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Franchise Business Plan

You’ve finally decided to own a franchise business. Excellent. Entering a marketplace full of competitors and big industry names might seem overwhelming. However, a well-crafted business plan can provide a roadmap to success.

Are you looking to start writing a business plan for your franchise business? Creating a business plan is essential to starting, growing, and securing funding for your business. So we have prepared a franchise business plan template to help you start writing yours.

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Download our free franchise business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

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How to Write a Franchise Business plan?

Writing a franchise business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the entire business plan is ready. Here are some components to add to your summary:

• Start with a brief introduction: Your executive summary should explain why you want to start a franchise business. It should also explain which franchise brand you’re pursuing and what it does. Give a brief overview of how your business will be different.
• Market opportunity: Describe the target market in brief, and explain the demographics, geographic location, and psychographic attributes of your customer. Explain how your franchise business meets its needs. Clearly describe the market that your business will serve.
• Mention your product or services: briefly describe what products or services a customer can expect from your business, depending on your industry and franchise type.
• Management team: Name all the key members of your management team with their duties, responsibilities, and qualifications.
• Financial highlights: Provide a summary of your financial projections for the business’s initial years of operation. Include any capital or investment requirements, startup costs, projected revenues, and profits.
• Call to action: After giving a brief about your business plan, end your summary with a call to action, inviting potential investors or readers to the next meeting if they are interested in your business.

Ensure you keep your executive summary concise and clear, use simple language, and avoid jargon.

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2. Business Overview

Depending on your business’s details, you’ll need different elements in your business overview. Still, there are some foundational elements like business name, legal structure, location, history, and mission statement that every business overview should include:

• Product distribution franchise: This franchise model involves the franchisor providing products and franchisees selling them to consumers. Product distribution franchisees must follow a few guidelines and pay a fee for using trademarks and trademark names.
• Management franchise: Franchisee owners manage the day-to-day operations of management franchises. Franchisees operate independently from the franchisor.
• Business format franchise: Franchisor gives the rights to use the trademarks and trade name to franchisees, but they are heavily involved in how the business operates and provides the service to consumers.
• Company structure of your business , whether it is a sole proprietorship, partnership or something else.
• Location of your business and why you selected that place.
• Ownership: Describe the owners of your franchisee and mention their roles in running it. Who owns what shares in the business, and how each owner helps in the business?
• Mission statement: Include a mission statement that aligns with the franchisor’s statement while highlighting your values and goals.
• Business history: Include an outline of your franchise business’s history and how it came to be in its current position. If you can, add some personality and intriguing details, especially if you got any achievements or recognitions till now for your incredible services.
• Future goals: It’s crucial to convey your aspirations and your vision. Include the vision of where you see your franchisee in the near future.

This section should provide an in-depth understanding of your business. Also, the business overview section should be engaging and precise.

3. Market Analysis

Market analysis provides a clear understanding of the market your business will run along with the target market, competitors, and growth opportunities. Your market analysis should contain the following essential components:

• Target market: Identify your target market and define your ideal customer. Know more about your ideal customer and the products or services they prefer. For instance, an ideal customer may prefer rapid food delivery from a fast food franchisee or unique designs and the latest clothing collection from a clothing brand.
• Market size and growth potential: Provide an overview of the industry. It will include market size, trends, growth potential, and regulatory considerations. Highlight the competitive edge and how your business is different from the rest.
• Competitive analysis: Identify and analyze the local market, including direct and indirect competitors. Evaluate their strengths and weaknesses, and explain how your business can offer qualitative services.
• Market trends: Analyze current and emerging trends in your industry, such as technological changes or customer preferences. Explain how your business will cope with all the trends. For example, people are shifting towards online food ordering, so explain how you plan on dealing with this as a fast food franchisee.
• Regulatory environment: Describe any regulations or licensing requirements that affect your business depending on your industry.

Some additional tips for writing the market analysis section of your business plan:

• Use various sources to gather data, including industry reports, market research studies, and surveys.
• Be specific and provide detailed information wherever possible.
• Include charts and graphs to help illustrate your key points.
• Keep your target audience in mind while writing the business plan.

4. Products And Services

The product and services section of a franchise business plan should describe the specific services and products that will be offered to customers. To write this section should include the following:

• Create a list of the products or services your franchisee will offer. For example, if you own a fast-food franchise, you may include a menu description, pricing strategy, and specific services like takeaway, home delivery, drive-through facility, etc.
• Describe each service: Provide a detailed description of what it entails, the time required, and the qualifications of the professionals who will provide it. For example, a Visual Merchandiser is responsible for creating attractive and effective displays in a clothing franchisee.
• Emphasize safety and quality: In all descriptions of services and products, emphasize the importance of safety and quality. Explain how your franchisee will ensure consumer safety and quality depending on your business.

Overall, a business plan’s product and services section should be detailed, informative, and customer-focused. By providing a clear and compelling description of your offerings, you can help readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

• Develop your unique selling proposition (USP): Clearly define your unique selling propositions; which can be competitive pricing, extraordinary ambiance, brand recognition, etc.
• Marketing strategies: Develop a marketing strategy that includes a mix of online and offline marketing tactics. Consider social media, email marketing, content marketing, brochures, print marketing, and local events.
• Sales strategies: Mention your sales strategy as in – offering discounts, utilizing online delivery, planning royalty programs, partnering with local businesses, etc.
• Customer retention: Describe how your business will retain customers and build loyalty, such as through loyalty programs, special events, or personalized service. Verify if these offers align with franchise policies to avoid future conflicts.

Overall, your business plan’s sales and marketing strategies section should outline your plans to attract and retain customers and generate revenue. Be specific, realistic, and data-driven in your approach, and be prepared to adjust your strategies based on feedback and results.

6. Operations Plan

When writing the operations plan section, it’s important to consider the various aspects of your business processes and procedures involved in operating a business. Here are the components to include in an operations plan:

• Hiring plan: Tell the staffing requirements of your business, including the number of employees needed, their qualifications, and the duties they will perform. Also, mention the perks you will provide to your employees.
• Operational process: As you are owning a franchisee, you should follow the standard operation procedure (SOP) set by your franchisor.
• For example, McDonald’s has strict SOPs covering everything, including strict procedures for cooking, assembling, and packaging food, handling customers, and maintaining a clean environment.
• Equipment & Technology: Describe the types of equipment that will be used in your daily operations, for example. If you own a fast-food franchisee you may require cold storage, a microwave, a refrigerator, etc.

By including these key elements in your operations plan section, you can create a comprehensive plan that outlines how you will run your business.

7. Management Team

The management team section provides an overview of the individuals responsible for running the operations. This section should provide a detailed description of the experience and qualifications of each manager, as well as their responsibilities and roles.

• Key managers: Describe your management team’s key members, roles, and responsibilities. It should include the owners, senior management, and people involved in the business operations, including their education, professional background, and any relevant experience in the industry.
• Organizational structure: Describe the organizational structure of the management team, including reporting lines and how decisions will be made.
• Compensation plan: Describe your compensation plan for the management team and staff, including salaries, bonuses, and other benefits.
• Board of advisors: If you have a board of advisors for your business, then mention them along with their roles and experience.

Describe your franchisee’s key personnel and highlight why your business has the fittest team.

8. Financial Plan

When writing the financial plan section of a business plan, it’s important to provide a comprehensive overview of your financial projections for the first few years of your business.

• Profit & loss statement: Create a projected profit & loss statement that describes the expected revenue, cost of products sold, and operational costs. Your business’s anticipated net profit or loss should be computed and included.
• Cash flow statement: Estimate your cash inflows and outflows for the first few years of operation. It should include cash receipts from clients, vendor payments, loan payments, and any other cash inflows and outflows.
• Balance sheet: Prepare a projected balance sheet, which shows the business’s assets, liabilities, and equity.
• Break-even point: Determine the point at which your franchise business will break even or generate enough revenue to cover its operating costs. This will help you understand how much revenue you need to generate to make a profit.
• Financing needs: Estimate how much financing you will need to start and operate your business. It should include short-term and long-term financing needs, such as business loans.

Remember to be realistic with your financial projections and provide supporting evidence for your estimates.

9. Appendix

When writing the appendix section, you should include any additional information that supports the main content of your plan. This may include financial statements, market research data, legal documents, and other relevant information.

• Include a table of contents for the appendix section to make it easy for readers to find specific information.
• Include financial statements such as income statements, balance sheets, and cash flow statements. These should be up-to-date and show your financial projections for at least the first three years of your business.
• Provide market research data, such as statistics on the size of the industry, consumer demographics, and trends in the industry.
• Include any legal documents such as permits, licenses, and contracts.
• Provide any additional documentation related to your business plans, such as marketing materials, product brochures, and operational procedures.
• Use clear headings and labels for each section of the appendix so that readers can easily find the information they need.

Remember, the appendix section of your franchise business should only include relevant and essential information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

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This franchise business plan sample will provide an idea for writing a successful franchise plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready franchise business plan to impress your audience, download our franchise business plan pdf .

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Frequently Asked Questions

Why do you need a franchise business plan.

A business plan is an essential tool for anyone looking to start or run a successful franchise company. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your franchise business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your franchise business.

How to get funding for your franchise business?

There are several ways to get funding for your franchise business, but one of the most efficient and speedy funding options is self-funding. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Angel investors – Getting funds from angel investors is one of the most sought options for startups.
• Small business grants – there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your franchise business?

There are many business plan writers available, but no one knows your business and idea better than you, so we recommend you write your franchise business plan and outline your vision as you have in your mind.

What is the easiest way to write your franchise business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any franchise business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Home > Blog > Franchise Development > How to Write a Franchise Business Plan

How to Write a Franchise Business Plan

Entrepreneurs who have decided to franchise their business owing to its past success and ability to replicate the business idea will need to write a business plan for a franchise. In many cases, this business plan will share many similarities with business plans for start-ups. However, a fundamental difference is that a franchise business plan must cover two types of target audiences: prospective franchisees as well as their customers.

In a sense, this is what sets a franchise business plan apart from other business plans that may apply to sole proprietors, limited liability companies, partnerships and others. In this article, we explore what a franchise business plan is, why it is important for your franchise business and how to write a business plan for a franchise.

Table of contents:

What is a franchise business plan?

Why you need to create a business plan, why franchisors are looking for business plans from their franchisees, important elements you need to include in your franchise business plan, how to create a franchise business plan, concluding remarks.

A franchise business plan is a document that is prepared by the entrepreneur in question when they wish to franchise a business. This document is extensive and plays an essential role in the business’ future development.

A franchise business plan is a living document that will require input from management and team members and which will be adjusted over time to meet the goals and aspirations of the business owner.

However, in short, a franchise business plan is a “roadmap” which methodically sets out how business objectives will be achieved. It can be used both internally and externally.

Internally, it can be used by management teams to check whether the business is on track with its predetermined objectives.

Externally, it is presented to lenders for financial assistance. Such lenders will then evaluate the depth, complexity and potential for profitability and returns of the business in question. They will then decide whether or not to award a prospective franchisor the necessary capital to proceed with the next step towards franchising their business and the likelihood and time frame for such capital to be repaid.

As a “roadmap” to a franchise business’ future structure, operations, organisational team, marketing strategy , financial projections and more, the importance of a business plan cannot be overstated.

There are several crucial reasons that you should consider when it comes to the question: why write a business plan in the first place?

Here are some of them:

• Clarify and evaluate your franchise business idea from multiple angles for more certainty and higher chances of success.
• Helps with goal setting and expansion/growth plans including sales, marketing and business operations.
• Enables you to identify potential problems that could arise and how you can circumvent them.
• It acts as a way of tracking your progress.
• Gives you more clarity about your financial needs and the projected financial returns you can expect.
• Assists with strategic planning over the short, medium and long term as it involves detailed research into a wide number of stakeholders.
• Communicates your vision to prospective employees and investors, giving them more confidence in your franchise venture.
• Attract funding from investors, banks and lenders.

When a franchisee expresses interest in a franchise opportunity , franchisors may require that these franchisees prepare a business plan.

This business plan is presented to lenders to enable them to assess whether the prospective franchisee is as thoroughly prepared for the business journey ahead to make it as successful as possible.

The primary purpose of determining this is through a detailed business plan that sets out the franchisee’s organisational structure, operations, market research, marketing plans, financial projections and more.

Whereas a franchisor can often offer help to a franchisee in developing their business plan, financial projections are typically not included by the franchisor because this could have important legal ramifications.

A further reason why a franchisor requires a business plan from their franchisees is to determine whether the franchisee is able to handle and abide by the franchise business model whilst serving the franchisor’s customers in a manner that ensures consistency across the brand.

Your franchise business plan should contain several important elements. Although these may differ from one franchisor to the next, some of the sections are standard and uniform across the board.

These may include:

• An executive summary: this is the first page of the franchise business plan and contains a concise summary of everything that is contained in the remainder of the document. As such, it is usually written last. It can be divided into three sections: a business summary, business aims and a financial summary.
• Company description: the company description contains information about the type of business in question, who it is led by, the background, education and previous experience of the owner and what value they bring to the business.
• Mission and vision statement : the mission statement is generally expressed as a sentiment that is about one sentence long. It indicates what purpose the business seeks to achieve. The vision statement on the other hand is what the business’ meaning and purpose is for each of your stakeholders.
• Business structure : since your focus is on creating a franchise business, the business structure to be clarified here is a franchise business.
• Products and services : other aspects that need to be clarified are what products and/or services your business will be providing to its customers. If you are offering a variety of these, consider grouping similar ones together and describing them briefly. If you are only going to offer one product/service or a handful, you can spend more time describing each one in detail.
• Industry analysis : studying the industry in which your franchise business will operate is also important to show lenders that your business idea is viable and replicable. Industry analysis will start with what other companies (i.e. your competitors) are offering the market, what prices they are asking for their products/services, where they are located and how you plan to strategically position your franchise business so that you outperform them.
• Market analysis : as part of the market analysis, you will need to conduct customer segmentation. This will necessarily involve identifying your target market and their needs as well as determining strategies of reaching them and winning them over to your franchise product or service offering.
• Logistics and operations: logistics and operations refer to the actual production or service delivery activities that you will be carrying out, how you will do so, at what cost, where and when, as well as how frequently these logistical aspects will need to be employed.
• Marketing plan: a detailed marketing plan is created after conducting market research and analysis. The plan will contain the strategy through which customers will be marketed to in terms of new promotions/discounts, special offers, company news, raising brand awareness, boosting sales, measuring key performance indicators (KPIs), refining the strategy and measuring its success.
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• Business management and organisational structure: this section will contain details of the leadership and management of your franchise business as well as a brief outline of what skills, knowledge and experience each person brings to the table.
• Financing projections/financial plan: this is possibly the hardest but most important section to prepare because it will undertake number crunching, forecasting and analysis.
• Appendix: use the appendix to attach any relevant documents to support any preceding section of your franchise business plan.

Knowing more about the various elements that go into a franchise business plan, you can now proceed. Below are some steps to follow in the process of how to write a business plan for a franchise.

Step 1: Present your business and your business idea

Since you already have a successful business behind you and you are seeking to branch out into franchising, you need to indicate why your idea can be replicated successfully in different territories.

Talk about the history of the business, the ownership structure, when it started trading and its progress to date.

Discuss your products and/or services mentioning what sets them apart and what benefits they offer. Are you planning on introducing an entirely new concept to the industry? Are there any disadvantages that you foresee and how will you deal with these?

Step 2: Highlight the key features of the industry

Mention any industry regulations that must be abided by, what types of companies dominate the industry and who the major players are, what key features of the industry need to be known, etc.

Step 3: Specify your target market and competitors

Your target market and competitors should be clearly identified as should the market in which you will be operating.

Target markets and ideal customer personas should be identified including their key demographic information and what influences their purchasing decisions.

Clarify what size of market share you aim to acquire and the steps for doing so.

Outline your primary competitors. Pay special attention to emphasising what their advantages and disadvantages are compared to your franchise business offering.

It’s important to never openly criticise your competition. Instead, approach any references to them with due respect.

Step 4: Outline your marketing and sales strategy

What price will you charge for your products or services – low, mid-range or high? What is the unique selling point that you will seek to emphasise? Do your products or services have unique features and how will these be set apart from competitors? Which marketing channels or combinations thereof will you use? What are your monthly, quarterly and annual sales KPIs and how will your marketing strategy help you reach these?

What will your marketing budget be? What measures will you put in place to test, refine and measure the success of your marketing and sales efforts? How will sales be conducted – online, over the phone, or over the counter at a retail outlet? What is your anticipated cost per acquisition? How will you seek to reduce this? How will you differentiate between marketing for franchisees and marketing for your customers?

Step 5: Note your organisational structure and staffing needs

Who will sit on your management team and what skill set do they bring to the table? Who will be responsible for what department in your franchise business?

How many staff members will you start out with? What will their key roles and responsibilities be? How much will it cost you to retain your staff on a monthly basis?

Also important is the recruitment of franchisees. Will you have a dedicated team to train and support these and what kind of support will you offer? What will be the defining characteristics of your franchise offering and unique selling points?

Step 6: Clarify the intricacies of your business operations

Where will the franchise business headquarters be located? In which territories will future franchisees operate? How will the division of territories be undertaken (if any)?

Do you make use of production facilities? If so, how will you streamline your logistics processes to ensure that your franchisees benefit from these operations?

Will you need to make new investments in equipment? How is your existing infrastructure able to support future growth and further expansion?

What are the relationships with your suppliers like and who are they? What sort of pricing structure can they offer your future franchisees to enable them to optimise their investment?

Step 7: Prepare your financial forecasts

Start out by presenting your sales, income, turnover, profit and other historical figures to provide proof of your current business’ success before you turn to franchising. Going back between three to five years should be sufficient.

What is the gross margin on each product? How does capital flow in your business in terms of stock, debtors, creditors, etc.

What major financial investments have you made and what have been the results of these? Offer an updated balance sheet including a profit and loss account. Provide comparisons with industry norms.

Once the historical aspect has been taken care of, it’s also advisable to create forecasts for the next few years. If you make any assumptions for any of your forecasts, each of these should be explained and supported in full.

How realistic are your forecasts? Never try to inflate projected income, sales, profit, turnover or other amounts. Be as realistic as possible. Factor into account that payment delays may occur. How do you plan on dealing with these?

Specify the type and amount of financing you are looking for. Is it a medium- or long-term loan or an increased overdraft facility? What interest rates and instalment amounts can you afford to pay over the loan period?

Franchising your business will require a franchise business plan to put your goals into perspective and to help lenders back your business idea. And although it can be quite a detailed process, there are several key steps you can take to prepare a thorough and detailed business plan to convince lenders to support your franchise business.

In the beginning of the journey to franchising, many franchisors struggle to implement effective strategies and plans to set them up for success. But there is help at hand. Join our How to Grow Your Franchise Sustainably Without Costing Your Personal Life masterclass to find out about how the 5Fs Franchising Model has been implemented successfully across multiple global franchises and how you can achieve a greater work-life balance by prioritising better and making the most of your existing infrastructure and network.

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Franchise Business Plan Template

Written by Dave Lavinsky

Franchise Business Plan Outline

• Franchise Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Start Your Franchise Plan Here

You’ve come to the right place to create your business plan.

We have helped over 10,000 entrepreneurs and prospective franchisees with how to create a business plan to start a new franchise or grow their existing franchise.

How To Write a Franchise Business Plan & Sample

Below is are links to each of the key elements of a compelling business plan to help you start your own franchise business:

• Executive Summary – The Executive Summary provides a high-level overview of your business plan. It should include your franchise brand, mission statement, as well as information on the products or services you offer, your target market, and your business goals and objectives.
• Company Overview – This section provides an in-depth business description, including information on your franchise’s history, the company’s business model, ownership structure, and management team. You will also include a copy of your franchise agreement.
• Industry Analysis – In the Industry Analysis section, you will provide an overview of the industry in which your business operates including market size, trends, and competition.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to attract customers to your business. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – The Competitive Analysis section will provide an overview of your direct and indirect competitors, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your franchise from the competition.
• Marketing Plan – In the Marketing Plan section, you will detail your marketing strategies, including your marketing initiatives and promotion plans. You will also discuss your pricing strategy and how you intend to position your own business in the market.
• Operations Plan – This section will provide an overview of your store’s operations, including your store layout, staff, and inventory management.
• Management Team – The Management Team section will provide detailed information on your management team, their relevant experience, and their roles in the company.
• Financial Plan – The Financial Plan includes the company’s financial details and financial performance representations as provided in the Franchise Disclosure Document (FDD). Financial statements including a projected profit and loss statement, balance sheet, and cash flow statement should be included in the appendix section.

Next Section: Executive Summary >

Free Franchise Business Plan Template PDF

You can download our free franchise business plan template PDF here. This is a sample franchise business plan template you can use in PDF format. You can easily complete your business plan using our Franchise Business Plan Template here .

Franchise Business Plan FAQs

What is a franchise business plan.

A business plan is a plan to start and/or grow your franchise business . Among other things, it outlines your business concept, identifies your target audience , presents your marketing strategy and details your financial projections..

What Are the Main Sources of Revenues and Expenses for a Franchise Business?

The main sources of revenue for a business franchise are franchise fees and royalty fees. Some also earn from other fees like distribution fees, site assistance fees, training fees, technologies, and rebates.

The key expenses for franchises are inventory, payroll, marketing and advertising, rent and loans.

How Do You Get Funding for Your Franchise Business?

Among the most common sources of funding for a franchising business are commercial bank loans, Small Business Administration (SBA) loans, personal savings and friends and family loans/gifts. There are also lenders that can supplement other loans with equipment financing and business lines of credit for franchise businesses.

This is true for a business plan for a franchise restaurant, a business plan for franchise store, or any other franchise business plans.

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How To Create A Franchise Business Plan

Embarking on the journey of establishing on how to create a  franchise business plan can be an exhilarating venture, full of promise and potential. Yet, in the dynamic world of entrepreneurship, success is often rooted in meticulous planning and strategic foresight. A key pillar in the foundation of a flourishing franchise is the creation of a well-structured and thoughtful business plan. Whether you’re a prospective franchisee eager to chart your path or a seasoned franchisor aiming for expansion, understanding how to create a franchise business plan is the compass that can guide your success. 

In this comprehensive guide, we delve into the intricacies of crafting a robust franchise business plan, exploring the vital components that transform aspirations into actionable strategies. Join us on this journey as we unravel the art and science behind creating a roadmap for franchise success.

Table of Contents

What is a franchise business plan, why do you need a franchise business plan, what are the main types of a franchise, analysis of the local market, analysis of the local, regional and national competition.

A franchise business plan is a comprehensive document that outlines the strategic roadmap for both the franchisor and franchisee, providing a detailed framework for the successful establishment and operation of a franchise. This document encompasses various crucial elements, including the franchise concept, market analysis, financial projections, and operational strategies. 

It delineates the rights and responsibilities of both parties, delineates the franchise model, and addresses key factors such as training, marketing, and ongoing support. A question on how to create a franchise business plan is crucial for both attracting potential franchisees and ensuring the successful expansion and management of the franchise network. It provides a comprehensive overview of the business opportunity, sets expectations, and serves as a reference point for all stakeholders involved in the franchising process.

The plan serves as a guiding tool, offering insights into the target market, competition, and potential risks. Additionally, it provides a structured approach to financial planning, helping stakeholders make informed decisions. Overall, a well-crafted franchise business plan serves as a foundational document, fostering clear communication, strategic alignment, and long-term success within the franchising relationship.

A franchise business plan is a fundamental and essential tool for various reasons, serving both the franchisor (the business owner granting the franchise) and potential franchisees. Here are several key reasons why having a franchise business plan is crucial:

• For Franchisors: It provides a strategic roadmap for the expansion of the business through franchising. A well-thought-out plan outlines the goals, objectives, and steps needed to grow the franchise network successfully.
• For Franchisees: It offers a clear understanding of the franchisor’s vision, mission, and strategic direction. Franchisees can align their goals with the overall business strategy outlined in the plan.
• For Franchisors: It promotes transparency with potential franchisees. The business plan outlines the franchise opportunity, the business model, and the franchisor’s expectations, fostering trust and credibility.
• For Franchisees: It provides clarity on what is expected from them, including initial investment, ongoing fees, and operational requirements. This transparency helps potential franchisees make informed decisions.
• For Franchisors: A comprehensive business plan is often required when seeking financing or investors to support the expansion of the franchise. It demonstrates a well-thought-out strategy and financial viability.
• For Franchisees: Some franchisees may seek financing to launch their businesses. A solid business plan can be instrumental in securing loans or attracting investors.
• For Franchisors: It helps ensure legal compliance with franchise regulations. The business plan includes details about the Franchise Disclosure Document (FDD) and the franchise agreement, addressing legal considerations and requirements.
• For Franchisees: Understanding the legal aspects of the franchise is crucial. The business plan provides insights into the legal framework within which the franchise operates.
• For Franchisors: It aids in financial planning for the franchisor’s expansion strategy. The business plan includes financial projections, helping to assess the feasibility and profitability of franchising.
• For Franchisees: It allows potential franchisees to understand the financial requirements, including initial investment, ongoing fees, and potential returns. This information is crucial for making informed financial decisions.
• For Franchisors: It outlines the operational guidelines and support provided to franchisees. This ensures consistency across the franchise network and helps maintain the brand’s integrity.
• For Franchisees: It serves as a guide on how to operate the franchise successfully. The operational plan provides insights into the day-to-day requirements and standards expected by the franchisor.
• For Franchisors: It outlines the marketing and sales strategy for attracting potential franchisees. A well-structured plan helps in promoting the franchise opportunity effectively.
• For Franchisees: It provides information on how the franchisor plans to market and promote the overall brand, which contributes to the franchisee’s success.

Source: Photo by iStockphoto

A franchise business plan is essential for both prospective franchisees and franchisors. It serves as a roadmap for the business and helps outline key elements that contribute to its success. Here are the key components that should be included in a franchise business plan:

Executive Summary :

The executive summary is a concise overview of the entire business plan, providing a snapshot of the franchise’s key elements. It should encapsulate the franchise’s mission, goals, and a brief summary of each section of the plan, offering potential investors and stakeholders a quick understanding of the business’s direction and value proposition.

Business Description :

In this section, provide a detailed overview of the franchise concept, highlighting its uniqueness and value proposition in the market. Discuss the franchise’s history, background, and development, including any notable milestones or achievements. This narrative should convey the brand’s story and its journey to its current position, establishing a compelling narrative for investors and franchisees.

Franchise Model :

Clearly define the franchise model, specifying the type of franchise (e.g., retail, service, manufacturing) and its operational structure. Detail the rights and responsibilities of both the franchisor and the franchisee, outlining the contractual agreements, support systems, and operational guidelines that govern the franchising relationship. Clarity in the franchise model ensures alignment and understanding between all parties involved.

Market Analysis :

Conduct a comprehensive analysis of the target market, delving into demographic trends, consumer behavior, and competitive landscape. Identify the target audience and their preferences, as well as competitors operating within the same market space. Analyze market trends and potential demand drivers to assess the market’s viability and growth prospects, informing strategic decisions and marketing initiatives.

SWOT Analysis :

Perform a SWOT analysis to assess the franchise’s internal strengths and weaknesses, as well as external opportunities and threats. Identify areas of competitive advantage, such as proprietary technology or strong brand recognition, as well as areas needing improvement, such as operational inefficiencies or market saturation. Use this analysis to develop strategies for leveraging strengths, addressing weaknesses, capitalizing on opportunities, and mitigating threats, enhancing the franchise’s competitive position.

Franchisee Requirements :

Outline the qualifications and characteristics of an ideal franchisee, including skills, experience, and financial capabilities. Specify the financial requirements for prospective franchisees, detailing initial investment costs, ongoing fees, and potential revenue streams. Clear communication of franchisee requirements ensures alignment between franchisors and potential investors, reducing the risk of misunderstandings or mismatches.

Training and Support :

Describe the training programs provided to franchisees, covering topics such as product knowledge, operational procedures, and customer service standards. Detail ongoing support mechanisms, including marketing assistance, operational guidance, and technology support, designed to empower franchisees and facilitate their success. Robust training and support systems are essential for maintaining consistency and quality across the franchise network.

Marketing and Sales Strategy :

Outline the marketing plan for the franchise, encompassing both corporate-level and franchisee-level initiatives. Define the target market segments, positioning strategies, and promotional tactics aimed at attracting customers and driving sales. Develop sales strategies and targets, setting clear objectives and performance metrics to measure success. A cohesive marketing and sales strategy ensures brand visibility, customer engagement, and revenue growth for the franchise.

Financial Projections :

Provide detailed financial forecasts, including income statements, balance sheets, and cash flow projections, for both the franchisor and potential franchisees. Include assumptions used in creating the financial projections, such as sales forecasts, pricing strategies, and cost structures. Financial projections provide stakeholders with a clear understanding of the franchise’s revenue potential, profitability, and return on investment, guiding investment decisions and business planning.

Legal Structure and Agreements :

Clearly define the legal structure of the franchise, including entity formation, ownership arrangements, and regulatory compliance. Include details of the franchise agreement, disclosure documents, and any other legal agreements governing the franchising relationship. Addressing legal considerations upfront ensures transparency, accountability, and adherence to legal requirements, mitigating legal risks and liabilities.

Risk Analysis :

Identify potential risks and challenges associated with the franchise, assessing their likelihood and potential impact on the business. Common risks may include market volatility, regulatory changes, operational disruptions, or competitive threats. Develop strategies for risk mitigation, such as diversification, contingency planning, or insurance coverage, to protect the franchise’s interests and ensure business continuity.

Operational Plan :

Outline the day-to-day operations of the franchise, detailing key processes, workflows, and performance standards. Discuss the supply chain management, production processes, and quality control measures implemented to maintain operational efficiency and product/service excellence. An operational plan provides a roadmap for executing the franchise’s business model effectively, ensuring consistency and reliability across the franchise network.

Exit Strategy :

Provide a plan for the potential sale or exit from the franchise, considering factors such as succession planning, transfer of ownership, or business dissolution. Evaluate various exit options and develop contingency plans to mitigate potential risks and maximize value for stakeholders. A well-defined exit strategy provides clarity and direction for navigating transitions in ownership or market conditions, safeguarding the franchise’s long-term viability.

Include any additional documents or supporting materials that supplement the business plan, such as resumes of key personnel, market research data, legal documents, or financial statements. The appendix serves as a repository for relevant information that provides additional context and credibility to the business plan, enhancing its comprehensiveness and persuasiveness.

Remember that the specific details included on how to create a franchise business plan may vary depending on the nature of the franchise concept, industry dynamics, and target market characteristics. It’s important to customize the business plan to align with the unique needs, goals, and circumstances of the franchise, ensuring its relevance and effectiveness as a strategic tool for business growth and success.

Franchises come in various forms, catering to different industries and business models. The main types of franchises are:

• This type involves the distribution of a franchisor’s products through a network of independent retailers. Franchisees benefit from the established brand and product line, focusing primarily on sales and distribution. Examples include beverage distributors, automotive parts suppliers, and consumer goods distributors.
• Widely prevalent, business format franchises provide a comprehensive system encompassing not only products but also services, trademarks, and operational support. Franchisees gain access to a proven business model, standardized processes, and ongoing assistance. Popular examples include fast-food chains, retail outlets, and service-oriented businesses.
• In a management franchise, the franchisor offers support in various aspects of business management, including marketing strategies, employee training, and operational guidance. Franchisees take on the role of managing the day-to-day operations while leveraging the expertise and support provided by the franchisor. This model is common in industries like hospitality and business services.
• Single-unit franchises involve the ownership and operation of a single location. In contrast, multi-unit franchises empower entrepreneurs to own and manage multiple units within a specified territory. Multi-unit franchising offers economies of scale and broader market coverage, allowing for increased profitability.
• Master franchisees hold the rights to operate and sell franchises within a designated territory. They act as intermediaries between the franchisor and sub-franchisees, facilitating expansion and providing localized support. Master franchises are often found in international expansion strategies.
• Existing businesses can opt for a conversion franchise model, where they transition into a franchise system. This approach allows established businesses to benefit from a proven brand, operational framework, and expanded market reach while maintaining some degree of autonomy.
• Similar to master franchising, area development franchises involve a commitment to opening a specific number of units within a predefined area. Area developers typically have exclusive rights to that territory, overseeing both the development and support of sub-franchisees.
• Co-branding franchises bring together two or more complementary brands or services in a single location. This strategy leverages shared customer bases and resources, providing consumers with a diverse range of products or services. Examples include coffee shops within bookstores or automotive service centers with convenience stores.
• Home-based franchises allow entrepreneurs to operate businesses from the comfort of their homes, minimizing the need for physical office space. This model is common in industries such as consulting, tutoring, or digital marketing services.

Understanding the nuances of these franchise types is crucial for prospective franchisees and franchisors, as it influences the structure, operations, and scalability of the business. Choosing the right franchise model depends on factors such as industry, market dynamics, and individual preferences.

An essential component of the franchise business plan is the analysis of the local market. This involves a detailed examination of the specific geographic area where the franchise will operate. Factors such as demographic trends, consumer behavior, and local economic conditions must be considered. Understanding the unique characteristics of the local market allows franchisors and franchisees to tailor their strategies to meet the specific needs and preferences of the target audience. 

This analysis should cover aspects such as consumer purchasing power, cultural influences, and any local regulations that may impact the business. A well-informed understanding of the local market is crucial for developing effective marketing campaigns, setting appropriate pricing strategies, and ensuring the overall success of the franchise within its specific community.

In addition to local market analysis, evaluating the competition at the local, regional, and national levels is vital. Identify existing businesses offering similar products or services and assess their strengths, weaknesses, and market positioning. Understanding the competitive landscape helps in formulating strategies to differentiate the franchise and capitalize on unique selling propositions. 

Regional and national competition analysis provides insights into broader market trends and potential challenges that may arise. By conducting a thorough examination of competitors, franchisors and franchisees can refine their value propositions, pricing strategies, and marketing tactics to gain a competitive edge. This analysis is integral to making informed decisions and adapting strategies based on the dynamics of the broader market.Top of Form

In conclusion, a question on how to create a franchise business plan is a meticulous process that involves careful consideration of various factors. From defining the franchise concept to analyzing local and broader market dynamics, the plan serves as a comprehensive guide for all stakeholders involved in the franchising process. It not only outlines the strategic roadmap for expansion but also enhances transparency, attracts investors, and ensures legal compliance. 

On how to create a franchise business plan, Your Franchise Fit is committed to providing guidance and support at every step of the way. Whether you are exploring franchise opportunities, seeking assistance in crafting a business plan, or require insights into the intricate world of franchising, our expertise is here to assist you.

Contact us today or more information and personalized details tailored to your unique aspirations and business goals. Your Franchise Fit is dedicated to helping you embark on a successful and fulfilling journey in the world of franchising.

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Developing a Franchise Business Plan: Key Elements to Include

Aug 15, 2023 | Blog

When embarking on the franchising journey, a well-crafted business plan is essential to guide your expansion and attract potential franchisees. A comprehensive franchise business plan outlines your vision, market analysis, financial projections, and operational considerations. In this article, we will explore the key elements to include in your franchise business plan and provide tips for creating a compelling document that captures the attention of potential franchisees.

Executive Summary:

Begin your franchise business plan with a compelling executive summary that provides an overview of your franchise concept, target market, and growth potential. Highlight the unique selling points of your franchise and emphasize the benefits for franchisees. This section should grab the reader’s attention and set the stage for the rest of the plan.

Franchise Concept and Market Analysis:

Detail your franchise concept, including your brand’s unique value proposition, target market, and competitive landscape. Conduct a thorough market analysis to identify your ideal customer profile, market trends, and potential demand for your franchise. This section should demonstrate your understanding of the market and why your franchise stands out among competitors.

Franchisee Support and Training:

Outline the support and training programs you will provide to franchisees. Describe the initial training process, ongoing support, and any resources or tools available to help franchisees succeed. Highlight your experience in franchising and how you will assist franchisees in achieving their goals.

Financial Projections:

Include detailed financial projections that outline your franchise’s potential revenue, expenses, and profitability. Provide a breakdown of the initial investment required, including franchise fees, equipment costs, and working capital. Project future sales and expenses based on market analysis, industry benchmarks, and historical data. This section should demonstrate the financial viability of your franchise opportunity.

Marketing and Advertising Strategy:

Detail your marketing and advertising strategy to attract potential franchisees and support franchisees’ growth. Identify the target audience, channels, and tactics you will use to generate brand awareness and drive sales . Discuss how you will support franchisees in local marketing efforts and provide marketing materials, campaigns, and digital strategies to help them succeed.

Operations and Systems:

Describe the operational aspects of your franchise, including your business model, supply chain management, quality control processes, and technology systems. Explain how you will ensure consistency across franchise locations and maintain high operational standards. Highlight any proprietary systems, software, or processes that set your franchise apart.

Legal and Compliance:

Address the legal and compliance requirements of franchising, including franchise disclosure documents , franchise agreements, and regulatory obligations. Ensure your franchise business plan reflects your commitment to all legal and industry regulations. Consider consulting with legal professionals experienced in franchising to ensure compliance and mitigate any potential risks.

Tips for Creating a Compelling Business Plan:

• Clearly articulate your unique value proposition and competitive advantage.
• Use data and market research to support your claims and projections.
• Include visual elements such as charts, graphs, and images to enhance readability.
• Keep the document concise, focused, and well-organized.
• Use a professional tone and language to convey credibility and expertise.
• Tailor the plan to address the needs and interests of potential franchisees.

Developing a comprehensive franchise business plan is a critical step in attracting potential franchisees and guiding the growth of your franchise. By including key elements such as market analysis, financial projections, operational considerations, and a compelling executive summary, you can present a clear and enticing vision to potential franchise partners.

Remember to continuously update and refine your business plan as your franchise evolves and new opportunities arise. With a well-crafted business plan, you are better positioned to attract and engage franchisees who share your passion and vision for success.

If you need assistance developing a franchise business plan or want expert guidance in the franchising process, contact Accurate Franchising, Inc today . Our team of experienced consultants is ready to help you achieve your franchising goals.

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How to Start a Franchise

9 min. read

Updated January 5, 2024

Franchising offers a pathway to business ownership that takes advantage of a proven idea and strong brand. You lose some autonomy and control—but get to work from an established playbook, learn from a successful franchisor, and, most notably not have to start a business from scratch .

So, is becoming a franchisee the best way to start a business? 

Learn how to choose and start a franchise that fits your interests.

• What is a franchise?

A franchise is a business owned by an individual (franchisee) but branded and supervised by a larger company (franchisor). Common examples include Subway, 7-11, and Hilton Hotels. 

Purchasing a franchise grants you the right to use a tested business model, pricing, products, and marketing strategies. 

Additionally, franchisees gain access to the company’s trademarked materials like logos and slogans—essential for establishing a brand identity.

• How to start a franchise

While you get to bypass idea creation , customer validation , and brand development —there are still critical steps unique and similar to starting any other business.

1. Know your budget

There is always an upfront franchise fee, and franchisors often have financial requirements for potential franchisees. For example, some franchisors require franchisees to have a particular net worth.

Review your finances and assets to look for opportunities in line with your price range. Determine how you’ll finance the franchise, whether through personal savings, bank loans, or franchisor financing options.

2. Do your research:

You don’t want to waste time dreaming up your plans to open a specific franchise only to look at the fine print and realize it’s not a good fit.

For example: A Cafe Yumm franchisee must have a net worth of $500,000. If that isn’t where you’re at financially, look elsewhere.

Contact a current franchisee to learn more about the business if you can. What are their perceived pros and cons? What’s it like working with this brand? Are there any significant costs associated with this franchise?

Additionally, you need to check if a franchise is already running in your area. If so, the franchiser may be unlikely to approve another location in such close proximity. 

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3. Participate in an interview

A unique aspect of starting a franchise is that it’s not entirely up to you. You have to interview, almost like you’re applying for a job.

The format will depend on which franchiser you choose. The goal will be for you and the franchisor to review the specifics and determine if the franchise is right for you. 

Take note of how much support the franchisors offer during setup and if they provide ongoing training.

4. Write a business plan

A benefit of starting a franchise is that many important aspects are well-established. However, you still need a business plan to cover how you will run your business, forecast sales and expenses, and outline employee needs.

Most importantly, you need a thorough market analysis that shows how this franchise will work in your local market. At a minimum, you need to detail who your target customers are and how they relate to or differ from the current franchise customer base. Luckily, most franchises offer assistance with this part of the process.

Check out our business planning hub to learn more about writing a franchise business plan .

5. Choose a suitable franchise location

Selecting a location can be complicated by specific requirements from the franchise owner. Size, setup, and even the atmosphere surrounding the business may limit your options.

Then, you must consider if the location makes sense from a performance standpoint. 

• Is it going to attract your core customer base? 
• Is there enough foot traffic?
• Is your business easily accessible?

Hopefully, the franchisor will assist in this process. If not, check out our complete guide on selecting a business location for more specific steps.

6. Sign the franchise agreement and review the FDD

Before you sign a binding contract outlining mutual obligations between you and the franchisor—you need to review the Franchise Disclosure Document (FDD) document. 

The FDD contains a wealth of information, including:

• The franchisor’s background: History, business experience, and any litigation or bankruptcy history.
• Financial statements: Provides a clear picture of the franchisor’s financial health.
• Initial and ongoing costs: Details about the initial franchise fee, training costs, grand opening costs, royalty fees, and other related expenses.
• Training and assistance: Information on the training and support the franchisor will provide.
• Franchisee obligations: What is expected of the franchisee in terms of purchasing equipment, maintaining standards, advertising, etc.
• Territory: Whether the franchisee will have exclusive rights to a territory and the specifics of any territorial protection.
• Trademarks: Information about the franchisor’s trademarks, copyrights, and proprietary information.
• Renewal, termination, and transfer: The terms under which the franchise relationship can be renewed, terminated, or transferred.
• List of current and former franchisees: Contact information for current franchisees and those who have left the system recently.
• Earnings claims: If provided, details about the financial performance of existing units, though not all franchisors include this information.
• Restrictions: Details on any restrictions on what can be sold, sourcing and supply, and territory.

Before signing the FDD, review it carefully, preferably with the help of a lawyer . 

7. Make your business legal

Aside from the franchise agreement and FDD, additional legal requirements exist to start your franchise.

• Set up a business structure: The franchisor may specify which business structure you must use.
• Federal and state registrations: At a minimum, you must apply for federal and state tax IDs. However, there may be additional requirements depending on your location.
• Business licenses & permits: Depending on the location and nature of the franchise, various local, state, or federal licenses and permits may be required.
• Tax registrations: Franchisees must register for appropriate federal, state, and local tax identification numbers and comply with tax obligations.
• Insurance requirements: Franchisees often need various insurance coverages, such as liability, property, workers’ compensation, and more, as mandated by law or the franchisor.

8. Stay updated on franchisor policies

Most franchisors provide training programs for new franchisees that cover everything from business operations to customer service.

However, this initial training may not cover everything, and franchisors may update their policies, marketing strategies, or product offerings. 

Staying aligned with these changes ensures brand consistency and can impact the franchise’s success.

Dig deeper:

Should you open a franchise or start a business?

If you’re reading this, you’re likely more interested in opening a franchise than starting a new business. To be sure of your decision, let’s weigh the pros and cons of both options.

Things to consider when comparing franchise opportunities

Choosing the right franchise can be as challenging as developing a good business idea. Simplify the process and use these seven factors to help vet and select the right franchise.

History of franchising

Become familiar with how franchising has evolved into the business model it is today.

• Common types of franchises

Franchising spans a wide range of industries. While there are countless specific franchise concepts—you can group them into several common categories:

Food and beverage 

Establishments that prepare and serve meals and drinks, ranging from quick-service to full-service dining.

• Fast-food restaurants (e.g., McDonald’s, Subway)
• Sit-down restaurants (e.g., Applebee’s, IHOP)
• Coffee shops (e.g., Dunkin’ Donuts)
• Ice cream and dessert parlors (e.g., Baskin-Robbins, Dairy Queen)

Businesses that sell goods directly to consumers from physical locations offering a variety of tangible products.

• Convenience stores (e.g., 7-Eleven)
• Specialty stores (e.g., The UPS Store, GNC)

Franchises providing specialized services to individuals or businesses—emphasizing expertise or personalized care.

• Home services (e.g., Molly Maid, Mr. Handyman)
• Automotive services (e.g., Jiffy Lube, Midas)
• Health and fitness centers (e.g., Anytime Fitness, Gold’s Gym)
• Educational services (e.g., Kumon, Sylvan Learning)

Business-to-Business (B2B)

Franchises that cater to other businesses, offering services that enhance business operations or efficiency.

• Printing and promotional services (e.g., Minuteman Press, FastSigns)
• Professional consulting and coaching (e.g., ActionCOACH)
• Commercial cleaning (e.g., Jan-Pro, Coverall)

Real estate

Operate in the property market, assisting in buying, selling, or leasing properties, with a focus on market expertise.

• Coldwell Banker

Franchises that provide accommodations for travelers, including hotels and motels, emphasizing comfort and amenities.

• Hilton Hotels
• Marriott International
• Holiday Inn

Personal care

Focus on enhancing appearance and well-being, offering services like grooming, beauty treatments, and wellness.

• Hair salons (e.g., Great Clips, Supercuts)
• Spas and beauty treatments (e.g., Massage Envy)

Centered around leisure and entertainment, providing venues or services for relaxation and fitness.

• Children’s entertainment centers (e.g., Chuck E. Cheese’s)
• Fitness and recreational sports centers (e.g., Planet Fitness, Club Pilates)

Cater to niche markets or unique services not covered in other categories, such as specific demographics or specialized needs.

• Pet services (e.g., Petland, Dogtopia)
• Restoration and disaster recovery services (e.g., SERVPRO)
• What franchise should you choose?

It can be quite challenging to choose a franchise since there are over 3,000 different concepts available. 

How do you narrow it down to one? Here are three tips:

1. Figure out what you’re good at

While you’re not coming up with a business idea , you can still use the same tactics to identify a winning franchise opportunity. The easiest place to start is by identifying and listing out your skills, strengths, and passions.

Maybe you’re a relationship-builder, an operations expert, or already have experience working with a franchise. 

If you’re struggling to identify what you’re good at, consider conducting a SWOT analysis on yourself. This will give you a structured way to assess your strengths, weaknesses, opportunities, and threats.

2. Match your skills to franchise opportunities

Use your skills as a reference when exploring franchise opportunities. Remember, you must be a good match for the franchise owner. 

Having industry-specific experience or skills can help sell them on your ability to run their specific type of business.

For instance, if you’re drawn to a commercial cleaning franchise because it’s B2B and aligns with your sales skills. 

3. Keep an eye on market trends

Be vigilant about consumer and business trends to ensure your franchise choice is relevant.

Take note of popular opportunities, but don’t jump on them immediately. Do your due diligence and determine if the franchise trend is sustainable and not a fleeting fad.

As always, fall back on market research to understand consumer spending habits. If the franchise category you’re interested in shows customers straying away from known brands—it may not be the right time to jump in. 

• Start your franchise

Cooking up a brand new business idea has its value, but there’s no reason you can’t piggyback on a time-tested method and reap the benefits—as many franchisees are already doing today. 

If you’re interested in buying a franchise to start or run your own business, learn all you can before you buy.

With planning and thoughtful execution, a franchise business can be just as rewarding as any other startup.

Check out our complete guide on starting a business to ensure you’re prepared to open a successful franchise.

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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How to Create a Winning Franchise Business Plan: Tips from Franchise Genesis

Your blueprint for success: expert strategies to build a strong foundation for your franchise journey.

Creating a successful franchise begins with a strong foundation, and that foundation is your franchise business plan. Whether you're launching your first franchise or expanding an existing network, a well-crafted business plan is essential for guiding your operations, attracting investors, and setting the stage for long-term success. At Franchise Genesis, we know that the process can be daunting, but with over 100 years of combined experience in the franchising industry, our team of experts is here to help you navigate the complexities.

A winning franchise business plan isn't just a document—it's a strategic tool that outlines your vision, defines your market, details your operational strategies, and forecasts your financials. It’s the roadmap that turns your franchise concept into a thriving business. In this blog post, we'll share expert tips on how to create a comprehensive and compelling franchise business plan that not only meets industry standards but also positions you for success in a competitive market. From market research and financial planning to legal compliance and growth strategies, we’ll cover all the key elements you need to include. Let’s get started on building the blueprint for your franchise success.

1. Understand the Purpose of Your Franchise Business Plan

Before you start crafting your franchise business plan, it's crucial to understand its purpose. A well-structured business plan serves multiple important functions that are essential for your franchise’s success:

• Guidance for Your Operations: Your business plan acts as a strategic roadmap, outlining your vision, objectives, and the strategies you'll employ to achieve them. It provides a clear path forward, helping you and your team stay focused on your goals.
• Attracting Investors: For potential investors, your business plan is a key document that demonstrates the viability and profitability of your franchise. A well-prepared plan shows that you've thought through every aspect of your business, from market opportunities to financial projections, which increases investor confidence.
• Blueprint for Daily Operations: The business plan serves as an operational guide, detailing everything from marketing strategies to financial forecasts. This ensures that all franchise activities are aligned with your overall goals, and helps franchisees understand the expectations and standards they need to meet.

Understanding these functions will help you prioritize the most critical elements of your plan, ensuring that it serves as a comprehensive guide for launching, managing, and growing your franchise.

2. Conduct Thorough Market Research

Market research is the backbone of a strong franchise business plan. It provides the data and insights needed to make informed decisions about your franchise’s direction and positioning. Here's how to approach it:

• Industry Analysis: Start by examining the industry in which you’ll be operating. Look at current trends, growth projections, and potential challenges. Understand the competitive landscape, including who the major players are, what they offer, and how they are positioned in the market. This analysis will help you identify opportunities and potential threats, which are crucial for strategic planning.
• Target Market Identification: Next, define your target market with precision. Who are your ideal customers? What are their demographics, needs, preferences, and purchasing behaviors? Understanding your target audience will allow you to tailor your products, services, and marketing strategies to meet their specific needs, giving you a competitive edge.
• Competitive Analysis: Knowing your competition is just as important as knowing your customers. Conduct a thorough competitive analysis to identify who your competitors are, what they’re offering, and how they position themselves in the market. Assess their strengths and weaknesses, and look for gaps in the market that your franchise can fill. This will help you position your franchise in a way that differentiates it from the competition.

Conducting comprehensive market research will provide you with the information needed to make strategic decisions, helping you create a franchise business plan that is realistic, data-driven, and positioned for success.

3. Define Your Franchise Concept

Your franchise concept is the heart of your business plan. It encompasses everything from your brand identity to the products and services you offer. A clear and compelling franchise concept will help potential franchisees and investors understand what makes your franchise unique and valuable. Here’s how to define it:

• Brand Identity: Start by clearly articulating your brand’s mission, values, and unique selling propositions (USPs). Your brand identity should reflect what your franchise stands for and what sets it apart from the competition. Whether it’s a commitment to quality, exceptional customer service, or innovative products, make sure your brand’s core attributes are clear and compelling.
• Products and Services: Next, describe the products or services your franchise offers. Detail their features, benefits, and pricing structure. Explain how they meet the needs of your target market and why they’re better than what competitors offer. It’s important to demonstrate that your franchise offers something of real value to customers.
• Franchise Model: Finally, outline your franchise model in detail. This includes the structure of the franchise agreement, the initial franchise fee, ongoing royalties, and the support you’ll provide to franchisees. Be clear about the roles and responsibilities of both the franchisor and the franchisee. This section should also cover any training programs, marketing support, and operational guidance that will be provided to help franchisees succeed.

Defining your franchise concept clearly and effectively is crucial for communicating the value of your franchise to potential franchisees and investors.

4. Develop a Comprehensive Marketing Strategy

A robust marketing strategy is essential for the success of any franchise. It’s not enough to simply open your doors and hope customers will come—you need a strategic approach to attract and retain customers. Here’s how to develop a marketing strategy that drives results:

• Branding and Positioning: Your brand is your franchise’s identity, so it’s important to develop a strong brand that resonates with your target market. This includes your brand’s visual identity (logo, colors, etc.), messaging, and overall positioning in the market. Your branding should be consistent across all marketing channels to create a cohesive and recognizable brand image.
• Marketing Channels: Identify the most effective marketing channels for reaching your target audience. This could include digital marketing (social media, email marketing, SEO), traditional advertising (print, radio, TV), and public relations efforts. It’s important to choose channels that align with your target market’s preferences and behaviors.
• Promotional Strategies: Outline the specific promotional tactics you’ll use to attract customers and drive sales. This could include special offers, loyalty programs, events, and partnerships. Consider how you’ll generate leads, convert them into customers, and keep them coming back.
• Budget: Finally, allocate a budget for your marketing activities and track the return on investment (ROI) for each campaign. It’s important to monitor the effectiveness of your marketing efforts and adjust your strategy as needed to maximize results.

A well-developed marketing strategy will not only help you attract customers but also build brand loyalty and drive long-term growth for your franchise.

5. Outline Your Operations Plan

Your operations plan is the blueprint for how your franchise will run on a daily basis. It covers everything from staffing and training to supply chain management and customer service. A detailed operations plan ensures that your franchise operates smoothly and consistently across all locations. Here’s what to include:

• Location and Facilities: Start by describing the ideal location for your franchise. Consider factors such as visibility, accessibility, foot traffic, and proximity to competitors. You should also detail the type of facilities required, including layout, size, and any specific equipment or amenities needed.
• Staffing and Training: Outline your staffing requirements, including the number of employees needed, their roles and responsibilities, and any specific qualifications or skills required. Describe your training programs for franchisees and their employees, including initial training and ongoing professional development. This ensures that all team members are equipped to deliver the high standards expected by the franchise.
• Suppliers and Vendors: Identify key suppliers and vendors for your products or services. Establish relationships and negotiate terms to ensure consistent quality, pricing, and reliability. It’s important to have a reliable supply chain to maintain the quality and availability of your offerings.
• Operational Procedures: Develop standard operating procedures (SOPs) for all aspects of your franchise, including customer service, inventory management, quality control, and compliance with regulations. SOPs ensure that all franchise locations operate consistently and efficiently, providing a consistent experience for customers.

By outlining a detailed operations plan, you provide franchisees with a clear and structured guide for running their business, which helps ensure consistency, quality, and efficiency across the franchise network.

6. Create a Financial Plan

A strong financial plan is one of the most critical components of your franchise business plan. It provides a detailed overview of your expected revenues, expenses, and profitability, offering potential franchisees and investors a clear understanding of the financial viability of your franchise. Here's how to develop an effective financial plan:

• Startup Costs: Begin by detailing the startup costs associated with launching your franchise. This includes the initial franchise fee, the cost of leasing or purchasing a location, equipment purchases, inventory, marketing expenses, and working capital. Be as detailed as possible to give an accurate picture of the financial commitment required.
• Revenue Projections: Next, create revenue projections based on realistic assumptions. Consider factors such as the average sales per location, market size, customer demographics, and industry trends. It’s important to base these projections on solid market research and data to ensure they are credible and achievable.
• Expense Forecasting: Outline your expected ongoing expenses, including rent or mortgage payments, payroll, utilities, supplies, marketing, and franchise royalties. Be sure to account for both fixed and variable costs, and consider any seasonal fluctuations that may impact your expenses.
• Profit and Loss Statement: Develop a profit and loss (P&L) statement that outlines your projected revenue, expenses, and net income over a specific period, typically the first three to five years of operation. This will give potential franchisees and investors a clear view of the franchise’s profitability and financial health.
• Break-Even Analysis: Conduct a break-even analysis to determine the point at which your franchise will start generating a profit. This analysis helps franchisees understand how long it will take to recoup their initial investment and begin seeing returns.
• Cash Flow Projections: Finally, provide cash flow projections to illustrate how cash will move in and out of the business. This is crucial for ensuring that the franchise has enough liquidity to cover its expenses and maintain smooth operations, especially in the early stages.

A well-prepared financial plan demonstrates that your franchise is a sound investment, helping to attract franchisees and investors who are confident in your financial projections and business model.

7. Address Legal and Regulatory Requirements

Navigating the legal and regulatory landscape is a critical aspect of launching and operating a franchise. Ensuring compliance with all relevant laws and regulations not only protects your franchise but also builds trust with potential franchisees. Here’s how to address these requirements in your business plan:

• Franchise Disclosure Document (FDD): The FDD is a legal document that provides prospective franchisees with essential information about your franchise. It includes details about the franchise’s history, the franchisor’s financial health, fees and costs, and the obligations of both parties. Ensure that your FDD is comprehensive, accurate, and complies with all federal and state regulations.
• Franchise Agreement: The franchise agreement is the legally binding contract between you (the franchisor) and your franchisees. It outlines the terms and conditions of the franchise relationship, including the rights and responsibilities of both parties, the duration of the agreement, and the conditions for renewal or termination. It’s important to work with a franchise attorney to draft an agreement that protects your interests while also being fair and transparent to franchisees.
• Intellectual Property Protection: Protecting your intellectual property (IP) is crucial for maintaining the integrity and value of your brand. This includes trademarks, logos, proprietary systems, and any other unique elements of your franchise. Ensure that your IP is registered and that your franchise agreement includes provisions to protect it from unauthorized use.
• Compliance with Industry Regulations: Depending on your industry, there may be specific regulations that your franchise must comply with, such as health and safety standards, environmental regulations, or licensing requirements. Make sure your business plan addresses these regulations and outlines the steps you’ll take to ensure compliance.
• Insurance Requirements: Outline the types of insurance coverage that your franchise will require, such as general liability insurance, property insurance, and workers’ compensation. Adequate insurance coverage is essential for protecting your franchise from potential risks and liabilities.

Addressing legal and regulatory requirements in your business plan not only helps protect your franchise from legal risks but also demonstrates your commitment to operating a compliant and trustworthy business.

8. Develop a Training and Support Program

A strong training and support program is essential for ensuring that your franchisees have the knowledge, skills, and resources they need to succeed. It also helps maintain consistency across all franchise locations, ensuring that customers receive the same high-quality experience no matter where they go. Here’s how to develop an effective training and support program:

• Initial Training: Start by outlining the initial training program that new franchisees will receive. This should cover all aspects of running the franchise, including operations, customer service, marketing, and financial management. Consider offering a combination of classroom training, hands-on experience, and online modules to accommodate different learning styles.
• Ongoing Support: Franchisees need ongoing support to navigate the challenges of running a business. Develop a support system that includes regular check-ins, access to a dedicated support team, and resources such as marketing materials, operational guides, and software tools. Providing ongoing support helps franchisees stay on track and fosters a strong relationship between the franchisor and franchisee.
• Field Support: Consider offering field support, where representatives from your corporate team visit franchise locations to provide hands-on assistance and ensure compliance with brand standards. This not only helps franchisees improve their operations but also reinforces your commitment to their success.
• Peer Support: Encourage franchisees to connect with each other through networking events, online forums, or mentorship programs. Peer support allows franchisees to share experiences, exchange ideas, and learn from each other’s successes and challenges.
• Continued Education: The business environment is constantly evolving, so it’s important to offer continued education opportunities for franchisees. This could include workshops, webinars, or conferences that focus on new industry trends, advanced skills, and innovative strategies.

A comprehensive training and support program not only equips your franchisees for success but also strengthens the overall performance and reputation of your franchise network.

9. Plan for Growth and Expansion

A successful franchise is one that is built to grow. Whether you’re starting with a single location or launching multiple units, it’s important to have a clear plan for growth and expansion. Here’s how to approach it:

• Scalability: Ensure that your business model is scalable, meaning it can be replicated and expanded without compromising quality or performance. This includes having standardized processes, strong brand identity, and efficient operational systems that can support multiple locations.
• Market Penetration Strategy: Develop a strategy for penetrating new markets, whether it’s expanding within your current geographic area or entering entirely new regions. Consider factors such as market demand, competition, and the availability of suitable franchisees.
• Multi-Unit Franchising: Consider offering multi-unit franchising opportunities, where a single franchisee operates multiple locations. This can accelerate your growth while ensuring that each location is managed by an experienced and committed operator.
• International Expansion: If your franchise concept has global appeal, consider the potential for international expansion. Research potential markets, understand the cultural and regulatory differences, and develop a strategy for adapting your franchise to new markets.
• Franchisee Recruitment: A key part of your growth strategy is attracting and recruiting the right franchisees. Develop a profile of your ideal franchisee and tailor your recruitment efforts to target individuals who meet these criteria. Your business plan should outline how you’ll market your franchise opportunities, screen candidates, and onboard new franchisees.

Planning for growth and expansion ensures that your franchise is prepared to capitalize on opportunities and sustain long-term success.

10. Monitor and Evaluate Performance

Once your franchise is up and running, it’s essential to continuously monitor and evaluate its performance. This allows you to identify areas for improvement, make data-driven decisions, and ensure that your franchisees are meeting their goals. Here’s how to implement an effective performance monitoring system:

• Key Performance Indicators (KPIs): Identify the key performance indicators (KPIs) that are most relevant to your franchise’s success. This could include metrics such as sales growth, customer satisfaction, franchisee profitability, and operational efficiency. Regularly track and analyze these KPIs to assess the health of your franchise network.
• Regular Reporting: Establish a system for regular reporting from franchisees. This could include monthly or quarterly financial statements, sales reports, and customer feedback. Regular reporting helps you stay informed about each franchise’s performance and identify trends or issues that need attention.
• Franchisee Feedback: Encourage franchisees to provide feedback on the support and resources they receive from the franchisor. This feedback is invaluable for identifying areas where you can improve your training, support, and overall franchise operations.
• Benchmarking: Compare the performance of different franchise locations to identify best practices and areas for improvement. Benchmarking allows you to set performance standards and help underperforming franchisees improve by learning from the successes of their peers.
• Continuous Improvement: Use the data and insights gathered from performance monitoring to make continuous improvements to your franchise system. This could involve refining your training programs, updating your marketing strategies, or adjusting your operational procedures to enhance efficiency and effectiveness.

Monitoring and evaluating performance ensures that your franchise remains competitive and continues to grow, while also supporting your franchisees in achieving their goals.

Conclusion: Building a Strong Foundation for Franchise Success

Creating a winning franchise business plan is a crucial step in turning your vision into a thriving franchise. By carefully addressing all the key components—from market research and financial planning to legal compliance and growth strategies—you build a solid foundation that will guide your franchise toward long-term success. A well-prepared business plan not only attracts the right franchisees but also provides a strategic roadmap for sustainable growth.

At Franchise Genesis , we specialize in guiding entrepreneurs through the complexities of franchising. Our team of experts is here to support you every step of the way, whether you need assistance in developing your business plan, navigating legal requirements, or expanding your franchise. With over 100 years of combined experience, Franchise Genesis offers the knowledge and resources to help your franchise succeed in a competitive market.

Remember, your business plan is not just a document; it’s a dynamic guide that will evolve as your franchise grows. With the support of Franchise Genesis , you can confidently build a franchise that’s built to last. Let us help you create a winning strategy and turn your franchise dreams into reality.

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Developing a Business Plan for Your Franchise: When and How to Do it

Creating a business plan is a critical step toward the launch of any new business, including a franchise. It’s a step to take earlier in the process than you may think. Will you be seeking financing from a third party? If so, your business plan should be complete before you even ask. And that’s a good thing, because the process of preparing a business plan is very useful. It forces you to anticipate and answer a number of questions about your expectations for the new business. You’ll identify the challenges ahead and be ready to tackle them.

Developing a business plan for a franchise is much easier than for an independent business start-up. You’ll have a good deal of information already at your fingertips or readily available. You can find much of the verbiage you’ll need for the narrative portions of the business plan within the franchisor’s documents. Look to any earnings representations in the franchisor’s disclosure documents to find the financial information you need.

5 Key Sections to Include in Any Business Plan

Each business plan is unique to the particular business it describes. Nonetheless, there are several sections common to any business plan. Franchise business plans will have an additional section outlining the track record, personnel, and support available from the franchise company. You can also include items like the franchise company’s sales brochure or Franchise Disclosure Document (FDD) as attachments to your business plan. This additional section will give lenders (and others you may be trying to impress) a great degree of confidence going forward.

Five key sections contained in a typical business plan, whether for a franchise or independent business, are:

Introduction

This section describes the business in detail. It specifies the product or service involved, the size and characteristics of the market, and the degree of competition present in the market. It also sets forth the operational approach for taking the business to market, as well as any associated challenges and risks.

This section lists key management roles for the new business. It names the people who will fill each role and provides background information about each one. Each bio should emphasize prior experience that’s relevant to the new business. For a franchise business, this section will also include information about the franchisor’s staff who provide support to franchisees.

This section defines the target market: who is your customer and how will you attract them to to the business? It explains advantages your business will offer over competitors and details marketing and advertising plans.

Pro Forma Financial Projections

This section includes projected income statements, cash flow statements, and balance sheets that show the anticipated financial performance of the business. It discloses all material assumptions that are used to prepare the projections. Make sure to prepare these projections on a very  conservative basis. There will always be delays and challenges that you can’t anticipate.

Financing Needs

Be sure to prepare this section even if all funding is coming from your savings. It includes a complete analysis of all start-up costs, including working capital to cover initial marketing plans and operating losses until the projected breakeven point. Even if you are not borrowing, the process of carefully detailing this information will better prepare you for whatever might happen as you get the business up and running.

Don’t be overwhelmed as you consider the information above. Remember, for a franchise business, most of this information will be readily available from the franchisor. Check out the franchise company’s website for information that will help you complete the Introduction and Marketing sections. The franchisor’s FDD will help you with the section on Financing Needs. And, if the franchisor’s FDD includes Item 19 earnings representations , you’ll be on your way to completing the Pro Forma Financial Projections section.

Preparing a Franchise Business Plan: The Early Bird Gets the Worm

Some franchise companies require franchisee candidates to begin work on (or substantially complete) their business plan before they can be approved as a new franchisee. Even if they have no such requirement, it’s a good idea to prepare your business plan relatively early on. The process will help you identify a number of questions that may not have otherwise occurred to you. You’ll then have a chance to contact the franchise company and get answers. Make certain you have a clear understanding of all aspects of the franchise prior to making your final decision.

Finally, remember to update and finalize your business plan after you complete the franchisor’s initial training for new franchisees. You will have a deeper understanding of operations, marketing plans, and many other aspects of the business after you complete the initial training. And many franchisors will supply pro forma financial models that you can use to double-check or even replace the financial projections in your business plan. Take the time to carefully review your entire business plan based on your new knowledge. That way, you’ll be fully prepared to get your new franchise business successfully up and running.

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Creating a business plan for your franchise: what to prepare before asking for money.

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Congratulations! You’ve decided that owning a franchise is the right investment for you. You may have even already decided on the type of franchise, and maybe even the franchise brand you are going to pursue.

What’s next? Financing. Securing the funding needed to make your franchise dreams a reality. And unless you are one of the fortunate people that has enough money saved to cover costs, you will likely be seeking a lender to make up the difference between the amount of money you currently have to invest and amount of money needed to open and maintain your franchised business until you 'break even.' (Breaking even is the point in the lifespan of a business where the operation starts turning a profit.)

To convince lenders that you are worthy of their money, the creation of a business plan is crucial. Lenders use a business plan as a guide to assess whether the prospective franchisee is a on a path towards success and profitability.

To approve loans, lenders want to have a clear, straightforward account of the business to be opened, the principals involved, and—perhaps most importantly—perspective on when the borrowed money will likely be repaid.

It's helpful to prepare for the meeting with the lender like a college graduate student would prepare for a thesis defense presentation. In both instances, it is the goal of the person (or people) going into the meeting to have done the adequate level of research necessary to competently back up the stated claims for the desired result (be it the granting of a master's degree to the student or the gaining of a loan for the prospective franchisee).

Important note: the business plan isn’t just for getting money.

Not only does a business plan help in securing funding, it forces you to take a hard look at the investment you are about to make. It gives you a chance to anticipate the challenges that come with opening a business, and temper unrealistic expectations.

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.

Parts of a Business Plan

Creating a business plan doesn't have to be complicated.

There is no standardized length for a business plan, but no lender wants to read a novel-length presentation. The main thing is that the plan is thorough enough to cover all aspects of your individual franchise. You want to give the lender confidence that you are prepared to take on the managing of a business that will turn a profit in a reasonable amount of time.

The key is compiling the proper information to address the reservations of the lenders you will meet with. This is where opening a franchised business offers a notable advantage over an independent business.

The franchise disclosure document (FDD) provided by the franchisor of the system you are investing in contains a great deal of the information needed to complete a business plan.

This information includes the company’s corporate background, a description of the target market, the competitive advantage of the product/service, marketing initiatives, plus the start-up and ongoing costs. Some franchisors even offer assistance to franchisees in the preparation of the plan.

Common parts of a business plan include the following, according to the Small Business Administration  (a sample business plan is located at the end of this article):

Company description: A good place to look for the information for this section is Item 1 of the FDD. Provide an overview of the franchise and its history to the lender. You will also provide a brief outline of the franchise’s service/product (more detailed information will be given in the next section).

Service/product description: Describe in detail the service and/or product your franchise will provide to customers. This section can be combined with the company description. Again, Item 1 of the FDD is where you will find much of the information you need for this section. Item 16 will also be helpful in discussing what you will and will not be able to sell as a franchisee of a particular franchise system.

Market analysis: 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:

• How big is your market?
• What kind of people (demographically and financially) make up this market?
• Is the market under-served in regards to this service/product?
• If there is competition, who are your competitors and what is your competitive advantage?
• Discuss what experts are forecasting for the service/product in terms of trends and growth possibilities for your specific market (can include demographic, legislative or environmental factors).

Management structure: 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.

Marketing plan: 'How are you going to get customers?' is the main question you’re answering in this section. Use FDD Item 11 to your advantage here. It provides an overview of the franchisor’s advertising and marketing efforts. Also, it provides a description of the training you will complete before opening. Often marketing and sales courses are part of required training.

Financials: This is the meat of your business plan. In this section, don’t only ask for the money you need. 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.

The franchisor can be of significant help to you in completing this section (via Items 5 and 19 of the FDD, and in direct conversation). However, keep in mind the franchisor is restricted legally about making certain claims about projected earnings. Be conservative with the projections as unexpected delays and unforeseen circumstances do happen.

Appendix: The appendix technically isn’t a part of the business plan, but an additional section to present items that would enhance your presentation. Include items you feel would be necessary to giving the lender a complete picture of you and the franchise you are seeking financing for. Examples include: the resumes of management figures, tax returns, media clippings, etc.

As previously mentioned, the best outside source of information to complete your business plan is the franchisor. No other outlet is going to know that franchise system better. 

Additional resources include online sites such as Bplans.com, which offers site visitors a substantial library of sample plans to review, as well as general business websites like the Small Business Administration. Prospective franchisees can also use a professional business plan writer, particularly for the review of a plan before sitting down with the lender.

Confidentiality agreement: Because business plans contain sensitive and confidential information, the content needs to be safeguarded against potential leaks. To do this, you will need to enter into a confidentiality agreement with the parties you allow to review your business plan.

The agreement will bind them not to disclose or reveal any confidential information they receive, without your written permission.

Sample Business Plan Confidentiality Agreement Template

Sample franchise business plan: Please note that the example business plan linked below is a sample of one way to format a business plan. There are several different acceptable formats, and the contents of business plan sections will vary significantly due to factors including the franchise system, the type and amount of loan sought, the franchisee’s background, etc.

Sample Business Plan

Suggested reading:

• The Ultimate Guide to Franchising
• What is Franchising?
• The Benefits of Franchising
• Choosing the Most Profitable Franchise for You
• 11 Key Steps in Opening a Franchise
• Franchises vs. Business Opportunities
• The Cost to Start a Franchise and Financing Options
• Basics of the Franchise Disclosure Document (FDD)
• Creating a Business Plan for Your Franchise
• Completing and Signing a Franchise Agreement

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Creating a business plan for your franchise

If it seems like new Starbucks locations are popping up faster than weeds in your backyard, there’s a sound reason behind it. Successful franchises rapidly expand their reach because they begin with an effective business plan and focus on growth.

Related: Franchise development—what you need to know

Creating a business plan is the necessary first step for any business owners who want to bring a franchise into a new market. Well-crafted franchise business plans are the equivalent of an elevator pitch. Business owners can use them to convince others to invest the capital they need to hit the ground running. Lenders also require a business plan before they will sign off on any loans to a prospective franchise owner.

Creating your franchise business plan

A typical business plan includes four main sections. You can touch on these sections in an executive summary, then break down the details in each individual section. Each section functions like a signpost on the roadmap you’re drawing for your new business to reach its goals. Here’s an overview of those four sections and what they should include.

Business description

The purpose for this section is basically self-explanatory. It offers basic and essential information on the franchise itself. For example, it describes the products and services your business offers. You can also identify your customers and how your business will help them.

You should evaluate the market where you wish to set up shop and include information about it in this section. This includes an analysis of your direct competitors, identifiable challenges or risks that come with doing business in that market, and a breakdown of your target demographic. Discuss how you will approach and manage each of these factors within your business operations.

Your business plan needs to detail your company’s management structure and any related core values or philosophies. Which positions will be responsible for managing day-to-day operations? Who will fill these positions? What qualifications and skills are required for each position? How will you hire and train the necessary personnel? What salaries and benefits will you offer to these employees?

Discuss the individuals who will be filling management and leadership roles on your team. Explain—in depth—what makes those particular individuals qualified to succeed in those roles. Franchising is only as successful as the management team doing the work behind the scenes, and the people reading your business plan will look over this section carefully.

A new business can only succeed if it uses the right formula to reach potential customers and turn them into real customers. This is where your marketing plan comes into play. Your business plan should detail how you will reach customers and convince them to walk through your door.

Doing thorough market analysis is critical in this part of your overall planning. You need to identify your customers, assess their needs, and determine how your business will fulfill those needs. How will this data shape your pricing? What is your potential market share? Outline how you will market your business to reach that target demographic.

Financial projections

It takes a significant investment of capital to get any business off the ground, and franchises are no exception. Investors and lenders will be most concerned about turning a profit. They don’t want to sink funding into a business that will end up folding like a paper airplane at the first sign of trouble.

Your plan should outline a realistic budget that includes both startup costs and operating costs. These financial projections should cover your cash-on-hand, franchise purchasing fees, startup costs and operational costs. The budget should cover operational costs over a three- to six-month period.

Discuss how much capital you’ll need to cover these costs until your business turns a profit. You also need to demonstrate the accounting and inventory control systems your franchise will use. Include income statements, cash flow projections, and data sheets to project how your business will do once it opens its doors. Financial projections should be conservative and take into account as many variables as possible.

Getting to work

There are many great resources available to help you structure your business plan so that it conveys the message you intend with confidence. Franchise business plan templates can help you see what works best and how to put your vision into the right words. You can pick from assorted stock images, fonts, colors and other design elements to make it visually appealing and reflect your franchise’s brand voice.

If you’re not a professional designer,  Lucidpress  can help you start out on the right foot. We offer plenty of templates suited to meet your business document needs. Our intuitive online editor makes it easy to design traditional printed documents or embrace the virtual realm with interactive digital documents. Check out our  template gallery  for a dose of inspiration, then sign up for a free Lucidpress account to take one for a test drive.

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How to Start a Franchise

Starting a franchise can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful franchise.

Importantly, a critical step in starting a franchise is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Franchise :

• Choose the Name for Your Franchise
• Develop Your Franchise Business Plan
• Choose the Legal Structure for Your Franchise
• Secure Startup Funding for Your Franchise (If Needed)
• Secure a Location for Your Business
• Register Your Franchise with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Franchise
• Buy or Lease the Right Franchise Equipment
• Develop Your Franchise Marketing Materials
• Purchase and Setup the Software Needed to Run Your Franchise
• Open for Business

1. Choose the Name for Your Franchise

The first step to starting a franchise is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your franchise:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your franchise.

2. Develop Your Franchise Business Plan

One of the most important steps in starting a franchise is to develop your franchise business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

To enhance your planning process, incorporating insights from a  sample franchise business plan  can be beneficial. This can provide you with a clearer perspective on industry standards and effective strategies, helping to solidify your own business approach.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your franchise.
• Company Overview – this section tells the reader about the history of your franchise and what type of franchise you operate. For example, are you a business format, a product, or a marketing franchise?
• Industry Analysis – here you will document key information about the franchise industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your franchise? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your franchise make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

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3. choose the legal structure for your franchise.

Next you need to choose a legal structure for your franchise and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the franchise and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a franchise together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a franchise include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a franchise is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your franchise, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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4. Secure Startup Funding for Your Franchise (If Needed)

In developing your franchise business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a franchise to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a franchise that they believe has high potential for growth.

5. Secure a Location for Your Business

When looking for a franchise location, there are a few things you’ll want to keep in mind. First, you’ll want to find a location that is accessible and visible to your target market. You’ll also want to make sure the area is affordable and has the necessary zoning and permits. Finally, you’ll want to make sure the location is suitable for your business model.

6. Register Your Franchise with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your franchise’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your own business to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

To start a franchise, you’ll need a business license and a permit from the state or local government. You may also need a trademark or copyright license. Contact your local government or business licensing agency to learn more.

10. Get Business Insurance for Your Franchise

The type of insurance you need to operate a franchise will vary depending on the state as well as the scope of your operation. 

Some business insurance policies you should consider for your franchise include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

11. Buy or Lease the Right Franchise Equipment

The equipment you need to run your franchise will depend on the type of business. For example, if you have a fast food franchise, you will need a kitchen with cooking equipment. If you have an administrative franchise, you will need office equipment such as a computer and printer.

It is important to consult with your franchise broker to determine the specific equipment you will need to run your franchise. Your franchise agreement should include this information. In addition, your franchisor may provide a starter kit with some or all of the essential equipment you need.

12. Develop Your Franchise Marketing Materials

Marketing materials will be required to attract and retain customers to your franchise.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your franchise. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional franchise website provides prospective franchisees with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your franchise.

13. Purchase and Setup the Software Needed to Run Your Franchise

The software you need to run a franchise depends on the type of business. For example, you will need software to manage your inventory and sales for a fast food franchise. If you are starting a service franchise, you will need software to help manage your customer relationships and appointments. No matter the type of franchise, you will need accounting software to manage your finances. You may also want to invest in some software that can help you with marketing and website design. 

14. Open for Business

You are now ready to open your franchise. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

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How to Start a Franchise FAQs

Is it hard to start a franchise.

The answer to this question depends on a number of factors, including the type of franchise agreement you are interested in and the amount of money you are willing to invest. Some franchise businesses are easier to start than others, so it is important to do some research before making any decisions. 

However, if you follow the steps above, you should be able to start your franchise without too much difficulty.

How can I start a franchise with no experience?

There are a few things you can do to start a franchise with no experience. You can research the industry and learn about the different types of franchises available. You can also attend franchise expos and meet with franchisors, franchise brokers, and franchise consultants to learn more about their businesses. You can join a franchise network or support group to get advice and tips from experienced franchisees. You can also consult with a franchise attorney to help you understand the legal requirements of owning a franchise.

If you're still not sure if owning a franchise is right for you, consider attending a free seminar offered by the International Franchise Association . IFA seminars provide an overview of the franchising process and include a panel of experts who can answer your questions. 

What type of franchise is most profitable?

There is no one-size-fits-all answer to this question, as the most profitable type of franchise will vary depending on the industry and market conditions. However, some of the most profitable types of franchise opportunitie s include food franchises, retail franchises, and service franchises.

How much does it cost to start a franchise?

It can cost anywhere from $10,000 to $100,000 to start a franchise system . The amount you'll need to invest depends on the type of franchise, the size of the territory, and the level of support and training provided by the franchisor.

The startup cost typically includes the initial franchise fee, training costs, marketing expenses, and the cost of setting up your business operations. Additional expenses may include leasehold improvements, equipment purchases, inventory, and signage.

What are the ongoing expenses for a franchise?

The ongoing expenses for a franchise can include things like royalties, marketing fees, and national advertising. It's important to factor these costs into your budget when you're considering purchasing a franchise. You'll also need to budget for things like the cost of goods, labor, and rent or property taxes. Talk to the franchisor about their typical expenses so you have a realistic idea of what you'll be paying each month.

How does a franchise make money?

A franchise owner can make money in two ways: by selling products or services to customers, or by collecting franchise fees from other businesses that use the franchisor's trademarks and methods. Franchises can also make money by leasing property to the business. In this case, the franchisor will usually receive a monthly payment, and the business will be responsible for all of the property's expenses.

Is owning a franchise profitable?

There are a number of reasons a franchise opportunity can be profitable. Franchise companie s have a proven business concept that has been tested over time. Franchisors usually offer support and training that can help new franchisees become profitable. Additionally, a well-run franchise can provide a steady stream of income from franchise sales .

Why do franchises fail?

There are many reasons franchise owner s can fail. Some of the most common reasons include a lack of proper planning and research, a failure to understand the target market, financial mismanagement, and incompetent or unethical leadership. When these or other factors lead to a decline in sales, the franchise can be forced to close its doors.

Where Can I Download a Franchise Business Plan PDF?

You can download our franchise business plan PDF template here. This is a business plan template you can use in PDF format.

Other Helpful Business Plan Articles & Templates

How to Create a Franchise Business Plan

A business plan is a document that outlines the goals, strategies, and operational plans of a business. In short, it is a roadmap to success . Not only is it an essential tool for an aspiring business owner to get started, but it serves as a benchmark for measuring progress and making adjustments as needed down the road.  

If you are planning to purchase a franchise, creating a thorough and effective business plan is essential to your success. Not only will it help you prepare for what lies ahead, but it is also a requirement if you are looking to secure financing. In fact, a well-written business plan can make the difference in whether a lending company approves your loan.    

Information You Need to Write a Compelling Business Plan  

A business plan is not something you can just jot down in a few minutes. Rather, you will need to spend intentional time compiling information and developing a strategy that will form the blueprint of your business. 

Here are several items you should consider including in your franchise business plan: 

• Relevant work experience
• Insights from existing franchisees 
• Statistics within the industry 
• Current industry news 
• Updated data related to local economy 
• Local marketing tactics  
• Franchise Disclosure Document (FDD) 
• Additional franchisor literature 
• Necessary permits and licenses 
• Market area map that includes all current and potential competitors

What Should Be Included in a Franchise Business Plan?  

Clearly, forming a business plan requires a diligent effort. However, if you are looking to own a franchise business, you won’t need to start from scratch since the franchisor has already compiled much of the information you will need. While you still need to work hard to put together a solid business plan, there are several templates available for guidance. No matter which template you choose, your business plan should include the following sections: 

Executive Summary 

This section will provide a mission statement for the business and then explain how your business will achieve its goals . Someone should be able to read the executive summary and know the purpose of your business and the potential it has in its given market. 

Business Description

The information provided here should be thorough. Fortunately, Item 1 in the Franchise Disclosure Document (FDD) will give an overview and history of the franchise you are seeking to buy . Furthermore, you should include details related to products and services, market and competition, business operations, and the potential challenges your business might face. 

Operations & Management Summary

This section will explain how things will get done in the business . It should outline the structure of the management team and include specific instructions related to the day-to-day operations of the business. Team members should be able to refer to the operations part of the business plan as they aim to implement the business’s strategies. 

Market & Industry Analysis

You will need to provide an analysis on the market that you are entering, which includes: 

• A description of the marketplace
• What your competitors are doing
• Details that support your specific business strategy

Furthermore, you should also understand the industry along with its risks and opportunities, so that you can build strategies that take advantage of the opportunities while mitigating potential risks.

Competitive Analysis

You shouldn’t start a franchise business with your blinders on. It’s important to know what your competitors are doing and how they are performing . Evaluating your competitors is a way to validate the predictions you have for your business’s performance . By this point, you have probably already gathered all the information you need about your competitors. Ensure that you perform a thorough analysis of this information as it will guide you in your business decisions.  

Marketing & Sales Plan

What you include here is dependent on which franchisor you work with since you are obligated to use their sales and marketing tactics. You will want to know the process for targeting new customers and how much flexibility you have to implement your own marketing strategies . You should also provide specific information related to the initial marketing plan and what the ongoing marketing strategy will look like. Finally, it’s important to explain how the franchisor will support you in these efforts .

Financial Plan

This section should thoroughly outline the financial details of your business: where it has been, where it currently is, and where it’s going . The data will include: 

• Business costs 
• Current funding for the business 
• Expected future financial needs  

While the actual financial performance of each franchise unit will vary, the Franchise Disclosure Document (FDD) provides information that is helpful for making financial projections. 

• Item 19 includes the financial performance representations (FPR) for a prospective franchisee 
• Items 5-7 have helpful financial information related to the initial fees and investment needed

Speaking with existing franchisees is also an integral part of this process. 

Pro forma is another part of the financial section, and it includes projections of future expenses and revenues , which you can corroborate with the following business information:  

• Balance sheet
• Profit or loss statement 

Perhaps it goes without saying, but be sure to update your business plan if something changes. It is not a document you should finish and then put away to gather dust. It is a valuable resource, and you should use it at every stage in your business if you want to be successful.  

Ready to Get Started With Your Franchise Business Plan?  

Creating a thoughtful and detailed business plan is key to each step of the franchising process. If you are ready to get started with owning a franchise business, then FranNet is here to help. Our franchise consultants will provide the resources, support, and guidance you need to make an informed buying decision. Schedule a free consultation today! 

Mar 17, 2023

Business Ownership , Buying a Franchise , Finance

How To Write A Business Plan (2024 Guide)

Updated: Apr 17, 2024, 11:59am

Table of Contents

Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.

Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.

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Drafting the Summary

An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.

Ask for Help

When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.

After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business. 

The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.

Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.

Numbers-based Goals

Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.

Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.

Intangible Goals

Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.

The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.

If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.

This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.

You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.

Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.

Business Operations Costs

Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.

Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.

Other Costs

Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.

Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.

How do I write a simple business plan?

When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.

What are some common mistakes in a business plan?

The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.

What basic items should be included in a business plan?

When writing out a business plan, you want to make sure that you cover everything related to your concept for the business,  an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.

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Julia is a writer in New York and started covering tech and business during the pandemic. She also covers books and the publishing industry.

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Building Your Franchise Business Plan: Key Elements to Include

March 1, 2024

Starting a franchise business is an exciting venture, but it requires careful planning and a solid business plan. Your franchise business plan is a roadmap that outlines your goals, strategies, and financial projections. Here are key elements to include when building your franchise business plan:

Executive Summary

Begin with a concise executive summary that provides an overview of your franchise concept, its unique value proposition, and your goals. This section should capture the essence of your business plan and grab the reader’s attention.

Franchise Description

Provide detailed information about your franchise, including its history, mission, and vision. Explain what makes your franchise unique and why it’s a valuable opportunity for potential franchisees.

Market Analysis

Conduct a thorough market analysis to demonstrate your understanding of the industry, target audience, and competition. Include market trends, customer demographics, and potential growth opportunities.

Franchise Model and Operations

Outline your franchise model, including the franchise fee, royalty structure, and any additional fees. Describe the day-to-day operations of franchisees, including training, support, and marketing assistance.

Marketing and Sales Strategy

Detail your marketing and sales strategies to attract and retain franchisees. Include plans for lead generation, advertising, and brand building. Explain how you will support franchisees in their local marketing efforts.

Financial Projections

Present financial projections that cover at least three to five years. Include income statements, cash flow forecasts, and balance sheets. Provide a breakdown of start-up costs and expected revenue streams.

Franchisee Qualifications

Define the ideal franchisee profile, including the qualifications, skills, and characteristics you’re looking for. Explain your franchisee selection process and how you will support franchisees in their business endeavors.

Legal and Regulatory Compliance

Address the legal aspects of your franchise, including compliance with franchising laws and regulations. Highlight any licenses or permits required.

Risk Analysis

Identify potential risks and challenges your franchise may face and outline strategies for mitigating them. This shows that you’ve considered the possible obstacles and have plans in place to address them.

Include any supporting documents, such as resumes of key team members, franchise agreements, marketing materials, or market research data, in the appendices.

A well-structured franchise business plan is essential for attracting investors and franchisees, as well as guiding your franchise’s growth and success. Tailor your plan to your specific concept and industry, and regularly revisit and update it as your business evolves.

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How to Write a Business Plan for Your Franchise

• September 2, 2022
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Katie Fleming

Co-founder and COO of Owner Actions

• Disclosure: Owner Actions may be compensated for sales made through this article. Learn more.

When you apply for an SBA loan , a term loan , or another form of financing, you may need to present the lender with a business plan for your franchise. This plan will describe your business’s purpose and potential and explain how the capital you’re seeking can help it attain its goals.

Why is a business plan for a franchise important to lenders?

Lenders want to see that you have a viable idea and a sustainable plan worth funding. They also want to evaluate whether you have the means to bring your business plan for your franchise to fruition.

When compiled correctly, your business plan will help lenders learn about your business’s financial capacity, the competitive challenges it’s up against, the members of your team who can help you realize your vision, and other important details that can contribute to its success. These elements will help them make assessments about the business’s strength and the likelihood you’ll be able to repay any capital they provide.

What should my plan include?

Your plan should include the following elements:

How can I make my plan look professional?

Here are some tips:

• Use a professional font, like Times New Roman or Calibri, that’s easy to read on- and off-screen.
• Use a bold, slightly larger font for headings and subheadings that’ll help lenders find content quickly and easily as they review your document.
• Create easy-to-read charts that’ll help the lender understand your projections and forecasts.
• Use chart and text colors that are pleasing on- and off-screen.
• Embed color graphics of the facility, team, product, and parts of your processes into the appropriate sections of your plan.
• Ensure that your business’s name and contact information are included on every page of the document. You can insert this information into the document’s header and set it to appear on every page except the cover sheet .
• Run a spelling and grammar check on the document.
• Update the table of contents after finalizing every other change.

Before you submit the plan, you should print a hard copy and review it for typos and formatting issues. Once the document is ready, you can print it to a PDF file and submit it to your lender.

Can you help me write my business plan?

Yes! With our newest service, we can structure, draft, and polish your business plan. You can learn more about this done-for-you service here .

Looking for a DIY option? Try a service like LivePlan , which can help you pitch, plan, and track the success of your business plan. Many owners use this service to browse more than 500 sample plans, organize their ideas, build robust financial projections, and access professional guidance through the planning process.

Want a pro to look it over when you’re finished? We’re happy to consult and provide the expert feedback you need. Check out how we can help here .

Projectionhub is another great service that can help you take on the projection piece of your plan. This service offers 50+ industry-specific templates expertly prepared by a CPA for as little as $49. For a limited time, you can save up to 15% on this service with the code OWNERACTIONS (some restrictions apply; contact Projectionhub for details).

What’s next?

Securing financing is a major milestone in the acquisition process. After you write your business plan for a franchise, you’ll work through other tasks that’ll help you prepare for operations. Log into your owner’s portal for articles, checklists, and advice on finding a location, hiring your employees, preparing for opening day, and more.

Want to take on other tasks?

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How to Build Effective Collaborative Business Relationships — Your Step-by-Step Guide Use this structured framework to form successful partnerships, manage risks and create lasting value for all stakeholders involved.

By Majeed Javdani Edited by Chelsea Brown Oct 9, 2024

Key Takeaways

• In today's interconnected business world, collaboration is key to unlocking new opportunities and driving sustainable growth.
• ISO 44001 offers a structured framework for building effective collaborative business relationships, ensuring that all parties benefit from shared goals, resources and risk management.
• This article provides a simplified explanation of how to form successful partnerships in accordance with the ISO 44001 standard.

Opinions expressed by Entrepreneur contributors are their own.

What is quality management? I have a simple, straightforward answer to this question. Quality management means meeting the requirements of all parties who have an interest in your business — stakeholders who have invested in your business, your customers, business partners and regulators.

ISO standards are the result of best practices that ISO member states bring together in one place to help others learn from their experience and avoid reinventing the wheel. It's not dedicated to quality management in the manufacturing sector, as many assume. ISO's role is managing knowledge through the flow of best practices already undertaken by its member states. These best practices are available in all sectors, including what I am going to discuss in this article: collaborative business relationships, or ISO 44001 .

Related: How to Harness the Strategic Power of Collaboration in Your Business

What is ISO 44001?

ISO 44001 is based on best practices that serve as a baseline for forming collaborative business relationships , whether you are an entrepreneur, an SME or a public sector and governmental agency. However, as I said, you need to see it as a baseline, and there is no doubt it should be tailored to the context of your business.

ISO 44001 is a management system. The word "system" needs to be emphasized here. What is a management system or a systematic approach in management? I have another simple, straightforward answer: A systematic approach in management means operating according to predefined processes. In other words, when you have a system implemented in your business, it doesn't matter who, what or when — everyone must follow the predefined processes at all times. You may ask, "What about specific situations?" Even in specific situations, people will follow the predefined processes designed for those particular scenarios.

The result of implementing the ISO 44001 requirements standards is a series of processes that need to be followed in forming a collaborative relationship, such as a joint venture — from determining which operations are better done jointly with other businesses to a controlled exit from the partnership.

How to initiate a collaborative business relationship

Now, I want to provide insight into initiating collaborative business relationships in accordance with the ISO 44001 requirements standard, but in a completely simplified manner. Of course, fully understanding the standard would require several books, let alone an article.

Determine and define value-added opportunities

In the first step, you need to determine and define value-added opportunities that can be achieved through collaborative working . Collaborative working means determining capacities and capabilities that can complement each other. Sometimes, you have capacities that need to be enabled by a collaborative partner who can utilize their capabilities by leveraging your capacities. In another scenario, you may have capabilities that require additional capacities beyond your own to be fully utilized. When you determine your unused capacity or capabilities, you will be able to define the scope of work that may add value if executed in a collaborative relationship. This defines the boundaries of your collaborative work.

Why do you need to determine boundaries for the work that will be done collaboratively? The point is that you enter into collaborative work when you have a goal that is beyond your own capacities and capabilities. It is critical to first utilize your own capabilities based on your own capacities to maintain your sustainability. Then, if you find unused capacities or capabilities that need to be complemented by others to create value, you can determine the scope of collaborative work outside of your own sustained operations. Be careful that collaborative work does not interfere with your sustained operations. Your sustained operations must not be impacted by the possible failure of your collaborative efforts.

Related: Most Business Partnerships Fail — 5 Hacks to Make Sure Yours Stays Intact

Define your objectives and how you plan to achieve them

Next, what are the objectives of the determined work that could be executed in a collaborative relationship, and what is your plan to achieve them? You are focusing on a specific product (goods or services) that is beyond your current capabilities or capacities and requires complementary relationships to realize. The objective of your collaborative work is this product. You need to plan for a business that delivers your determined product as its result. This plan demonstrates all the requirements of the business and clearly shows your contribution and commitment based on your unused capacities or capabilities. It also outlines what needs to be contributed by others through a collaborative business relationship to complement yours and create value.

When it becomes clear what you want to achieve and what capacities or capabilities you have that will enable your business case, you will then be able to identify the criteria your collaborative partner needs to meet to complement you.

Prepare for negotiation

Then, you will enter into negotiations with potential collaborative partners who match your determined criteria. The business leaders you are negotiating with need to have the same level of understanding as you about what will happen. You've been driven by your own ideas to enter into a new business venture because your ideas reflect your decision-making drivers. Being well-prepared for negotiation means understanding the decision-making drivers of your potential partners.

A good relationship is one that creates value for all interested parties based on what "value" means to them. So, do enough homework to understand what "value" means for your potential partners.

Define the ownership of risk

While determining what each party will contribute and take away from the relationship, you need to clearly define the ownership of risk. Risk should be distributed among collaborative partners based on their responsibilities, which are mapped to the capacities or capabilities they contribute to the relationship.

Related: A Successful Partnership Hinges on Careful Planning and Execution. Here Are 7 Things You Need to Ensure Partnership Success.

Exit strategy

Finally, you need a clear exit strategy for the disengagement phase. Collaborative relationships should have a predetermined termination time based on the objectives that the collaborative work will achieve. More importantly, there should be a predetermined series of exit triggers in case of an unsuccessful working experience or unfulfilled expectations of the collaborative parties. In any case, whether termination is due to successful completion or failure, all parties need to know clearly who owns what. Everything, from tangible or intangible assets to debts, should have a predetermined owner based on the business case and risk ownership in place.

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Millennial male voters are a prime prize for Harris and Trump. Her campaign's got a plan — get Tim Walz on Twitch.

• Harris and Trump are working hard to court the young male vote.
• On Wednesday, Harris' running mate, Tim Walz, appeared on a "World of Warcraft" Twitch stream.
• Nearly half of the eligible voters for this election are Gen Z and millennial voters, per Statista.

Vice President Kamala Harris is sending her running mate, Gov. Tim Walz of Minnesota, to shore up a critical segment of voters for the coming election — young men.

On Wednesday evening, Walz was featured on a " World of Warcraft " Twitch stream. The multiplayer online role-playing game by Blizzard was released in 2004 and is still hugely popular.

The livestream, which ran for an hour and a half, included a live feed of Walz's rally in Arizona beside Twitch creator Preheat's gaming feed.

"GOP is the opposite of POG, and we here to POG out," said Preheat, who has over 51,000 Twitch followers and was the host of Wednesday's stream. "POG" is internet slang for a clutch play and a word often used by gamers in iterations like "POGChamp" and "poggers."

A spokesperson for the Harris campaign told Wired that Wednesday's livestream was part of their outreach to young male voters, who form a large part of Twitch's user base.

Twitch , which is owned by Amazon, is best known as a platform where people stream themselves playing games. The livestreaming service, citing internal data, said that it has 105 million average monthly visitors and that 70% of its viewers are between 18 and 34 years old.

This isn't the first time the Harris campaign has attempted to reach out to this demographic.

Besides Twitch, Harris' campaign has run ads on the gaming site IGN and during major sporting events like NFL games. "Geeks & Nerds for Harris," a pro-Harris organization, also held a stream in September to rally support for her.

Jonathan Aronson, a communications professor at the USC Annenberg School for Communication and Journalism, told Business Insider that Walz's appearance on Twitch was an example of the Harris campaign "seeking alternative paths to get to younger voters."

"It's a chess game. Both sides have huge amounts of money to spend. Each side will spend it to try to motivate their supporters to vote, and for the small number of undecided voters to vote," Aronson said.

Related stories

Representatives for the Harris campaign didn't immediately respond to a request for comment from Business Insider sent outside regular business hours.

Walz's appearance on Twitch comes as the Harris campaign ramps up its voter outreach . Early voting has already started in several states while Election Day is less than a month away.

Harris, for her part, embarked on a media blitz this week.

She appeared on Alex Cooper's "Call Her Daddy" podcast and sat down for interviews with CBS's "60 Minutes," the late-night host Stephen Colbert, and the radio host Howard Stern.

For Harris, courting the youth vote could be critical to winning the November election. Data on Statista suggests Gen Zers and millennials will make up around 48.5% of eligible voters for the upcoming 2024 presidential election.

Former President Donald Trump has also been working hard to shore up the young male vote.

In recent months, Trump has been busy hitting the podcast circuit, doing interviews with Logan Paul, Theo Von, Adin Ross , and Lex Fridman .

In his interview with Fridman, which aired last month, Trump said podcast interviews offered him greater visibility and reach to voters.

"You have a great podcast. It's very well-watched. And I'm sitting here, and I do this, a lot of people see it. And I do other things, and a lot of people see that," Trump told Fridman.

"And I go traditional also, you know, you have traditional television, which is getting a little bit older and maybe less significant, could be less significant, I don't know. But it's changing a lot," Trump added.

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