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<\/figure>\n\n\n\n1. Executive\/Brand Summary<\/h3>\n\n\n\n
The executive summary of your franchise business plan should succinctly summarize the franchise, industry, and other topics that will be expanded on in other sections of the plan. Essentially, it outlines what the rest of the business plan will cover in brief.<\/p>\n\n\n\n
The executive summary should highlight some basic information about the business and your goals, your plans to achieve the goals, and some financial and market forecasts.<\/p>\n\n\n\n
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- Summary<\/strong>: This should be a summary of the franchise business, giving a bit of insight into the franchise, what the business offers, and the basic goals.<\/li>\n\n\n\n
- Franchisee background<\/strong>: In this section, you\u2019ll briefly describe your background, describing other business ventures and industry experience.<\/li>\n\n\n\n
- Opportunity<\/strong>: Explain the opportunity the franchise provides. Why is this business venture a good idea? What will make it successful?<\/li>\n\n\n\n
- Objectives<\/strong>: Simply list out some of your primary short-term and long-term goals.<\/li>\n\n\n\n
- Mission statement<\/strong>: A brief declaration of your purpose, values, and goals. This should align with the franchisor\u2019s overarching mission.<\/li>\n\n\n\n
- Market and financial highlights<\/strong>: Spotlight a few key market and financial points, such as initial investment, profit predictions, and a basic consumer analysis. No need to go too in-depth here, as you\u2019ll go into this in much more detail below.<\/li>\n<\/ul>\n\n\n\n
2. Company Overview<\/h3>\n\n\n\n
As a franchisee<\/a>, you are buying into an existing brand brought to fruition by the franchisor. So, it\u2019s smart to include some background information about the parent company in your business plan. This section is relatively easy to write, as you can generally draw directly from \u201citem one\u201d of the franchise disclosure document (FDD)<\/a>. <\/p>\n\n\n\n
Here are some things you should include in the company overview:<\/p>\n\n\n\n
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- Basic franchise information<\/strong>: This includes the company\u2019s legal name, address, owners, and related entities. <\/li>\n\n\n\n
- Company background<\/strong>: History of the franchise, when it began franchising, how many franchises are currently operating.<\/li>\n\n\n\n
- Structure of the franchise<\/strong>: Define the type of franchise (business format, distribution, investment, etc.) and the type of franchise agreement (single-unit, multi-unit, master)<\/li>\n<\/ul>\n\n\n\n
3. Products and Services<\/h3>\n\n\n\n
When crafting a franchise business plan, you\u2019ll want to clearly outline all of the products and services your franchise will offer. This section should also include your strategies for maintaining the parent company\u2019s quality or location-specific products you will offer. You may also want to include your pricing structure for all of your products and services.<\/p>\n\n\n\n
Franchisors often want to see in your business plan that you are prepared to follow their strict quality-control guidelines.<\/p>\n\n\n\n
For example, if you are drafting a franchise business plan for a fast food franchise, you may write:<\/p>\n\n\n\n
\u201cThe franchise will offer the complete menu provided by the parent company, including burgers, fries, chicken sandwiches, and desserts. Additionally, we plan to introduce breakfast tacos as a location-specific offer as they cater to consumers in the region, pending approval from the franchisor. All menu items will follow the franchisor\u2019s quality standards, with monthly audits conducted to ensure compliance. We will price items according to the corporate pricing structure, with slight adjustments for the local market conditions.\u201d<\/em><\/p>\n\n\n\n
4. Industry Analysis<\/h3>\n\n\n\n
Another important section to include in your franchise business plan is an analysis that covers the franchise industry in detail. This should examine the industry’s market growth, the franchise’s market share, and other important data or trends.<\/p>\n\n\n\n
Here are some important points to hit in your franchise industry analysis:<\/p>\n\n\n\n
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- What is the overall market size of the industry?<\/li>\n\n\n\n
- How much has the industry grown or shrunk in the past 5 or 10 years?<\/li>\n\n\n\n
- How much is the industry expected to grow or shrink in the next 5 or 10 years?<\/li>\n\n\n\n
- What is the ceiling for growth in the industry?<\/li>\n<\/ul>\n\n\n\n
5. Competitive Analysis<\/h3>\n\n\n\n
Your business plan should also include details about the franchise\u2019s competitors. Here, you want to explain what these competitors do well, what their weak points are, and how your business will outperform them.<\/p>\n\n\n\n
Franchise businesses have two types of competitors:<\/p>\n\n\n\n
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- Direct competitors<\/strong>: Businesses offering the same or nearly identical products or services to the same customer base as your franchise.<\/li>\n\n\n\n
- Indirect competitors<\/strong>: Companies providing different products or services that solve the same problem for the target audience and may act as an alternative option.<\/li>\n<\/ul>\n\n\n\n
There are four key steps you should take when writing a competitive analysis for your franchise business plan:<\/p>\n\n\n\n
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- Identify<\/strong>: Who are the direct and indirect competitors in your area? <\/li>\n\n\n\n
- Research<\/strong>: Gather information on your competitors’ websites, social media profiles, marketing strategies, products they offer, pricing, and estimated sales.<\/li>\n\n\n\n
- Scrutinize<\/strong>: Break down some of the positives and negatives of your competitors. What are they doing well, and what are they missing?<\/li>\n\n\n\n
- Strategize<\/strong>: Create an in-depth strategy for what you will do differently and describe how your franchise will outshine the competition.<\/li>\n<\/ol>\n\n\n\n
6. Customer Analysis<\/h3>\n\n\n\n
To become a successful franchisee, you must understand your customer base. The customer analysis section of your business plan gives you the opportunity to gain insight into your franchise\u2019s main audience. In this section, you\u2019ll gather data on your target audience and explain their buying habits.<\/p>\n\n\n\n
Here are some important questions to answer in your franchise business plan\u2019s customer analysis:<\/p>\n\n\n\n
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- Demographics in your area<\/strong>: <\/strong>Describe the age, gender, income level, and education level of the people in your territory (something you’ll uncover in a franchise territory analysis<\/a>).<\/li>\n\n\n\n
- Target audience<\/strong>: <\/strong>For example, if you plan to open a Sports Clips, you\u2019ll target men, while Plato\u2019s Closet may primarily market to women.<\/li>\n\n\n\n
- Your audience’s purchasing patterns<\/strong>: Insights into how often, when, and why your customers make buying decisions within your market.<\/li>\n\n\n\n
- Customer lifestyle and behavior<\/strong>: <\/strong>Habits, interests, and daily routines that influence how and where your audience spends their time and money.<\/li>\n<\/ul>\n\n\n\n
7. Regulatory Landscape<\/h3>\n\n\n\n
One unavoidable hurdle for entrepreneurs of all shapes and sizes is regulations. For new franchisees, it\u2019s important to have a broad understanding of the regulations your new franchise will face and what you need to do to stay compliant.<\/p>\n\n\n\n
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- Type of regulations<\/strong>: What federal, state, and local laws are relevant to your business? Depending on your industry, this may include health and safety codes, labor laws, or zoning restrictions.<\/li>\n\n\n\n
- Permits and licenses<\/strong>: Break down the specific permits required to operate your franchise, such as business licenses, health permits, or signage approvals.<\/li>\n\n\n\n
- Cost of compliance<\/strong>: Include an estimate of the total cost of your franchise to adhere to regulatory standards.<\/li>\n\n\n\n
- Ongoing compliance strategy<\/strong>: Explain how you will stay up-to-date with constantly changing regulations, including working with legal professionals or using resources provided by your franchisor.<\/li>\n<\/ul>\n\n\n\n
8. Operational Procedures<\/h3>\n\n\n\n
This section should discuss the daily operations of the franchise. While you can generally take a lot of these procedures directly from the franchisor\u2019s operating manual, there are still details that may be different depending on your location and management preferences.<\/p>\n\n\n\n
Here, you\u2019ll discuss the day-to-day procedures, such as opening and closing times, sales processes, equipment needs, training plans, and more.<\/p>\n\n\n\n
The operational procedures section of your business plan is your opportunity to provide any and all details on how you\u2019ll manage the franchise. You\u2019ll also want to include information on your staff’s different roles and responsibilities, including the management team.<\/p>\n\n\n\n
9. Financial Information<\/h3>\n\n\n\n
This is the section of your franchise business plan that banks, investors, franchisors, or future partners<\/a> will examine the most closely. The financial information portion of your franchise business plan will cover all of the financial forecasts, profit margins, and the amount of money needed to start the franchise. It is important to be as transparent and honest here as possible, as you may be asked to back up your financial information with documentation. <\/p>\n\n\n\n
Here is everything to include:<\/p>\n\n\n\n
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- Total amount of money<\/a> needed to get started<\/li>\n\n\n\n
- Breakdown of your startup expenses (franchisor fee<\/a>, build-out costs, initial marketing, etc.)<\/li>\n\n\n\n
- Capital you plan to invest<\/li>\n\n\n\n
- Capital you\u2019ll need to raise through financing<\/a> (loans, crowdfunding, franchisor funding, etc.)<\/li>\n\n\n\n
- Revenue projections for the first 5 years<\/li>\n\n\n\n
- Revenue and profit information from other franchisees in the same parent company<\/li>\n\n\n\n
- General operating costs (staffing costs, rent, ongoing royalty payments, inventory)<\/li>\n\n\n\n
- Profit margins<\/li>\n\n\n\n
- Cash flow strategy<\/li>\n<\/ul>\n\n\n\n
10. Marketing Plan<\/h3>\n\n\n\n
- Breakdown of your startup expenses (franchisor fee<\/a>, build-out costs, initial marketing, etc.)<\/li>\n\n\n\n
- Permits and licenses<\/strong>: Break down the specific permits required to operate your franchise, such as business licenses, health permits, or signage approvals.<\/li>\n\n\n\n
- Target audience<\/strong>: <\/strong>For example, if you plan to open a Sports Clips, you\u2019ll target men, while Plato\u2019s Closet may primarily market to women.<\/li>\n\n\n\n
- Research<\/strong>: Gather information on your competitors’ websites, social media profiles, marketing strategies, products they offer, pricing, and estimated sales.<\/li>\n\n\n\n
- Indirect competitors<\/strong>: Companies providing different products or services that solve the same problem for the target audience and may act as an alternative option.<\/li>\n<\/ul>\n\n\n\n
- Direct competitors<\/strong>: Businesses offering the same or nearly identical products or services to the same customer base as your franchise.<\/li>\n\n\n\n
- Company background<\/strong>: History of the franchise, when it began franchising, how many franchises are currently operating.<\/li>\n\n\n\n
- Franchisee background<\/strong>: In this section, you\u2019ll briefly describe your background, describing other business ventures and industry experience.<\/li>\n\n\n\n