Top 5 Most Profitable Franchises For Under £20k
Originally posted on 13/02/2018. Updated on 16/03/2019.
Affordable franchises do exist if youíre prepared to think outside the box a little. Rather than going for franchises that require a substantial initial investment and plenty of working capital such as food outlets, some of the most profitable franchises are those that require lower start-up and running costs. Here is our list of the top five most profitable franchises for under £20,000, some of which may surprise you.
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Best Franchises Under 20k
Ever wondered who puts up those ĎFor Saleí or ĎSold!í signs outside houses? Itís the job of companies like Agency Express - the UKís largest provider of professional estate agency board services - to go around the country and do exactly that. With a network of over 114 franchisees, it is recognised as one of the most profitable and well-run franchise models in the country. And, with no direct competition, itís a great choice for savvy entrepreneurs looking for a business with low start-up costs and high returns.
The franchise package includes a ten-year renewable franchise licence agreement giving you an exclusive territory, a brand-new van, tools and equipment including specialist vinyl printers and a smartphone, corporate branded clothing, stationery and marketing supplies and public liability insurance. On top of this, comprehensive training lasting eight days and covering all areas of the business and ongoing support regarding territory research and customer database creation will be provided.
In order to invest in an Agency Express franchise, a minimum investment of £12,500 is required with no franchise fees and franchisees can expect a revenue of £40,000 in year two. The royalty fee is a fairly standard 15 percent, but with low overheads, itís an affordable franchise if your start-up capital is limited.
Aire Serv UK
Air conditioning is becoming increasingly popular in the UK and one of the most respected names in the business is Aire Serv UK. This is one of the most affordable franchises on offer and one of the most profitable too.
Founded in 2001, Aire Serv UK provides an exciting opportunity to start your own multi-van business, attending to domestic and commercial markets in the local area. Joining Aire Serv UK will allow you to generate a healthy income stream with a company that has a proven track record for success, whilst operating in a thriving international network.
The minimum investment is £11,400 and the total investment will be £38,000. The business model currently has over 200 franchises across the globe and is a popular franchise with lenders, who are often willing to lend up to 70 percent of the start-up costs. This keeps the cost of franchises for this particular model down to under £12,000.
This affordable franchise offers a two-pronged approach by delivering a service helping clients with insurance claims, acting as a mediator between claimants and insurance companies. Its goal is to remain as a top service provider of property claims management.
Donít worry if you have no experience of the insurance market Ė the franchisor provides extensive training and franchisees are required to attend annual seminars to keep up with best practices and new legislation. There is also help with recruitment and marketing strategies, which follow a set model that has proven to be highly successful.
Aspray is an attractive franchise for two main reasons. It is one of the most profitable franchises on offer, and there is a very low initial start-up cost. Overheads are also very low, with a high return on investment within the first two years. Minimum investment is £15,000, with a total investment number of £37,500, much of which could be covered by a franchise-friendly lender. There are no franchise fees and support from the franchisor is ongoing.
Auditel is the leading provider of strategic cost management advice in the UK and Ireland. The franchise provides its services to businesses of all shapes and sizes and has been successfully doing so for over 20 years.
With a string of awards and more than 200 existing franchises already in operation, itís a high-profile franchise with few competitors. The brand also has a considerable and loyal customer base.
The mentoring program comprises a five-year deal with up to 78 training days a year, so there is considerably more ongoing support than in many other franchise models. The ideal candidate for this popular franchise will have good business experience at a senior management level across multiple sectors
This award-winning franchise comes in right on our £20,000 price point, with a total investment cost of around £37,950. Again, itís a minimal overhead, high-return franchise thatís well supported by lenders such as HSBC. It is because of the low overheads that this represents one of the most profitable franchises on offer today.
This instantly recognisable brand with the slogan Ďletís feel goodí is the largest and most established retail optical franchise in the UK.
The Boots Opticians franchise has two very big plus points in its favour. Firstly, itís an incredibly well-known and trusted brand, making it attractive to lenders and customers alike. Secondly, youíll also own the equity within your business and can sell it whenever you want to.
The £20,000 minimum investment is offset by a total investment figure of £160,000, so while itís an affordable franchise to buy into, remember that the total cost of a franchise doesnít stop at the initial investment.
Boots Opticians has an extensive franchise support system with pre-registration training and full access to proprietary brands. You will need clinical skills, and preferably managerial expertise too. The partner agreement is worth £10,000 and is valid for 20 years, so be prepared to commit to this franchise. Boots has extensive contacts with major financial institutions that are prepared to provide hefty loans to help franchisees with the considerable set-up costs.
Donít Be Fooled by Lower Numbers
The cost of franchises in this bracket looks tempting for anyone interested in the franchise model for their next business venture. However, itís important to remember that the minimum investment number weíve quoted in all our top five picks is exactly that Ė the minimum youíll need to get started.
Youíll need much more than £20,000 to keep your franchise going for the first two years, so expect to have to approach lenders for loans. Normally, youíll be required to put in at least 30 percent of the investment capital, with lenders usually happy to provide between 50-70 percent in loans. If youíre prepared to work hard though, your franchise can provide you with a very healthy income and has the potential to be the start of your very own business empire.
Becky Martin, Point Franchise ©
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