From entrepreneurs looking to start a new business to CEOs opting to run their own company, franchising has become a staple across the United States. According to Statista, in 2022, it was estimated that there would be almost 792,000 franchise establishments in the country with an economic output of roughly $827 billion. By the end of 2023, it is projected that the economic output for franchises will be roughly $860 billion.

The advantages of choosing a franchise over starting an entirely new business have been heavily noted. With a franchise, entrepreneurs are choosing a package that includes marketing services and resources provided by the franchisor that will help the franchise owner be successful. Instead of having to learn how to operate a business on their own, franchise owners can lean on the corporate franchise staff and other owners for help and guidance.

Of course, not all franchises are created equal. Whether you decide to join a restaurant franchise or one geared toward remodeling bathrooms, the similarities and differences vary for each one. In some cases, the price tag can be the ultimate dealmaker or dealbreaker for entrepreneurs.

  1. Andrew Mengason, chief growth officer for Five Star Franchising, the parent company of Five Star Bath Solutions, does an excellent job explaining why the price tag of a franchise shouldn’t be the only thing entrepreneurs consider when looking for a franchise to purchase.

“While price typically reflects perceived value in consumer markets, that’s not the case when it comes to franchising,” said Mengason. “Many times, low-cost franchises are flexible and allow franchise owners to run the business in a way that suits them. In general, low-cost franchises can run out of a home in the beginning, and they do not require much capital investment that comes with building out a storefront. This helps lower the cost of entry while also leaving more revenue for the franchise owner to spend directly on the business.”

And that is just one of the many benefits and reasons why entrepreneurs should consider low-cost franchises.

Benefits of Low-Cost Franchise Opportunities

If you are a franchisor, promoting the many benefits of a low-cost franchise system like yours is paramount. While saving on capital expenditures is excellent for lowering the price tag, there are multiple positives that come from avoiding that expense. By taking those costs out of the equation, franchisors can focus on franchisee services such as promotion, marketing and sales, which allows for slightly less startup costs. From Five Star Bath Solutions’ perspective, we’ve done a great job of centralizing much of the front-end aspects of the business – sales, marketing, lead generation, and booking – at the franchise level, which give the franchise owner the opportunity to execute on a local level.

In addition to low startup costs, franchise owners without major capital expenditures can be profitable at many different levels. In the bath space and other home service franchises, the break-even point is low because there are so many variable costs in the business that are directly associated with the job. This makes it possible to be as profitable at lower levels as you can at higher levels because your expansion is directly related to your marketing. So, instead of opening more buildings, you’re able to expand these companies from one location just by adding more promotions or salespeople. 

Emphasis on Training

When it comes to promoting your low-cost franchise, it’s vital to emphasize your training and marketing support. When franchise owners are training regularly, they are constantly evolving and becoming more knowledgeable business owners, which is a win-win for both the franchise owner and the franchisor. At Five Star Bath Solutions, we believe that you never stop training. Early in their tenure, our franchise owners are drinking from the proverbial fire hose between our four to six-week pre-training program and our full week of in-person training at our corporate headquarters in Detroit, Michigan. Even when the full week is complete, training does not stop. All our owners and salespeople in the system are invited to our weekly calls, where we are constantly reviewing or introducing new ways for franchise owners to better themselves or their businesses. Training is a way of life for us because we are always striving to perform better in our businesses. We leverage that into our promotion of the franchise system because entrepreneurs are looking for franchises that take the time to help their owners be the best businesspeople they can.

Marketing is equally as pivotal. For home service brands, it’s the driving force behind growth. It’s important for home service and low-cost franchises to promote how they implement marketing strategies, new affiliates, and new partnerships with national vendors. At Five Star Bath Solutions and Five Star Franchising, our parent company, we have our own marketing company that we use for our digital SEO and pay-per-click strategies, as well as Facebook. In our affiliate program, we are constantly testing new digital sources to help generate leads. We also promote ProNexis, which is a dedicated team of agents that only work on the Five Star Bath Solutions and the other Five Star Franchising brands. They are fully trained to use our systems, and their goal is to book appointments directly onto our franchise owners’ calendars. Showcasing unique procedures and marketing strategies like these will help a low-cost franchise catch the eye of entrepreneurs.

Flexibility for Business Owners

When you combine the ability to be a home-based business in the beginning and the marketing and training possibilities low-cost franchises have to offer, you are appealing to modern entrepreneurs who are looking for the flexibility franchises have to offer. Many low-cost franchises that offer a home-based model allow franchise owners to be cashflow positive earlier in their journey because they’re not having to cover the expenses of a large operation or building earlier than they need it. This allows the franchise owner to keep a relatively low overhead to the point where a building is a negligible part of the business model. This creates flexibility for owners to manage the business in a way that suits their personal needs.

As Brand President of Bath Solutions, Dean Hartley directs franchise systems and processes to assist franchisees in growing successful, profitable businesses. Dean brings over 15 years of experience in the one-day bathroom remodeling industry and a vast knowledge base to assist in building the Bath Solutions franchise system. Before joining Bath Solutions, he most recently held the position of VP of Sales and Marketing with Design Imaging where he supported dealers with sales and technical assistance. Dean graduated from the University of Michigan in 1998 with a bachelor’s degree in history and finished his last semester at St. Peter’s College in Oxford, United Kingdom.