Low cost franchises are characterized by the fact that they can be purchased with a minimal capital investment. While the initial appeal of low cost franchises is economic, the unique characteristics that allow these businesses to be financially accessible also make then attractive to specific demographic groups. One of the most common factors among low cost franchises is that many can be run from home offices. As a result, they typically require less physical labor to establish and maintain. This can be attractive to people with physical limitations or mobility restrictions who may be unable to put in the work required to establish and maintain a freestanding location.
Low cost franchises are particularly appealing to the growing numbers of senior citizens looking for second careers or supplemental income. According to a 2017 Gallup poll, 74 percent of employed U.S. adults say they plan to work past retirement age, likely on a part-time basis. Another 11 percent plan to continue working full time. Researchers reported that the major reasons older entrepreneurs say they start their own companies are to have scheduling flexibility and generate supplemental retirement income. The growing number of older franchise owners supports the fact that low cost franchises can accommodate these considerations. About 28 percent of franchise owners were age 55 and over in 2015. This was a 40 percent increase from 2007 when the same group accounted for 20 percent of franchise owners, according to a report by CNBC.
Low cost franchises also appeal to entrepreneurs at the opposite end of the age spectrum. CT Corporation reported that 60 percent of college graduates surveyed indicated that they wanted to start their own businesses, while 67 percent did not understand how to go about it. Low cost franchises can offer a new generation of entrepreneurs the opportunity to become business owners with the guidance and backing of an established organization. In addition, first-time franchisees may be able to arrange the minimal financing necessary for low cost franchises by soliciting loans from family and friends rather than having to rely on financial institutions. By starting business ownership early, millennials can learn the basics of business ownership with less risk and valuable guidance.