8 Low-Cost Franchises for Hard Times

Laid off or having trouble finding a job? Tired of working for somebody else and looking to start a business of your own?

Being one’s own boss is the dream of many Americans. But few have the wherewithal to come up with a viable business plan and the start-up money needed to be successful. That's where franchises come in.

SEE AS A SLIDE SHOW: 8 Low-Cost Franchises for Hard Times

Sure, buying into a franchise with a well-known pedigree can be daunting: Many top brands require a lot of capital up front and a strong business background.

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But we’ve found eight growing franchises that have relatively low start-up costs and are available to first-time business owners.

All provide essential services that are likely to remain in demand through good times and bad. And most can be run from home.

Home Instead Senior Care

Product/service: Nonmedical senior home care

Franchises in the U.S.: 609

Growth in franchises: 8.9%

Net worth requirement: $100,000

Royalty: 5%

Franchise fee: $39,000

The need for senior care is expected to rise with the aging of baby boomers. Omaha, Neb.-based Home Instead provides assistance to seniors who want to remain independent and in their homes. Franchisees help with myriad tasks, ranging from opening mail to trips to the doctor, the store or the nail salon. "CAREGivers" also work with clients in assisted living and nursing homes, as well as with Alzheimer’s patients. The franchise, operating since 1995, is now in 14 countries outside the U.S.

If providing companionship and nonmedical care to seniors appeals to you, Home Instead Senior Care provides a strong level of support to franchisees just starting up.


Product/service: Supplemental education

Franchises in the U.S.: 262

Growth in franchises: 106%

Net worth requirement: $75,000-$80,000

Royalty: 10%

Franchise fee: $27,500

If you like numbers and working with kids, Mathnasium may be worth a look.

With local school districts throughout the country trying to cut costs, parents are turning to outside sources to supplement their children’s education. The private tutoring sector grew nearly 40% during the recession, demonstrating that parents will spend on their kids even during tough times.

Mathnasium tutors children year-round, exclusively in math, both in after-school sessions and on the weekends. The centers work both to engage kids and help them to boost their overall math skills by teaching concepts ranging from basic math to pre-calculus.

Los Angeles-based Mathnasium differs from many other tutoring franchises because it specializes in one subject. The firm has been franchising since 2003.

Heaven’s Best

Product/service: Home and office cleaning

Franchises in the U.S.: 1,251

Growth in franchises: 0.2%

Net worth requirement: $60,000 ($15,000-$20,000 in liquid assets)

Royalty: $80 flat per month

Franchise fee: $28,900

With a promise to clean carpets fast, Heaven’s Best eschews the typical water-extraction approach, relying instead on its own "dry in one hour" technique. Franchisees also clean upholstery, area rugs, leather, tile and grout, and hardwood floors in private homes and commercial establishments. Franchises from the Rexburg, Idaho, firm are available in the U.S., Canada and England.

Franchisees benefit from a low fixed royalty rate that allows them to keep more money in their pockets. The $28,900 franchise fee also includes all basic costs, such as equipment, training, supplies and cleaning solutions. But franchisees must own their own white cargo van (model year 2000 or later) and buy cleaning products from the franchisor. While the business can be run by one person, many successful franchisees hire a team of employees to operate several vans in their area.

Heaven's Best has been franchising since 1983.


Product/service: Restoration of plastics and leather

Franchises in the U.S.: 100

Growth in franchises: 127%

Net worth requirement: $100,000

Royalty: $550/month, commencing in the seventh month

Franchise fee: $65,000

Given the tough economy, more and more people opt to repair or refurbish their furniture and other belongings instead of shopping for replacements. The trend favors a franchise like Fibrenew, which restores plastics, vinyl, leather, fabrics and upholstery in cars, homes, boats, planes and commercial buildings.

The Canadian company, based in Calgary, Alberta, provides training, tools, chemicals and equipment, and franchisees sign a five-year contract that gives them exclusivity in a specific territory. They've been franchising for over 25 years.

Fetch! Pet Care

Product/service: Pet sitting and dog walking

Franchises in the U.S.: 165

Growth in franchises: 11.5%

Net worth requirement: $25,000

Royalty: 5% and 1.5% brand development fee

Franchise fee: $15,000 for a 50,000-household protected territory

Recession or no recession, people love their pets, and will pay good money for their care, including shelling out for walking and sitting services when they’re away.

Fetch! Pet Care franchisees take care of all kinds of pets — dogs, cats, birds, even spiders. They aim to have background-checked walkers and sitters available whenever pet owners need them. The Walnut Creek, Ca.-based firm also provides services such as puppy training and yard cleanup.

Besides getting the chance to bond and play with lots of critters, franchisees can operate from their homes with a flexible work schedule. And the pet care industry continues to grow as Americans work longer hours, needing help to keep Scruffy and Chuckles happy at home. Fetch! has been around since 1994.

i9 Sports

Product/service: Youth sports

Franchises in the U.S.: 133

Growth in franchises: 35%

Net worth requirement: $100,000

Royalty: 7.5% of gross revenue

Franchise fee: $19,900

i9 Sports organizes local sports tournaments, leagues, after-school programming and camps. Franchisees are in charge of coordinating logistics for specific neighborhoods or other geographic areas.

Among the inexpensive, extracurricular activities offered: flag football, basketball, soccer, cheerleading, lacrosse, baseball/softball, golf, volleyball and hockey. The franchises can be home-based, saving their operators time and money while also providing flexible work hours.

With many local governments strapped for revenues and forced to cut back on recreation programs, i9 Sports, in business since 2003, is well-positioned to growth. There are already franchises in 25 states. The Tampa, Florida-based company offers national and regional media/advertising support, initial training for new franchisees, continual refresher courses and informational webinars.

Simple Simon’s Pizza

Product/service: Pizza, calzones and sandwiches

Franchises in the U.S.: 220

Growth in franchises: 10%

Net worth requirement: $100,000

Royalty: 3%

Franchise Fee: $15,000

Simple Simon's serves pizza, calzones and sandwiches in a casual kid- and family-friendly dining environment. Such low-cost food franchises have done relatively well during the downturn: alongside burgers, pizza is the most popular food to franchise.

What sets Simple Simon's apart? For one, its franchising fee is way below those of other fast food restaurants. Moreover, its franchising requirements are more conducive to newcomers. Unlike many of the larger restaurant franchises, it doesn’t require its would-be franchisees to already own other restaurants.

Pro Energy Consultants

Product/service: Energy auditing and conservation

Franchises in the U.S.: 51

Growth in franchises (2009-11): 350%

Net worth requirement: $100,000

Royalty: $500 flat per month for the first two years, then $800 per month

Franchise fee: $29,900

With high heating and cooling costs and growing consumer interest in energy conservation, Pro Energy Consultants shows homeowners and commercial landlords how to lower their monthly utility bills.

The Cleveland, Ohio-based franchise does energy-use audits to help people better understand the energy needs of their homes and businesses, as well as how to save money with moves such as replacing windows or insulating against drafts. Franchisees also conduct thermal scans in workplaces, aimed at preventing electrical fires and meeting environmental safety codes.

Franchisees are provided with marketing assistance and also are trained to present informative energy-saving seminars in their communities, adding to their visibility and reputation. Pro Energy has been franchising since 2008.

Neema P. Roshania
Researcher-Reporter, The Kiplinger Letters