There’s a franchise for almost every budget. Some brands can be started for only $10,000, for example, while others cost $100,000 or even $1,000,000 (and every number in between, and beyond). But Entrepreneur’s research identified a curious trend: Franchise brands with lower initial investments tend to have higher termination and closure rates—which is to say, franchisees of low-cost brands tend to fail more often.
The cutoff price seems to be $25,000. For anything above that, the average failure rate typically stays below about 5%. But when the franchise fee is between $15,000 and $25,000, that failure rate jumps to 9.3%. It’s nearly as high for initial investments below $15,000.
Why? Franchise industry insiders agree: The problem is likely more with the franchisees, not the franchises themselves.
“Probably, individuals that are…
