What is a franchise business plan?
A franchise business plan can be thought of as a ‘roadmap’ of how you want to run your franchise and is also used to obtain financing from a bank. There are two components to a plan: what you will do with the bank’s money and your own personal goals for the business. On the financial side it will outline how you will use the bank’s money and how you will pay it back. On a personal and business side it will show how you plan to make the business successful.
Some franchisors may provide help with business plans, though there are legal liabilities associated with franchisors making any projected earnings claims for inclusion in the business plan. So, your franchisor will help you to prepare the business plan but should not write it for you. After all it is your business plan and only you know how you want to run the business. Drawing up a business plan will keep you focused on achieving your goals.
What is the main difference between a traditional business plan and a franchise business plan?
The main difference is that a franchise plan must combine components of both the franchisee and the franchisor, which means you are merging different elements of both companies.
Where do you get the information you need to draw up your business plan?
Once you have signed the franchise agreement the franchisor will provide you with the necessary information you need, such as the company’s management structure, marketing plan, demographics, daily operational procedures, start-up and ongoing costs.
How do you write a franchise business plan?
Most business plans follow a fairly standard format which can be found in business books and by searching online. You can find many resources in business books and online by doing a web search to help you with the layout, structure and content of your business plan. The important thing to bear in mind is that you are combining parts of the two companies: franchisee and franchisor.
There are several useful resources:
A business plan overview with details of the content required in each section. There is also a business plan template download
Another useful business plan:
Should you update your business plan in the future?
Yes, as the business grows and changes you will need to update your plan so that it reflects the changes in your business.
Who should help you write your business plan?
Get input from your franchisor and other professionals. An accountant is also a useful source of advice, since he or she usually has experience obtaining financing for their clients. Other experts to consult include experienced business people, or somebody who has experience as a franchisee. It is also a good idea to hire a professional writer to polish your final draft.
Will your franchisor need to ‘approve’ your business plan?
No, they do not need to approve it. This is because if your franchisor approves your business plan they may be in violation of governmental and trade requirements. As previously mentioned, there are legal implications for the franchisor of mentioning projected earnings.
How long does it take to write a franchise business plan?
This is not an easy question to answer. Generally it may take several weeks or many working hours but it really can vary depending on the person and whether they write and research as they go along or if they do it at the end of the process. In some industries it is easier to write a business plan because the necessary information is more readily accessible than in others.
What is the basic outline of a business plan?
Your business plan should include the following sections:
• Executive Summary
• Mission Statement
• Business Structure
• Industry Analysis
• Market Analysis
• Marketing Plan
• Business Management