The E2 Visa allows residents of 80 “treaty” countries to reside in the USA through business investment. A franchise can provide considerable advantages over starting your own business for the E2, but not all franchises are equal!
So what are the benefits of a franchise for E2 visa investors? 1. Support and training from the company. You are in a new country, starting a business from scratch can be a challenge. A franchise gives you a road map to success. 2. Brand recognition. Your E2 adjudicator may be be familiar with the franchise brand, which has more credibility than an unknown start-up business 3. Business plan. It is easier to create projections for your E2 petition when there are previous financial statistics available from other franchise owners in the system.
When you look for a business keep in mind the overall objective of the E2 Visa is to create economic benefit for the USA in some way. That is what your adjudicator will be looking for. Economic benefit can be demonstrated in several ways, but arguably the most compelling is employing US residents. So businesses with no employees that focus only on the owners profit are not great choices for the E2 visa. Not that it is impossible, but real estate type businesses or consulting companies with no employees are not ideal, and will increase the likelihood of denial.
Many E2 applicants think of a food franchise first, and food might be an option we’ll look at that in a moment, but let’s start with service based businesses.
1. Service based businesses can be a good option as they can be profitable, but have a lower investment than a restaurant. These businesses include industries like cleaning, painting, plumbing and electrical, glass repair, mosquito control, and there are many options that will work with E2 visa. The owner does not perform the services, they are hiring for that and running the business as an executive. Some cleaning franchises generate an average of 1.4 million a year and to put that in context an average Subway grosses under $400k. Service based businesses are also easily and inexpensively scaled.
Service based businesses are *not great options for owners who do not have fluent English, or prefer not to interact with customers as most are very relational businesses where the owner is involved in the community, and driving their business forward. Not all are like this but most have a requirement for owner participation. Investment for a service based franchise ranges between $60k – $160k, and we have seen hundreds of E2 visa applicants approved with these types of businesses.
2. Property Management. At a $70k all-in investment this is one of the least expensive franchise options for the E2 visa. This is an in -demand industry that has many E2 visa operator owners. Owners manage both commercial and residential properties. While you may not have many employees at first, you will be hiring many local contractors to perform work, which does demonstrate local economic benefit.
3. Retail businesses. If you have a smaller budget, brick and mortar businesses like restaurants, hair salons or gyms are usually *not a good option for the E2 visa. Most franchised restaurants cost a minimum of $200k, many of them are over a million. Hair salons depending on the location will range from $140-$200k+ for a single unit.
A fitness center with a smaller footprint can be obtained for under $200k, larger footprints are much higher.
Buyers often ask if a resale is a good option as they see bargain businesses for sale for as low as $50,000. The problem with these businesses is they are usually financially distressed and they are losing money. Why else would owners sell at a loss? A business that is losing money is not a good choice for the E2 visa as you will have to convince the official how you, a non-US resident, will be able to turn the business around, despite an experienced US resident losing money. Unless you have a compelling business plan and experience in turnarounds, a bargain resale is probably not a good choice. If you have the budget a profitable resale can be a good choice as it has existing cash flow, but most profitable restaurants and hair salons sell for many multiples of their revenue. As a general rule we suggest buyers have a minimum of $200k available to consider looking at resales or brick and mortar businesses.
The key to maximizing your chances of success and profit is in aligning your abilities, local market demand, your operational preferences and other criteria to the best E2 friendly franchise.
Franchise City broker group has been helping E2 visa applicants find the best franchises for over a decade, our service is free for qualified buyers
LEARN MORE ABOUT OUR E2 VISA FRANCHISE PROGRAM: https://www.franchise.city/e2-visa
THE PROBLEM WITH BARGAIN RESLAES: https://youtu.be/GurPzuuS3sQ