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TheStreet Open House

Buying a Cheap Franchise Can Get Expensive

Stocks in this article: PZZA NATH

4. Liberty Pest Management Services
Start-up minimum: $16,000
Liberty Pest Management Services, which -- as the name suggests, takes care of pest and animal control -- has drawn 11 franchisees in two years. Liberty Pest provides these services in New York, New Jersey and Florida. Franchisees are primarily home-based (or truck based).

According to the IFA data, start-up costs range from $16,000 to $40,000, while a total initial investment ranges from $21,400 to $74,500. Co-founder Todd Oifer confirmed the IFA's figures but says the company is trying to be as flexible as possible to franchisees. Besides offering discounts to veterans, for instance, Oifer says experienced candidates (such as those coming from a competitor) could get some of the franchise fee -- or all of it -- waived.

Fees also depend on the state's licensing requirements, he adds. Start-up fees include a protected territory and exclusive branding rights, discounts to vendors, suppliers as well as training on industry protocol.

Start-up costs also vary depending on whether the franchisee already owns equipment and a vehicle and on the menu of services they choose to offer. Ongoing investments include royalties (built on a declining scale depending on gross revenue), licensing fees and insurance, for instance.

"We attempted to create the most flexible pest control franchise system available," Oifer says. "We're basically targeting marketing to technicians and salespeople in the industry who always dreamed about having their own business."

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