Best 5 Low-Cost Franchise Ideas For Small Towns

Vaishnavi Gupta
Vaishnavi Gupta May 21 2020 - 5 min read
Best 5 Low-Cost Franchise Ideas For Small Towns
If you are willing to explore the untapped small towns for your business expansion, here are best five low-cost franchise ideas for small towns.

Top Franchise Ideas For Small Towns

While talking about the economy of small towns, small independent businesses are the major source of revenue, which suggests the gradual rise in rural entrepreneurship. This is why many entrepreneurs are willing to explore the untapped small towns for their business expansion, to attract more consumers to them and help these towns regain their charm. Even a lot many franchise opportunities can be easily explored in such areas as small-town consumers are seeking facilities in their own areas.

If you are willing to explore the untapped small towns for your business expansion, here are the best five low-cost franchise ideas for small towns.

Food Trucks

Food Trucks, also known as Mobile Kitchen, have become immensely popular in India, especially in metro cities. Food Trucks have become quite a rage among the young population with a rise in youth spending, middle-class expenditure, conscious consumerism, mobile lifestyle, and the requirement of food on the go.

Food truck has evolved as a popular choice for starting a restaurant business, especially for first-time restaurateurs, as it has low risks and low investments involved. Food Trucks are an excellent option for food enthusiasts to begin a business with minimum investment and risk. In India, there are various food truck franchises that operate in almost every nook and corner of the country.

Many brands in food and restaurant are coming up with their food truck model and are eyeing to expand in small towns. A food truck franchise can be started with an investment of around Rs 5-10 lakhs.

Ice-cream Parlors

In India, the ice cream industry is one of the fastest growing segments of the dairy or food processing industry. The country has a low per capita ice cream consumption of ice cream at 400 ml as compared with per capita consumption of ice cream of 22,000 ml in the United States and 3,000 ml in China. In India, the ice cream industry generated revenue of over $1.5 billion in 2016 and is projected to generate revenue of approximately $3.4 billion by 2021.

In modern times when franchising has become the best option to start a business, the ice-cream franchise provides a great opportunity to establish oneself as a capable entrepreneur and earn handsomely. The growth in this sector can be envisaged by the ever-increasing players and their expansion pan India through the franchise route. 

As people in small towns have limited investment with them due to lack of resources, a franchise brand can easily help entrepreneurs in growing a business with minimal investment in an ice cream parlor. In a small area of 200-400 sq ft, one can start their ice-cream parlor with an investment of Rs 5-10 lakhs.


The Indian pre-school market has witnessed healthy growth in recent years. This market in India is poised to grow at a CAGR of around 19% during 2019-2024. The growth of the Indian pre-school market is driven primarily by factors like rising parent awareness for early childhood education and care, coupled with the rising number of nuclear families and working women in the country. 

In India, investing in a preschool franchise is one profitable option for investors that are planning to start something of their own. In fact, the preschool education industry is growing by leaps and bounds, which is eventually opening the gate of opportunities for aspiring franchisors.

With franchising being a low-cost model, big fishes in the preschool market are opting for the franchise model to penetrate deeper into the market, including small towns in tier II and III, hence flourishing franchise opportunities in the segment. The typical investment range to start a preschool franchise is Rs 5 lakhs and can range up to Rs 50 lakhs, with an area requirement starting from 1500-2000 sq ft. The breakeven period in most of the preschool franchises can be expected in 12-24 months.

Internet services

In today’s technologically driven world, it is difficult to survive without internet services, be it a big or small town. With cheaper mobile handsets and data packs, internet service providers are looking for deeper penetration, even in the small towns and the remotest areas.  

Internet service can be turned into a serious business opportunity via franchising. Even the investment amount in this franchise is quite minimal, starting with Rs 2 lakhs and ranging up to Rs 5 lakhs.

Agri services

The concept of franchising has recently been quite popular among most of the sectors in the Indian economy. However, although it has a presence in the agriculture sector, it is at a very nascent stage.

In a country like India where agriculture employs over half the workforce, agriculture-related business can be a great thing to encourage rural entrepreneurship. While most of the small towns are generally located on the outskirts, agriculture and farming related businesses can do quite well.

With concepts like microgreens and rooftop farming, agriculture businesses are creating new trends in the economy and can be perfectly utilised by small-town entrepreneurs. An investment of about Rs 5-7 lakhs is required to start an agri-service franchise.

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