The 10 Cheapest Food Franchises to Open Today (2022)

Cheap Restaurant Franchises | Franchise Coach

You are passionate about food and you know you have a lot to offer to the food and beverage industry. In addition, the idea of running your own restaurant or food franchise sounds exciting and just the right step in your career. It, therefore, makes sense to be considering a franchise opportunity in the form of a new restaurant Downtown, an ice cream parlor in a mall, or a fast food franchise on the East Coast.

However, if you are concerned that the franchise fee or net worth requirements to start a food franchise might just be too much for you, you don’t have to worry. There are many cheap restaurant franchises available with low startup costs and great support from the parent company for you to easily find the right franchise for you.

This article will help you understand the various franchise costs in the restaurant industry and navigate through your options before becoming a food franchise owner.

What Are The Franchise Fees

Initial Franchise Fee

The franchise fee is a lump sum paid to the franchisor, or parent company when a contract is signed. The initial franchise fee is paid right at the start of the agreement in order to establish the franchise relationship and for the franchisee to receive the initial services agreed upon, such as training, materials for marketing support, and any other branding collateral needed.

Although the franchise fee can vary between franchisors, some offering a lower franchise fee than others, it is still one of the key areas used to attract investors and is generally kept at a low cost. When buying a franchise from other franchise owners, this one-off fee will appear as a transfer fee, and similarly, upon renewal of your franchise agreement, you will have to pay a renewal fee. These are all typically fixed but there might be rare cases where the franchise fee can be negotiable.

Royalty Fees

These are monthly fees paid to the franchisor and are based on a percentage of the gross sales of your franchise. For most restaurant franchises, the royalty fee can range from 4% up to 12% in some cases. In many franchises, this fee will earn you ongoing support for your business, such as marketing support and collateral.

Although most commonly, this fee is based on your gross sales, it does differ between each franchise and can also be based on revenue or pretax profit.

Advertising Fees

Also based on your gross sales, the advertising fee is an ongoing fee to the franchisor and tends to be a lower percentage than the royalty fee. This will ensure the parent company is advertising your location and services on their main website and promoting your business through their network.

Other Franchise Costs

Once you have paid your initial franchise fee and have completed the franchise training, you are ready to start treating it like the business you want it to be. From now on, your main costs will be running costs associated with your physical franchise locations, equipment, and staff.

Startup costs will include rental of a location, buying equipment and interior fittings for the business, and additional sales and marketing efforts that all add up to the total starting capital. It will be up to you to keep a low cost. The ongoing costs will include monthly rent, utilities and cooking or cleaning supplies, employee salaries, and equipment maintenance.

Top 10 Cheap Restaurant Franchises

1. Baskin Robbins

Cheap Restaurant Franchises (Baskin Robbins) | Franchise Coach

Baskin-Robbins is a leader amongst the ice cream franchises with a business model that has been proven successful in more than 7,700 shops in 52 countries. When you franchise with Baskin-Robbins, you are joining a world-known brand and a global network of like-minded franchise experts.

Total Initial Investment

For a chance to own a unit of the brand, you will have to meet the following financial requirements:

Baskin Robbins has a royalty fee of 5.9% on all sales of the franchise owner. You have to also pay $300 per year in order to be able to access the franchise system.

2. Cold Stone Creamery

Cold Stone Creamery is one of the cheap restaurant franchises but the most promising one in the world. Named a “bright star” in the $8 billion ice cream US market, it is a brand that is rapidly expanding both in the US and Internationally. One of the key differentiators of the company is that they provide incredible support to their franchisees making sure they are well prepared for success.

Total Initial Investment

The brand understands the importance of being able to easily open a new restaurant franchise and scale it up at your own pace. The costs are as follows:

The ongoing royalty fee for Cold Stone Creamery is 6% of gross sales.

3. Chick-Fil-A

Cheap Franchises (Chick-fil-A) | Franchise Coach

The Chick-Fil-A franchise has more than 2,000 restaurants, serving hand-breaded chicken sandwiches, hot waffle fries, and genuine hospitality, run by carefully selected franchise owners who are passionate about building their business and community.

Total Initial Investment

Chick-Fil-A offers some of the lowest in the restaurant franchise business. Although the total starting investment ranges from $332,990 to $1,972,225, the company told Business Insider doesn’t require candidates to meet a threshold for net worth or liquid assets to qualify as a new owner.

The start-up costs are as follows:

The royalty fee for Chick-Fil-A is 15% on sales and they also take 50% of franchisee profits.

4. Chester’s Chicken

Chester’s is a leading quick-serve restaurant (QSR) with 1,200 franchise locations offering high-quality, fried chicken in convenience stores, college campuses, and supermarkets. It is one of the rising brands amongst food franchises in the US.

Total Initial Investment

To get started franchising with Chester’s, these are the costs you have to consider:

There are no royalty fees for Chester’s franchise.

5. Firehouse Subs

One of the cheap restaurant franchises to consider is the Firehouse Subs, a leader in the fast casual sandwich industry and a fast-growing sector of the restaurant industry. They offer customers quality ingredients while maintaining exceptional relationships with their franchisees.

Total Initial Investment

Grab this franchise opportunity and start your first sandwich business for as little as $412,731. The other start-up costs are as follows:

6. Quizno’s

With millions of fans across the US and overwhelming brand loyalty, Quizno’s is kicking up the game a notch. With a revolutionary business model focused on fast, fresh, and omnichannel delivery Quizno’s is set to further drive profits for franchise owners joining the brand.

Total Initial Investment

After the 2018 hit, Quizno’s have revised their business model and has now become one of the cheap restaurant franchises in the $20 billion sub franchise category, ensuring they are still catering to those who wish to invest in small businesses. Although the total cost of ownership can range from $216,100 to $500,000, the following are the standard franchise costs:

Ongoing fees include the royalty fee of 5% of gross sales and the advertising fee of 2% of gross sales.

7. Taco Bell

Taco Bell is one of the most successful and cheap restaurant franchises in the US. They serve customers their favorite Mexican fast food for more than 60 years and in more than 7,000 locations. Although on the higher end of food franchises in terms of costs, the franchise itself has approachable fees, high-quality ongoing support, and an unbeatable brand following.

Total Initial Investment

Starting your own business in the Taco Bell brand will cost you $1.2 million and $2.6 million if you are starting outright, but you can purchase an existing outlet for as little as $175,000. The franchise itself has the following standard, startup costs:

Once your restaurant is up and running, the company charges an ongoing royalty fee of 5.5% of gross sales and an advertising fee of 4.25%.

8. Mucho Burrito

This up-and-coming Mexican Burrito franchise is making its way from Canada to the US and it’s doing it big. As an entirely new brand in the US market, offering a premium burrito experience at low cost for franchisees and exceptional brand management support, it is definitely one of the most exciting franchise opportunities to look out for.

Total Initial Investment

Start your own premium Mexican fast food by joining the company for a total investment ranging from $361,000 to $659,500. The company also has a financing option through a third party, making it even more accessible. This is an overview of the costs included:

The royalty fee is 6% of gross sales, while the advertising fee is 3%.

9. Papa John’s

Who doesn’t know Papa John’s Pizza? It is one of the most iconic pizza brands and cheap restaurant franchises in the world. When you think that they carefully select their franchisees based on management experience, net worth, and commitment (they prefer multi-unit franchise owners), it should not come as a surprise that they deliver consistent quality and achieve strong brand loyalty.

Total Initial Investment

The initial investment can range between $34,500 and $743,930 depending on how big you want to start with your own company. These are the financial requirements for starting your own Papa John’s restaurant:

Papa John’s royalty fees stand at 5% of net sales for traditional restaurants and 6% for non-traditional small-town businesses. For online orders, there is a transaction fee of 1.75% of net sales. There is also a $240 fee per month for access and maintenance of the franchise system.

10. Scooter’s Coffee

Cheap Restaurant Franchises (Scooters Coffee) | Franchise Coach

Scooter’s Coffee offers a unique, low-cost, drive-thru business model for coffee lovers in almost 500 locations across the nation. They are selective when it comes to building new franchise relationships and this translates to their exceptional service based on a team full of management experience.

Total Initial Investment

According to the company, the total initial investment ranges from $794,000 to $1,264,500 for a new business, one of the most accessible franchise opportunities in the sector. The following summarizes the franchise cost breakdown for the brand:

Ongoing fees will include 6% in royalty and 2% in advertising fees. They also have partnerships with multiple lenders who can provide SBA and non-SBA loan options for franchisees.

Final Thoughts

Running a restaurant franchise is definitely not for the faint-hearted and requires someone dedicated and experienced in managing a fast-paced, exciting, and innovative service. If you are that person and are ready to take on the industry, look no further. Owning a business should not break the bank and these cheap restaurant franchises are perfect for you to start your journey to success.

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