Franchises Under 20K

What is a Franchise?

Franchising is a method of business expansion. There are many benefits of franchising, for all parties involved, but one of the biggest benefits is it enables people, as an alternative to employment, to get into business for themselves but not by themselves. Franchising is where a brand’s owner will license out the rights to trade as that business to a third party.

A franchise is a business which follows the franchising principal, and a network may be made up of tens, if not hundreds or thousands of franchisees. The greater the franchise network’s size, the more reputable and established the brand will be.

Some top examples of franchises in the UK include McDonald’s, Wiltshire Farm Foods, Oven Clean, ChipsAway and Dial a Dog Wash.

Ranging from several hundred thousand right down to less than £20,000, these brands have all achieved UK-wide success thanks to franchising. Each of the franchisees are enjoying business ownership through use of a proven, profitable brand name – could you be a franchisee this time next year?

What will I get when I invest in a Franchise Under £20,000?

One of the biggest reasons people choose franchising for their journey to business ownership is the support. You’ll receive comprehensive training at the start of your journey (you may not need any past experience running a business either!) along with continued support. Franchising is a very well supported sector. Despite not being government regulated in the UK yet, the British Franchise Association provide a self-regulatory body for the franchising sector, whose members are the foundations of the success that franchising has grown to be here in the UK.

Depending on your franchise package, the £20k investment will usually include a website (or page on the franchisor’s website), marketing materials (such as leaflets, ads) and a launch marketing campaign (Google Ads etc) to establish prominence and get the first customers flowing. If the franchise is van based, the franchisor will help you source a suitable van and signwriting will often be included for the investment.

Thanks to the amount of support for franchising, banks favour this more secure route to business ownership, and are usually able to lend up to 70% of the investment. As a result, £20k investment franchises could be yours for less than £10k, enabling you to allocate more of your finances to working capital.

Are Franchises under £20,000 Profitable?

Generally speaking, all types of franchises are profitable. For a business to get to the point of franchising, the business model needs to have already demonstrated resilience in the market. The profitability of a business is very much up to its owner.

To gauge whether a franchise under £20k is profitable you should carry out due diligence. Explore the market in your own area and understand whether the demand is enough to enable a business to be profitable. Understand the competition and learn whether the demand is already met. Luckily, franchise businesses benefit from increased buying power, greater marketing (through an already recognised brand) and sizeable territories, meaning regardless of competition, the business should still be successful provided there is demand. But profitability of a franchise will strong depend on its owner. How much time can you commit? The more you put in, the more you’ll get out of owning a franchise.

Ultimately, when you’ve built up the business, you’ll be able to sell it as a franchise resale.