Here in Australia, we love a good franchise. According to Money Magazine, there are three times more franchise outlets per capita in Australia than in the US, representing about 4% of our national economy. Our franchise industry employs more than 500,000 people Australia-wide and rakes in a whopping $181.8 billion in revenue each year.
Starting a business is hard work. It can also be high risk if you’re not careful. Fundera reports, for example, that about 20% of small businesses fail in their first year. The high risk nature of business is why franchising is an appealing prospect for many aspirational business owners. Owning a franchise allows business owners to leverage brand value and recognition from day one, giving them the kickstart that they might need to win in the entrepreneurial game. It also provides entrepreneurs with business models that have been proven to work, eliminating the need to waste money and time on trial and error.
With more than 1,000 franchise brands out there on the market, how do you choose the right one for you? And where do you even begin to look? The truth is that there isn’t a ‘one-size-fits-all’ franchise out there. But there are some franchises out there that are known to make more money than others. In this post, we’ll give you some insight into some of the top low-cost, high-revenue franchises in Australia.
So, which franchise makes the most money in Australia?
When it comes to business, it’s normal to reach for the low-risk, high-reward option. Obviously, acquiring a franchise that is known to be profitable is preferable to acquiring one that isn’t. In Australia, some franchises perform better than others. Business Franchise Australia lists Poolwerx, Battery World, Fooco, and the Coffee Club as among the leading franchises in Australia when it comes to earnings.
However, when considering buying a franchise, it’s not always the best idea to think strictly in monetary terms. Ultimately, there’s no such thing as the ‘best’ franchise because we’re all different and have different interests and strengths. What matters more is aligning your own interests and skills with a franchise model. Our Founder and CEO, Jim Penman provides some great advice on this subject in this video.
Do franchise owners make good money?
In the franchise industry, we observe something that we call the 80/20 rule. Some franchisees make a fortune across their career. These individuals – the ‘top performers’ – usually form about 20% of all franchisees. Other franchisees, the remaining 80%, do reasonably well in their businesses – enough to earn a decent living and to live comfortably, but not necessarily enough to make them ‘rich’.
Some franchise companies are lower risk than others. For example, at Jim’s Group, we have something that we call a ‘Pay for Work Guarantee’. This guarantee means that all of our franchises are guaranteed an income of at least $1,200 per week. We have this guarantee because we want our franchisees to spend less time and energy worrying about their business and their income, and to spend more time focussing on improving their services and innovating.
Low-cost franchises with high profit?
Generally, retail franchises have higher start-up costs and fees than non-retail franchises. In a 2016 report by Griffith University, the average start-up cost for a new retail franchise was reported to be $287,500. On the other hand, the average start-up cost for a non-retail franchise was only $59,750.
So if you’re looking at a low-cost franchise opportunity, you’re better off looking at non-retail franchises. This is why mobile franchises like mobile dog wash services and mobile gardening services are attractive. These sorts of franchises usually don’t come with the huge overheads associated with retail businesses. Some industries to look into if you’re considering buying a low-cost, high-profit franchise would be pest control, gardening, cleaning, and handyman.
What is the cheapest franchise to start?
The cheapest franchises to start are ones that require minimum investment. Again, mobile franchises and home-based franchises are your best bet when it comes to securing a bargain franchise. For example, a Jim’s Mowing franchise usually requires a capital investment of $20,000-$50,000, depending on the trailers and equipment needed. When you compare this to the $220,000 – $350,000 needed to buy a new Boost Juice store, for example, it quickly becomes clear just how affordable a mobile or home-based franchise can be.
How to buy a franchise with no money
If you’d like to invest in a franchise opportunity but don’t have the capital to move forwards, there are some options available to you to help make your dream a reality. In many franchise companies, franchisors offer financing options for new and existing franchisees. Most companies understand that not everyone has the necessary funds on hand from day one, so many franchisors are happy to help prospective franchisees in any way they can.
It’s important to be realistic about your cashflow projections from the very beginning to save you potential disappointment down the track. If you don’t feel completely comfortable and confident in your finances, it’s a good idea to seek the advice of a financial advisor or consultant before you make any big decisions.
If you’re tired of working for someone else and are ready to become your own boss, owning a franchise can be a great way to kickstart a new career. Give us a call on 13 15 46 or enquire online to talk about next steps to become part of the Jim’s Group family.
We have regional franchisor opportunities and some pre-loved franchises available Australia-wide.
Select from the drop-down box what division you are interested, and one of our team will call you to discuss the options available for you.
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