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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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:
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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.
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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.
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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.
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Management team:
Name all the key members of your management team with their duties, responsibilities, and qualifications.
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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.
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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:
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About the business:
Provide all the basic information about your business in this section like:
- The name and type of your franchise business: mention details about your franchise brand, type, and consumers you serve. Following are the types of franchise businesses.
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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.
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Management franchise
: Franchisee owners manage the day-to-day operations of management franchises. Franchisees operate independently from the franchisor.
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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.
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- 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.
- The name and type of your franchise business: mention details about your franchise brand, type, and consumers you serve. Following are the types of franchise businesses.
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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?
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Mission statement:
Include a mission statement that aligns with the franchisor’s statement while highlighting your values and goals.
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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.
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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:
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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.
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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.
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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.
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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.
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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:
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List the services:
- 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.
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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:
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Develop your unique selling proposition (USP):
Clearly define your unique selling propositions; which can be competitive pricing, extraordinary ambiance, brand recognition, etc.
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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.
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Sales strategies:
Mention your sales strategy as in – offering discounts, utilizing online delivery, planning royalty programs, partnering with local businesses, etc.
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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:
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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.
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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.
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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.
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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.
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Organizational structure:
Describe the organizational structure of the management team, including reporting lines and how decisions will be made.
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Compensation plan:
Describe your compensation plan for the management team and staff, including salaries, bonuses, and other benefits.
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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.
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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.
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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.
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Balance sheet:
Prepare a projected balance sheet, which shows the business’s assets, liabilities, and equity.
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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.
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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.
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Summary
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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