How to find undervalued low startup cost franchises…

Posted January 29, 2015 8:18 pm by Comments

undervalued franchise

What kind of potential franchise owner are you? Maybe you’re going big: seeking a guaranteed success with a tried and true franchise––a household name that’s still growing at a rapid pace. Something maybe like a Subway or Dunkin’ Brand Group, Inc. (DNKN), two franchises with strong brand recognition who both happen to rank among the top five fastest growing franchises this year.

Or perhaps you’re a risk-taker: searching for an undervalued franchise that’s poised for growth and offers a great deal on its ratio of investment to potential return.

Yet analyzing a franchise is not a binary, either-or proposition. Many franchises with unbeatable brand recognition and solid growth are also downright expensive: both KFC and Taco Bell’s initial startup costs [both properties of Yum Brands, Inc. (YUM)], for example, range from $1 million to $3 million. Yet there remain plenty of well-known franchises — as well as a greater number of burgeoning brands — whose initial start-up costs are affordably low. While Cruise Planners and Vanguard Cleaning both ranked among the fastest growing franchises in 2014, both offer attractively low initial start-up fees of less than $40,000, pushing them into the undervalued category.


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