--- title: "10 Low-Cost Restaurant Franchises to Buy" url: https://burnaze.com/article/a27a419a-a1e1-4408-9ae0-82e6d4b84f1d source: "1851 Franchise" original_url: https://1851franchise.com/10-low-cost-restaurant-franchises-to-buy-2545 category: "Restaurants" industry: "Restaurants" published: 2015-09-24T13:08:00.000Z modified: 2026-11-01T03:26:24.462Z image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/04af0cc1f2044d85efd358ec486a73964724150923141330.png --- # 10 Low-Cost Restaurant Franchises to Buy **TL;DR:** The traditional franchise sales model is failing due to prioritization of short-term success and lack of transparency, according to Art Coley, CEO of CGI Franchise. Coley advocates for transparency and attention to unit-level profitability in recruitment strategies. *originally published in 1851 Franchise on 2015-09-24. [Read the original](https://1851franchise.com/10-low-cost-restaurant-franchises-to-buy-2545).* ## Story The traditional franchise sales model is failing. Brands prioritize short-term success in the form of unit signings and franchise fee collections. Bloated — and undisclosed — broker fees leave them low on funds to support the small business owners they’ve just signed. Development teams accept sweeping industry averages, like a $13,000 cost per lead or a 1% deal-to-lead rate, rather than looking at the reality of their own system and examining the operational factors that could be influencing franchisee interest. Closing a deal has become the goal, not signing, onboarding and supporting a right-fit owner who will truly be successful in the system, and this pushes a lack of transparency that harms the entire industry. While a recent FTC settlement may represent some movement in the right direction, the industry at large needs a reset. - A strong recruitment system, though, must have the right priorities. - Coley advocates for transparency, attention to unit-level profitability and recruitment strategies that are aligned with long-term franchisee success. Art Coley , CEO of CGI Franchise and the ROS Framework, said on a recent episode of the Meet the Franchise podcast, “We’ve got to be willing to get honest, even if that means a headline or news gets out that isn’t pretty,” “Those behaviors unfortunately happen too much in the industry, and that in itself is an injustice because franchising is beautiful. It's the greatest invention, in my opinion, for small business ownership.” Coley is the creator of the Recruitment Operating System®, a framework developed to help franchisors optimize their own development efforts rather than relying on broker networks or lead generation agencies. With over 30 years of experience in the franchise industry, Coley bases his strategies on one enduring principle: a great business model is only as strong as the recruitment system behind it. A transcript of Coley’s interview with 1851 Franchise Publisher Nick Powills has been provided below. It has been edited for brevity, clarity and style. Nick Powills: We'll get into what your business is and everything that's going on with you. But I'm going to kick off with a statement, because I think it'll create a good discussion. I hear everybody coming back from the Franchise Development Conference, and I keep on hearing the numbers: "The cost per deal is $13,000, and the cost per lead is this." I hear this stuff, and I start getting frustrated by it. Why are we using these benchmark numbers when the truth is it's always going to be specific to the brand? Unit-level economics are king. If you can't make money, you can't get a payback on your initial investment, or if it takes a long time, it's going to be harder to sell franchises. The brokers have already disrupted everything. They're capturing all the leads. So I hear these data points, and then I talk with franchisors that are using it as a reference point, and I get irritated by it, because I'm like, "Why don't we just look at your specific data?" When you hear industry data, or you're looking at or talking to a franchisor that has false expectations with upside-down unit-level economics, how does it make you feel? Art Coley: It hurts. The industry data stuff in franchising, it reminds me of that phrase, "The road to hell is paved with good intentions." I don’t mean that in a sarcastic or humorous spirit; I'm serious. I think people in our industry are trying to offer help. People are intending or trying to get real information. A lot of times, what happens is people start really vomiting from the mouth, and that ends up turning into just mistaken beliefs, false beliefs, unknowingly and all. Most of the time, I really do believe it's unintentional. But that, in many ways, is the result of people not really knowing even their own data and being hungry for just anybody that comes along that can offer you some kind of nugget or inspiration to help you have what you think is a baseline or a milestone or some kind of KPI. Nobody's stopping to say, "Okay, what's the basis of that? Where does that come from?" We just hear something in our industry, and we're often guilty of just adopting it. One of them, Nick, is the old thing about the 1% rule. I heard that for years going to conferences: “If you get about 100 leads, you'll sign one of them, and if you get 1,000, you should be signing about 10.” It still is out there. It's out there a lot less today because enough franchise owners are saying, "Wait a minute," but we know that the industry average now is 25 basis points, maybe 50. So then you're talking now 200 to 400 leads for one signing. Guess what? If you're building your whole recruitment program, and I'm just talking about signings, never mind if they're the right people and qualified, I'm just talking about pure production of signed franchise agreements. If you're building your whole platform and thinking that, okay, if I'm at the industry average, and you just kind of should show up, should be signing one out of a hundred, and the real number for you might be one out of six hundred, you've got a problem. You've got a problem. And unfortunately, this is the reason why ROS exists. It's an unfortunate thing, because if all of that wasn't there, we probably wouldn't have a business. And the truth is, my business is at record sales. We've got more brands wanting to work with us than we will take on. Again, I'm not storytelling; I'm not pontificating or anything. I'm just talking about the truth. And the truth is that's because they need help. So I think about franchisors that are even reaching out to you, franchise salespeople or executive leadership, saying, "We want more." Of course, every franchisor should want more. They're not wrong to want that. But it seems like expectations are just always misaligned because of that industry data, because of probably false pressures from CEOs that don't get it. Are we looking at intelligence issues? Are we looking at unnecessary pressure issues? What is even creating this? Obviously it's good for your business, and it's good for ours, because we can create solutions to try to solve it, but is it intelligence? Is it expectations? Is it something else? Coley: Backing up, Nick, in some isolated cases it can create some opportunities for businesses like yours and mine. But you and I would trade it in a heartbeat if we didn't have that case, because we're still going to get the business that we need. People still need help, even if all the data and baselines are right. But it's bad for the industry, because what we end up doing is we start selling versus recruiting. Nobody ever disagrees with this: the value to franchise recruitment and franchise development isn't about signing franchise agreements and getting units opened. It's about building successful businesses. Private equity isn't making an investment in this, and investors aren't coming to the table for that. Founders never started a franchise company because they said, "Man, let's just go out and sign 20. If we can go out and sign 100 franchise agreements, it'll be gold." They never said that. They always say, "If we can go get 100 units going, and they're averaging $3 million a unit and we've got $300 million in sales, that's gold." ## Entities - 1851 Franchise (publication) - Restaurants (sector) - unit expansion (topic) - private equity (topic) - Nick Powills (person) - transparency (topic) - Art Coley (person) - CGI Franchise (company) - franchise sales model (topic) --- Originally reported by 1851 Franchise (https://1851franchise.com/10-low-cost-restaurant-franchises-to-buy-2545). Summarized by Burnaze (https://burnaze.com/article/a27a419a-a1e1-4408-9ae0-82e6d4b84f1d).