3 Major Challenges When Investing In Low Cost Franchises

By Adrian Hines

If you are thinking of investing in low cost franchises I want to share with you 3 major problems I've seen entrepreneurs face. My goal is just to make you aware of them so you can always hope for the best and expect the worst.


Being an entrepreneur myself I've worked with a major franchise company in my area. I got to see things from the business side and I was so glad that I did. The guy that I was partnered with was very savvy when it came to business and he had a big heart.

He was also cheap when it came to spending money and I understand why. As I was helping him from the marketing aspect I was able to from a certain extent put myself in his shoes and see what it feels like to run a franchise.

During my partnership with the gentleman I started to take note of the challenges that many low cost franchises come across. In this article I'll list the top 3 that I've discovered.

1. Coming up with the start up capital

Don't let this one fool you. Although you may have been looking for low cost franchises, franchises are not cheap. Even on the low side, to invest in a quality company and product you can expect to spend $10,000+. That's on the low end. And trust me you will never get a loan for just the initial amount. You want more as a cushion.

What many may not realize is that in this day and age it can be very challenging getting a business loan for that amount, especially if you don't have the cash laying around. Not only that but let's just say you get a loan for around $50,000 to run a well known tax franchise.
The pressure that comes along with paying back the loan, making sure that employees are paid, franchise fees, overhead, etc can be too much. Too much to where you are not enjoying your business. If you are not having fun then whats the point in owning a franchise right?

2. Marketing

It's sad to say but a lot of brick and mortar business owners are still stuck in the stone age with their marketing. They are using Yellow Pages, coupon mailers, tv advertising, radio ads, and telemarketing. I'm not saying those methods don't work, they do. It's just that there is a more effective way of getting the word out. Not only that but what I've just mentioned is extremely costly.
Advertising costs alone can cause any "low cost franchises" to go out of business quickly. You will be amazed at how many people just spin their wheels and follow what corporate says because they've been doing it a particular way for such a long time.

3. Not enough clients

This obviously stems from problem #2. When your marketing is not effective and too costly it's a no brainer that you won't have enough clients. So what happens? Franchise owners go and try to borrow more money to pay for more advertising that is draining the bank in hopes of getting more clients. It's a perpetual endless cycle until the money finally runs out.
Now I am not saying this is what happened to the gentleman I was partnered with. As a matter of fact he had a pretty good business running. However in our conversations about his business and other franchise owners that he knew I read in between the lines.
At this point you are probably nodding your head that what I'm saying makes sense. But you could also have this feeling OK what's next? What else can I do.
That's a very good question.

What if I told you there is a way for you to live the dream life you want, without all the overhead, stress, loans, or advertising headaches that comes with owning low cost franchises.
What if I told you that it's possible to earn a lucrative full time income just using a laptop, without picking up the phone, having any technical or sales skills, and working 20+ hours per week?

If this appeals to you rather than investing in low cost franchises then click here to see how I earn a full time income online without the stress of earning a franchise.

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