Starting your own business need not cost an arm and a leg. Here are some franchises that won't break your budget.
FRANCHISES HAVE LONG BEEN TOUTED AS great buys for new entrepreneurs because of their support services and long-term profit potential. Unfortunately, many come with a high price tag. For example, the start-up cost for a Wendy's restaurant is $250,000. Shoney's ranges from $1.3-$2.1 million. Though these prices may break the budgets for most start-ups, there are low-cost options for the would-be entrepreneur.
Since 1987, BLACK ENTERPRISE has provided a comprehensive list of franchise companies that offer the best opportunities for African American business owners. In the past, we've compiled various lists based on the number of black-owned units, quality support services, long-term profit potential and franchisee/franchisor relationships. This year we pinpoint franchise companies that continue to offer the most support for new entrepreneurs, but also those that are most affordable. BE's 15 Best Franchises list is based on a national survey of franchisors conducted by BE research and lists those that can be purchased for $50,000 or less. Other factors we considered included franchise fees, royalties and average sales per unit.
According to the Washington, D.C.-based International Franchise Association (IFA), there are more than 650,000 franchise units nationwide, with $800 billion in revenues. Coverall North America Inc., a cleaning franchise, is just one of many companies that offer low-cost options in the booming franchise arena and provide franchisees with a structure for success.
Dick Grummell, vice president of master franchise operations for Coverall in San Diego, says the company supplies franchisees with a starting base of customers and a guaranteed gross monthly revenue. The number of clients supplied and the monthly revenue vary according to the franchise purchase price. Coverall accepts down payments as low as $1,500 and will finance the balance of the franchise fee at a charge of 12%. "We also give buyers an initial package of equipment and cleaning supplies, and we handle all of their billing and collecting each month," says Grummell. In return, franchise owners pay the company a 5% royalty fee and a 10% business administration fee.
This kind of support lured Jesse Proctor to invest $5,000 in Coverall two years ago. "I bought a package because it was rated as one of the best franchises for African Americans," says...