your own business.


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