Earlier this week it was reported that several states had experienced a decline in the number of franchisors registering to sell franchises. Most people blame that on the tottering economy and the fact that fewer people are interested in buying a franchise.
Is the current state of the economy keeping you from buying a franchise? Do you think franchises are just too expensive to invest in? If you answered “yes” to those questions, perhaps it’s time to reconsider.
Several franchisors are offering financial incentives to new and existing franchise owners. Pizza franchise Papa John’s, #42 on the AllBusiness AllStar Franchise Ranking, just announced they’re waiving royalty fees for a year for existing franchisees who open a new restaurant in the next few months. Papa John’s is also waiving the intial $25,000 franchise fee for new franchise buyers who open a location by December 27th.
Another pizza franchisor, Marco’s Pizza (#48 on the AllStar ranking), while scaling back its growth plans for the year, says the recession has enabled the company to reduce the startup costs of a unit by 25-30 percent.
While the International Franchise Association (IFA) reports the average cost of opening a franchise is between $350,000-$400,000, there are plenty of franchises available for a lot less. You can explore the AllBusiness AllStar Franchises list of Top 10 Low-Cost Franchises or use the Franchise Finder to sort companies by liquid capital or net worth required.
Now could actually be a good time to buy a franchise. Many franchisors are offering concessions to incentivize prospective buyers. And your other costs, like the price of buying or leasing real estate, technology or motor vehicles are likely to be a bit lower right now. So if you’re interested in buying a franchise, don’t let the recession keep you from that pursuit.