Franchise Business Plan Sample

Franchise Business Plan Sample-40
Instead, they must provide their input based on “what they have seen” in the marketplace.In fact, many franchisors will make the mistake of simply copying the franchise structure of their competitors when entering into the complex world of franchising.

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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.

But in franchising, we are talking about growth on steroids, and this mistake might be multiplied 100 times or more.

And, since there are no expenses associated with this $5,000, this mistake comes right off the bottom line.

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.As previously mentioned, there are legal implications for the franchisor of mentioning projected earnings. 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.And all of these will have implications for the way in which the franchise offer is crafted.Second, this approach assumes that even if a similar strategy is implemented, that the resources of both organizations are similar.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.Third, this approach assumes that a new franchisor’s competitors did it right in the first place. Often, it may take years for a franchisor to realize that an early decision is resulting in diminished profitability. Consider the following example: A franchisor expects that the average unit revenues of their prospective franchisees will be 0,000 and hopes to sell 100 franchises in the first year.But instead of charging a 6% royalty, they opted for 5%.So do the math: ,000 in annual lost royalties multiplied by 100 franchisees = 0,000 Multiplied times a 10 year franchise term (or longer) = ,000,000 Lost enterprise value assuming 10X earnings multiple at exit = TOTAL LOSS ,000,000 And an incorrect royalty is only one of a number of different business decisions that a new franchisor will make early in the process that could impact long-term profitability.Just a few of the many others include: By following the steps outlined above, the business structure and franchising strategy that we ultimately recommend for our clients is based not only on best-practices in franchising and within the client’s industry, but also on a close examination of our client’s culture, goals, business economics, and the resources available to implement a franchise program.


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