Top 5 Most Profitable Franchises For Under £20k

13/02/2018 18:00 | Start a business

Best franchises under 20k

Affordable franchises do exist, if you’re prepared to think outside the box a little. Rather than going for franchises that require 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 £20k, some of which may surprise you.

Best franchises under 20k

Agency Express – A business with no ‘board meetings’

Ever wonder who puts up those ‘For Sale’ or ‘Sold!’ signs outside houses? It’s the job of Agency Express to go around the country and put up boards for estate agents whenever they sell, market, or let properties. It’s the only UK national estate agency board company, and is recognised as one of the most profitable and well-run franchise models in the country. There is currently a network of more than 114 franchises, but with no direct competition, it’s a great one to choose if you’re looking for a business with low start-up costs and high returns.

Agency Express franchises come in at a minimum investment of £12,500, with no franchise fees and expected revenue of £40,000 in year two. The royalty fee is a fairly standard 15%, but with low overheads it’s an affordable franchise if your start-up capital is limited. Packages include:

  • A 10-year renewable franchise licence agreement giving you an exclusive territory
  • A brand-new and fully sign-written van
  • Full training
  • Specialist tools and equipment, including vinyl printers, specialist tools and even a smartphone
  • Corporate branded clothing, stationery and marketing supplies
  • Public liability insurance
  • Ongoing support

Aire Serv UK – A cool choice

Air conditioning is becoming more 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. The minimum investment is £11,400 (+VAT) and your total investment will be £38,000 (+VAT). The business model currently has over 200 franchises across the globe, and is a popular franchise with lenders who are willing to lend up to 70% of the start-up costs. This keeps the cost of franchises for this particular model down to under £12k.

Aire Serv UK is still relatively small in the UK, meaning that there are plenty of franchise opportunities in potentially lucrative urban locations across the country. The business isn’t restricted to servicing commercial heating and cooling systems, either, but also covers domestic contracts too.

Aspray – managing property claims

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. It’s an attractive franchise for two main reasons. It’s 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 higher ROI within the first two years. Minimum investment is £15,000, with a total investment number of £37,000, much of which could be covered by a franchise-friendly lender. Fees are £0, and support from the franchisor is ongoing.

Don’t worry if you have no experience of the insurance market – the franchisor provides extensive training and franchisees are required to attend annual seminars to keep up with best practice methods and new legislation. There is also help with recruitment and marketing strategies, which follow a set model that has proven to be highly successful.

Auditel – Management and advice for businesses

This award-winning franchise comes in right on our £20k price point, with a total investment cost of around £37,950. Again, it’s a minimal overhead, high-return franchise, that’s well supported by lenders such as HSBC. The franchise exists to provide strategic cost management advice to businesses of all sizes, and has been successfully doing so for over 20 years. Because of the low overheads, this represents one of the most profitable franchises on offer today.

The program is a five-year deal with up to 78 training days a year, so ongoing support is considerably higher 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.

With a string of awards and more than 200 existing franchises already in operation, it’s a high-profile franchise with few competitors. The brand also has a considerable and very loyal customer base.

Boots Opticians – Helping you see more clearly

This is probably the most instantly recognisable brand in our top five, and a high-street stalwart. The £20K minimum investment is offset by a total investment figure of £150,000, so while it’s an affordable franchise to buy into, remember that the cost of franchises doesn’t stop at the initial investment.

However, the Boots Opticians franchise has two very big plus points in its favour. Firstly, it’s a very well-known and trusted brand. This makes it attractive to lenders (when you’re looking for a little financial help covering those investment costs), and customers. Secondly, you’ll also own the equity within your business and can sell it whenever you want to.

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 who are prepared to provide hefty loans to help franchisees with the considerable set-up costs.

Don’t be hypnotised by the lower numbers…

The cost of franchises in this bracket looks tempting for anyone interested in the franchise model as their next career move. However, it’s important to remember that the Minimum Investment number we’ve quoted in all our top five picks is exactly that – the minimum you’ll need just to get started.

You’ll need much more than £20k to keep your franchise going for the first two years, so expect to have to approach lenders for loans. Normally, you’ll be required to put in at least 30% of the investment capital, with lenders usually happy to provide between 50-70% in loans. If you’re prepared to work hard, though, your franchise can provide you with a very healthy income, and possibly be just the start of your very own business empire!

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