Opportunity Jul, 21 2010

Low cost franchise endeavor

Tremendous spurt is seen among youngsters for entrepreneurship. Franchising in low cost opportunities is increasingly adding to this spirit. Explore below to know more

By Abha Garyali
Sub Editor
Low cost franchise endeavor

Low cost franchise businesses are gaining great success and growth with each passing day. Factors like less investment, high returns, and easy to manage are contributing to a large extent in the popularity of the low cost franchise businesses. Besides this the increasing desire among youth for owning a business has led to the franchise bandwagon gathering more speed and is sure to accelerate further in the coming years. In addition to this low cost opportunities appeal more to the many first timers and inexperienced small business owners who are afraid of investing their hard earned money. The article highlights the benefits of taking up low cost franchise opportunities in detail.

Low budget franchises

Generally franchises requiring low initial investment of less than Rupees 10 lakh fall under the low-cost category. There are many sectors which belong to this category especially in service industry. Dry cleaning, travel agencies and matrimony web portals are the top low cost service franchises. The most popular low cost businesses are run through kiosks in the categories of food, jewellery, chocolates, florists, home furnishings coffee, ice-creams, etc. Other than these opportunities home based franchises offer good low cost franchise opportunities especially for women entrepreneurs. Highlighting the benefits of low cost franchise businesses Ankur Gupta, CEO and Director, Brewberrys Hospitality Pvt. Ltd informs “Low cost franchise enables more sustainability and minimises risk for new and inexperienced franchisees.”

Benefits of low cost franchises

Elaborating on the reimbursements of low cost franchise businesses, Unitas Foods’ Director, Puja Mahajan, says, “Low budget franchises offer low risk, lower capital investment, and timely return on investment. It is also scaleable for its franchisees.”

Here we discuss these benefits and top reasons for investing in a low cost franchise opportunity for aspiring franchisees in detail:

Less investment: To begin with the most obvious reason for purchasing a low budget franchise is its affordability factor. In most cases, the low cost franchises are purchased by individuals using their personal savings. Therefore, time consuming efforts for securing bank loans etc can be avoided. Thus, franchisee can relax without any tension of the ever increasing rate of interest.

Easy to start: A low cost franchises do not generally demand too much stress on a perfect location and interiors of the outlets. Entrepreneurs who are involved in other occupations and even women and retirees can invest in such franchises as it minimises the time required to start a business.

Less operating cost: As compared to a high budget franchises, which requires a lot of expensive fit outs, equipments and merchandise, the low cost franchises can work well with minimum requirements. This also reduces staff requirement to handle the business. Moreover, low cost business opportunities can be home-based, which can save money on locations. This considerably reduces the overhead operating cost, thereby putting more profits in franchisee’s pockets.

Easy expansion: As mentioned above, the low cost opportunities offer more leverages to the franchisee in terms of lower operating cost. Therefore, with low investment and operating cost, the growth and expansion of such businesses is easier. For example, it is always easier for the franchisees to increase the number of kiosks (low cost) than start new outlets (high costs).

High profits: Big things come in small packages. This is especially true in the case of low cost franchises. Many entrepreneurs are of the view that investing in a high cost franchise is better as return on investments is higher. But the fact is that even low cost businesses can offer high profits to its owners.  Moreover these can offer more flexibility in terms of time. This could also provide franchisees with more free time to spend on other priorities in life including family.

Minimises risk:  Due to low investment, there is less of risk in venturing into this model for aspirants. The franchisees can easily invest in a low cost business without having the added tensions of its failure. The start-up cost can be guaranteed within a few months.

Increasing opportunities: With the increasing number of new entrants into the low cost zone, there has been a greater scope for franchisees to invest in any business of their interest.

To conclude it can be said that apart from the affordability factor, low cost businesses also offer an opportunity for young and aspiring entrepreneurs to cherish their dream of being a successful business owner. Thus, head on to invest in a low cost franchise!

Related: Get trained and join hands with the leader

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