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Can You Get a Food Franchise Under 50k?

By: Bill Bradley

 

Young female barista taking order by mobile phone and digital tablet standing behind bar counter while talking with customer on mobile phone at cafe restaurant. Owner small business concept.

Owning a fast food franchise can be one of the best ways to become a successful entrepreneur. Luckily, there are over 750,000 franchises in the United States alone. You may be thinking that it could take a lot of capital to invest in one of these franchises. What if you could invest in a food franchise for under 50K?

This guide will go over how to become a franchise owner and what franchise opportunities are available for a reasonable amount of capital.

Benefits of Franchises

Before we can go over some of the franchise opportunities available to you, it is important to know why it is worth investing in a franchise in the first place. Some of the biggest benefits include:

Brand Recognition

One of the immediate benefits of owning a fast food franchise is the fact that you get brand recognition. Depending on what area your franchise is located in, your target audience has likely eaten at another franchise location before.

This is important because it can help you establish immediate trust with your target audience. About 46% of people will pay more to shop with a trusted brand. In this case, that could mean charging a couple of bucks more for a fast food meal than a local business of the same caliber may be able to get away with.

As a result, this is likely to boost the income for most franchise fast food restaurant owners. Statistically speaking, consistent branding tends to increase revenue by 20%.

The brand recognition that franchises can offer allows you to increase your chances of getting an immediate return on investment. Some people would argue that it is also a safer bet than trying to start your own restaurant.

So, for those of you who want to be an entrepreneur while minimizing your investment risk, the brand recognition available here could be exactly what you need to get started.

Assistance

Another big benefit of investing in a fast food franchise is that you have help from people higher up. Corporate brands tend to want to do everything they can to protect their brand.

As a result, they are likely to provide you with the resources that you need to get your individual location up to speed with their other franchises. That can include designing the restaurant in their image, giving you the food supplies that you need, going over franchise policies that help make the franchise what it is, and more.

If you are intimidated by the idea of starting a business on your own, know that you do not have to. If you get approved to run a franchise location, you will receive some assistance from corporate to get started.

Familiarity

Going off of the above, a franchise offers more familiarity. With this, you do not have to create a culture from scratch or even a brand from scratch. The logo already exists, the colors already exist, and what the company stands for is already well established.

Instead of coming up with all of this before you open your business, you can focus on your physical location being in the best shape possible before you open your doors.

This is especially important for people who have never run a business before. The paperwork that can be involved with running a store like this can get intense.

Luckily, there are corporate policies in these franchises already in place before you even invest in a franchise. This makes it more of a turnkey operation and you can get set up for success faster.

For those of you who could use some familiarity, this is likely going to be your best option for it if you want to be an entrepreneur.

Investing in a Fast Food Franchise

Now that we have gone over some of the benefits of investing in a fast food franchise, it is time to discuss how you do that. These are some of the most important things you need to keep in mind if you want to become a franchise owner.

Applying

If you want to own a fast food franchise, you are likely going to have to apply to be an owner. Because these fast food chains have a brand to protect, they are not just going to let anybody own a franchise.

You have to be trusted to run it efficiently and show that you have the capital to get started. Also, having a good business plan and a clean criminal background will help you here.

Do what you can to show that you are a reliable person to hand the keys of one of their stores to. If you do not think you are this type of person yet, work on this before applying to own a fast food franchise.

Securing Capital

As discussed above, you are going to need some working capital to get started with a franchise. Most franchises have a franchise fee to secure the rights to one of their stores.

How much it will cost to own a store for a particular franchise very much depends on how popular that brand is. For example, it is likely going to cost you more money to own a McDonald’s than it will to own a less familiar hamburger fast food chain.

Start by determining what the floor is to own a fast food franchise. In this case, we can assume that there are some out there that you can own for less than $50,000.

If you do not have this much money, you may be wondering how you can secure this capital. Well, you have a few options to do this.

The first option you have is to find a co-signor. This can be a family member who will be responsible for the remainder of the capital should you fail to come up with it. For this type of arrangement, it is best to have a strong bond with the other person before taking this step.

The other option you have is to find an angel investor. This is someone who can provide you with the startup capital that you need to secure a franchise. This investor will likely let you run the franchise in return for owning a percentage of that store’s location.

Think about the options you have for this and go from there.

Having an Emergency Fund

While securing capital can get you started, know that you are likely going to need some additional funds outside of this. That is because when you own a business, it is likely that an unexpected expense is going to come up.

What if someone slips and falls in your restaurant? What if your entire HVAC system needs to be replaced? What if your roof gets damaged after a major storm?

These are things that are difficult to anticipate. However, you have to expect the unexpected when you own a business. If you fail to do this, you risk going bankrupt.

About 82% of businesses that fail in the United States do so because they run into cash flow problems.

What can you do to avoid this? You can establish an emergency fund. This emergency fund should be enough to cover a major unexpected expense. More importantly, it will keep your business afloat while you are facing difficult times.

This is one of the most important aspects of financial planning for a business. Take the time to set this up before you jump into franchise ownership.

Fast Food Franchise for Under 50K

Now that we have gone over the benefits of owning a franchise and what it takes to secure a franchise, we can start diving into the franchises for sale. For those of you who have less than $50,000 available to invest in one of these franchises, know that you still have options.

Here are some of the best opportunities that we have to offer for you:

Yumberry Bowl

For those of you who believe in the growth of healthy food options, this may be a food franchise that you can get behind. This is a franchise that mainly offers fruit bowls, yogurt bowls, and fruit shakes.

There are also plenty of options for those that have certain dietary restrictions. These include, but are not limited to, options with no gluten, no dairy, no sugar, along with vegan options.

As a result, this is a food chain that encourages healthy alternatives compared to what you may see from a typical fast food chain.

The best part is that it costs less than $50,000 to invest in this food chain. Right now, the cash required to get in on this one is about $45,000.

This may be something to consider if you are an ambitious entrepreneur who believes in healthy eating trends. Considering that about 50% of Americans are actively trying to do so, it may be something worth noting.

Kwench Juice Cafe

Another similar option to the above is this juice cafe franchise. Unlike the Yumberry Bowl, this one focuses more on fruit juice options. However, it does offer healthy bowl meals to snack on as well.

Some raw fruit juices that this franchise uses include pears, apples, grapefruits, oranges, and more. For those of you who want to have a little fun with this, there are also juice shots available to purchase.

Most bowls available to eat are mixed with fruits and vegetables. You can even create your own bowl if you prefer something more customized.

Because of the trend mentioned above about Americans trying to eat healthier, this could be another good way to give Americans more access to these options.

The capital required for this franchise sits right around $50,000.

Hard Bean Coffee

Are you a believer in having a fresh cup of coffee to start your day? If so, Hard Bean Coffee could be the perfect franchise for you to invest in.

While the main focus of this franchise is to offer a fresh cup of coffee made from quality coffee beans, it is not the only thing on the table for this franchise. You can get iced coffee from one of these locations along with good pastries to start your day right.

This can be a very beneficial franchise to own if your location is somewhere with a large amount of people commuting to work. It can become a place where people stop for coffee and a snack to get the energy that they need to start their day right.

The capital required to invest in this franchise also sits at around $50,000.

Nashville Hot Chicken

You may be someone who believes in the popularity of chicken. However, you do not have to invest in a Kentucky Fried Chicken or a Chik Fil-A to get started.

For a fast food chain with a little more upside, Nashville Hot Chicken is on the table for you. The city tends to have a great reputation for this type of food and they are willing to spread the love throughout the entire country.

If you love the idea of bringing Nashville chicken to other parts of the United States, this could be the perfect opportunity for you. Right now, the capital requirement for this fast food chain also sits at around $50,000.

Jon Smith Subs

Finally, as an alternative to the likes of Subway and Jersey Mikes, you have Jon Smith Subs available for purchase. This is a fast food franchise that has been around for more than 30 years.

They can deliver quality subs for an area that is craving what that tastes like. The best part is that you can get involved with this franchise for about $50,000.

Become a Franchise Owner

This is everything that you need to know about becoming an owner of a fast food franchise. Know that they are out there for the taking at an affordable price.

You get the benefits of brand recognition and assistance from corporate out of the gate. Just work on securing the capital needed before you jump into this.

Luckily, the food franchises above all allow you to invest in a food franchise for under 50K.

Do you want to know more about this? Click here to view all of our opportunities.

Published: June 12, 2024
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Source: America's Best Franchises

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Bill Bradley

Bill Bradley

Bill Bradley is founding member and CEO of America’s Best Franchises, LLC.  Bill founded three financial services firms, Ocean Shores Ventures, Denali International and William Bradley Enterprises. In addition, to launching America’s Best Franchises in 2005, Bill orchestrated approximately 20 private equity transactions in excess of $31 million, and launched five specific purpose private equity partnerships.

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