Use this section to prove to the potential lender that you are not jumping into a business venture on a whim. Concentrate on the specific area market in which the franchised business will be located.
The territory description in the FDD Item 12 will help you to a point. Give a brief discussion of the following: This section provides a look at the people who will be responsible for the day-to-day operation of the franchise, particularly you as the owner.
Is this venture going to be a sole proprietorship or will there be multiple owners? Explain if you will be involved day-to-day with business operations, or will be acting as an absentee owner. For yourself and all of the others with an ownership stake, if applicable, detail all business qualifications.
Stress any and all experience even if volunteer that is relevant to being successful in the future with the franchise operation.
Item 15 of the FDD will help with explaining the managerial obligations of the franchisee. Use FDD Item 11 to your advantage here. Also, it provides a description of the training you will complete before opening. Often marketing and sales courses are part of required training. This is the meat of your business plan. Give the lender the big picture of your financial situation as well.
Detail how you are going to obtain the entire initial investment. Often times, a lender will not be financing all of the franchise investment. Are you using a mix of personal savings, loans, credit, etc.? In addition to the funding request, you will be doing some financial projection. Give a reasonable time frame when the lender can expect full repayment of the loan, and back up that claim with figures.
Include graphs and charts detailing the start-up costs, projected profit and loss and projected sales forecast for the franchise. Most franchise agreements run 75 pages or longer.
Compared with these highly-formatted documents, a franchise business plan tends to be much shorter and focus on the dream. The main difference is that it must address in detail the economics of both the franchiser and the franchisees - and show how the parent and its affiliates will be able to make money together. The Basics As with any business plan, you should expect to see several sections laid out in a franchise plan, including most vitally an introduction or abstract , a management overview, a marketing strategy, detailed financial projections, and the financial requirements for investing in a purchasing a franchise.
Again, you might want to do additional research - even just spend a few minutes on Google - to learn more about and verify the backgrounds of everyone involved. Where you would normally find industry analysis in a business plan, most franchise business plans typically include a franchise overview, along with a description of the market the franchise would be entering - and its competition.
These should be thorough, and lead seamlessly into a marketing plan. The plan should specify how territories will be carved up, and how many locations per territory a franchisee will be allowed or expected to open. Finally, a franchisor should convey a sense of culture and personality in his or her business plan. Look for a franchisor to display confidence and ambition as well as a sense of loyalty to the prospective franchisees in the proposal.
Will the Marketing Strategy Work? How is the business going to attract new customers? Why will the product or service seem attractive to customers? If you decide to franchise your business, it is vital that you have a good working relationship with the franchisees.
It is important that you are careful to select a franchisee that is a good fit for your franchise business. Are you a young person, indigenous business, franchise, online business or working from home? See what makes your business unique and what help is available. If you plan to buy an existing business, carefully analyse both the advantages and disadvantages, including the history, which is likely to impact the future of the business.
Thinking of starting your own business? Home Planning Business structures and types Franchise.
Again, one of the advantages of a franchise business, in relation to creating a business plan, is that most of this information is readily available from the franchise company. You'll usually find that the franchise company's brochure or website contains sufficient information to complete much of the narrative called for in sections 1 and 3 above.
Creating a Business Plan for Your Franchise. As time passes and you move further into franchise ownership, the business plan you’ve created should be updated and utilized as a guide in helping you reach your franchise goals. Guide to Buying a Franchise; Home-Based Franchises; Information for Franchisees;.
Jan 26, · How to Start a Franchise Business. by: Angelique O'Rourke Franchises. A lot of people are drawn to franchising. Sandwich Shop Franchise Business Plan; Thinking about Buying a Franchise? Consider These Pros and Cons; Video: Joel Libava, /5(9). We would like to show you a description here but the site won’t allow us.
The process of buying a franchise that meets your sales and investment goals starts with creating a business plan. While a franchise business plan differs somewhat from a traditional business plan, it helps you decide if the business is a good idea in the first place. The plan also helps you. Jun 22, · Buying a franchise can be a great move for a would-be entrepreneur who doesn’t want to create a new business from scratch. In theory, franchisees acquire a model that already works on every.