Top Franchises Under 20K to Buy [Best Opportunities in 2023]
Owning a franchise business has proven to be smart for entrepreneurs looking to gain financial independence but who don’t want to start a business from scratch. And you don’t have to start with a huge upfront investment to get your business up and running. There are plenty of options out there to buy franchises for under 20K and get started.
The top two franchises under $20,000 to buy are Dream Vacation and JAN PRO. With a $498–$9,805 franchise fee and a monthly royalty fee between 1.6 and 3%, Dream Vacation is the top franchise under $20k to buy. Another good choice is JAN PRO, which requires an initial investment of $4,005 to $56,000 and a 10% royalty fee.
In this article, we’ll help you with your franchise search by discussing some of the companies out there with affordable business opportunities. That way, you’ll learn about some of the most in-demand businesses that also provide ongoing support for franchisees (for under $20k).
What Are the Top Franchises Under 20K to Buy?
Some of the best franchises to buy for less than $20,000, with both the franchise and the initial total investment fee under $20,000, are as follows:
1. Dream Vacation
Dream Vacation is a franchise network made up of more than 300 vacation experts from the U.S. If you are a person interested in or specialized in planning the best vacation experience for people, then Dream Vacation might be a smart buy for you.
With a franchise fee of about $498–$9,805, an initial investment of $3,250–$21,855, and a monthly royalty fee of 1.6–3%, you can easily be a Dream Vacations owner with your own business.
Plus, working from home allows you to have a flexible schedule, so you can invest in more than one project at a time. For example, if you love animals, you may also want to consider pet sitting or dog walking.
2. JAN PRO
JAN PRO is one of the top leaders in the commercial cleaning franchise. JAN PRO has built a good reputation over its 13 years of existence in this lucrative industry. Their franchise fee is $2,525–$44,005, and their initial investment is $4,005–$56,005. You pay a monthly royalty fee of 10%.
FIT4MOM is a fitness company network that offers fitness training sessions to moms. They offer prenatal, postnatal, wellness, and health fitness programs for every mother ranging from their stage into motherhood.
With a franchise fee between $5,500 – $10,505, an initial investment between $6210 – $23690, and a monthly royalty fee between 3% – 4%, you can start your FIT4MOM franchise network under $20k.
Getting in on the ground floor of an up-and-coming business is a great way to increase your income stream over time. As the company’s name recognition grows, so will your business
Jazzercise is a fitness franchise company that offers services ranging from cardio kickboxing, pilates, resistance training, jazz dance, and yoga. Jazzercise workout sessions have been known to help both the body and muscles improve.
If you are passionate about fitness, you can consider Jazzercise’s stable franchise fee of $1,250 and their initial investment of between $9,005 – 38,005. The company royalty fee varies.
Jazzercise has gone from a small operation to a global network of fitness enthusiasts. If your professional motivations include health and fitness, this may be a great option for you.
5. Credit Repair Business
Start credit repair business today provides services to help improve individuals’ credit scores by challenging incorrect or outdated information on their credit reports. The services may include reviewing credit reports, negotiating with creditors and credit repair USA to have inaccurate information removed, and helping clients establish and maintain good credit habits.
It’s important to note that while these businesses may provide valuable support and advice, they cannot guarantee specific results or change an individual’s credit score overnight.
Credit repair business franchise fee of $1900 and their initial investment of between $8,550 – $27,100. The franchise fees vary.
Other Franchises Under $20k to Be Your Own Boss
|Franchise Fee||$10,000 – $1,000,000|
|Initial Investment||$37,505 – $1,149,901|
|Liquid Cash Requirement||$50,000 – $150,000|
|Royalty Fee||It Varies|
2. The UPS Store
|Initial Investment||$138,435 – $460,035|
|Liquid Cash Requirement||It starts from $75,000|
3. Great Clips
|Initial Investment||$136,905 – $259,400|
|Liquid Cash Requirement||Starting from $50,000|
4. Taco Bell
|Franchise Fee||$25,000 – $45,000|
|Initial Investment||$527,000 – $2,622,401|
|Liquid Cash Requirement||Starting from $750,000|
5. Kumon Math & Reading Centers
|Initial Investment||$74,432 – $156,701|
|Liquid Cash Requirement||Starting from $70,000|
|Royalty Fee||It Varies|
6. Anytime Fitness
|Liquid Cash Requirement||Starting from $100,000|
|Royalty Fee||$449 – $549 Monthly|
7. Ace Hardware
|Initial Investment||$280,000 – $2,000,000|
|Liquid Cash Requirement||$250,000|
|Royalty Fee||No Royalty Fee|
8. Planet Fitness
|Initial Investment||$968,100 – $4,178,001|
|Liquid Cash Requirement||Starting from $1,500,000|
9. Snap-on tools
|Initial Investment||$172,209 – $375,267|
|Liquid Cash Requirement||$40,000 – $55,405|
|Royalty Fee||$135 Monthly|
10. Pillar To Post Home Investment
|Initial Investment||$37,105 – $45,900|
|Liquid Cash Requirement||$10,000|
Things to Know Before Buying a Franchise
You are not in control: As a franchisee, you do not have a say in how the business runs and operates. You will have to simply implement and follow the already laid down rules by the business. So if you have problems following instructions, franchising might not be for you.
Study the Franchise Strategy: It is essential to have a standard knowledge and understanding of how the franchise business strategy works to avoid putting your money in a sinking ship.
Passion and Experience for the Industry: While you may not be fully in charge of the business runnings, you will be in charge of the daily activity in your store. It is best advised to purchase a franchise in an industry you have experience in or are passionate about. This will help you run a successful store and avoid any problems that may arise in the business.
Enough Financial Liquidity: Franchising businesses do not always kick off from the start. You’ll need to budget for your advertising spending and have the cash required for dream vacations to keep your business afloat. Franchise opportunities sometimes require a minimum of cash on hand, which you’ll also need to consider.
Make Research from Other Franchisees: This is very important. Endeavor to reach out to franchisees working under the franchise business you want to buy from and make inquiries from them. Speak to as many people as possible.
Thoroughly Read Through the Documents: Never make the mistake of not thoroughly reading the necessary documents. It is best advised to get professional help to assess all sections, but you should also read to understand what you are getting into. You should understand all components of the franchise agreement and have an attorney review it as well.
FAQs On Top Franchises Under 20K to Buy
Can I Start a Business with 20K?
Yes, it is possible to start a business with $20K. The amount needed to start a business depends on various factors, such as the type of business, location, and overhead costs. With careful planning and cost management, you can start a small business with $20K.
What’s the Easiest Franchise to Open?
It depends on individual factors such as experience, available capital, market demand, and personal preferences. However, some franchises are often considered easy to open due to low barriers to entry and streamlined processes. It’s important to thoroughly research and evaluate the franchise opportunities before making a decision, as every franchise system is unique and has its own set of requirements and challenges.
Do Franchise Owners Get Rich?
Franchise owners can become wealthy, but it is not a guarantee. Owning a franchise is a business and requires hard work, dedication, and a strong understanding of the market and industry. Some franchise owners may become wealthy, while others may struggle to achieve profitability.
Why Do Most Franchises Fail?
There are several reasons why most franchises fail:
- Lack of capital or poor financial management
- Inadequate research and preparation
- Poor location selection
- Inadequate training and support from the franchisor
- Failure to adapt to market changes
- Lack of operational systems and processes
- Over-saturation in the market
- Poor customer service and brand reputation
- Owner’s lack of business experience
- Failure to maintain consistent branding and marketing.
Is Owning a Franchise Stressful?
Owning a franchise can be stressful because:
- Financial responsibility
- High investment and ongoing costs
- Constraints on decision-making and business operations imposed by the franchisor
- Competition from other franchises and independent businesses
- Pressure to meet franchisor’s performance expectations
- Responsibility for employee management
- Need to adhere to strict brand standards and guidelines.
Is It Better to Own Or Franchise?
Whether you should buy a franchise or start your own business depends on several factors. It is important to carefully weigh these factors and consider personal strengths and weaknesses, financial resources, market conditions, and long-term goals before making a decision.
Can a Franchise Lose Money?
Yes, a franchise can lose money. The failure rate of franchises is similar to that of independent businesses. To avoid losing money, franchise owners to carefully research potential franchise opportunities, fully understand the financial projections and risks involved, and be prepared to effectively manage their business to minimize the risk of financial loss.
What is the Failure Rate of a Franchise?
The failure rate of franchises varies and can be difficult to determine accurately. However, approximately 20% of franchises are estimated to fail within the first 5 years of operation. This failure rate is similar to that of independent businesses and can be attributed to a number of factors, including poor market research, inadequate capital, financial mismanagement, competition, failure to adapt to market changes, poor quality products/services, and lack of operational systems and processes.
Is It Safe to Invest in a Franchise?
Investing in a franchise can be safe. Like any business investment, there are risks involved. To minimize the risk of financial loss, it is important to thoroughly research potential franchise opportunities, fully understand the financial projections and risks involved, and seek professional advice from accountants, lawyers, and other advisors as needed.
Top Franchises Under 20K to Buy: Final Words
Buying investment franchises can allow you to start making profits right from the start. You won’t have to worry about advertisement or logistics if needed; you just have to put your money into the business and get your store open. Then, the franchisor’s local business’s reputation will bring you profits and financial success in due time without having to break the bank.
The key is choosing the right franchise for you and your location. Small businesses, local businesses, and work-from-home businesses all have different demands and needs that will impact your profitability. The goal is to create high-quality business relationships with your customers and clients to generate lasting revenue for your company.