How to Write Your First Franchise Business Plan

Some people see buying into a franchise as a ‘safe’ way to become an entrepreneur. While there are certainly benefits to doing this, franchisees can still fail if they don’t start off with a great plan for buying and launching a franchise. In fact, your plan should be in place as early in the buying process as possible. This will help you to determine and prepare for the challenges that might come up. Most lenders and investors will also expect you to have a clear business plan.

As a potential franchisee, you will have one advantage. Some work will be done for you. For example, there’s a document called the franchise disclosure document. It will contain most of the financial information you need. Other entrepreneurs have to research or predict these numbers. To help you with the rest, here’s a breakdown of each portion of a standard franchise business plan.
This is the first section of your business plan. Read this off with a brief description of the product or service. Next, create a list of the objectives of this business. Answer the following questions:

Summarize Your Purpose and Goals in the Executive Summary

● How much growth potential is there?

● How is your business going to be successful?

● How will you succeed in light of the competition you will face and other challenges?

● What unmet need will your business meet in the current market place?

For example, imagine you are trying to purchase a commercial cleaning franchise. You might mention that there are several new small businesses that have opened in your region, but no commercial cleaning businesses.then, point out how your business will allow small business owners to outsource this work to you along with light maintenance.
This section is fairly easy to write. Most of it will be based on the FDD document. It will include a description of the franchise, in a list of the products or services that you will offer.

Write The Business Description

Janine Watters is a writer who specializes in copywriting for small business at Grab My Essay. She says the description is all about clarity. According to Janine, “Here there will also be a description of your competitors, a market overview, and information about the procedures used for ensuring that customers receive the goods and services they purchase. Finally, this is where you will list any risks involved.”
The management summary will be a listing of the members of your management team who have important roles in your daily operations. For each member, you should include information about their background and any relevant experience. This will speak to your ability to recruit the talent you need for your franchise.

Describe Your Management Team

Your management team description should be detailed, well-written, and you might even consider adding a professional headshot. Consider the following resources when creating this section of the business plan to make it as attractive and informative as possible Canva, Trust My Paper, and Hemingway.

You’ll approach the sales and marketing portion of your franchise business plan a bit differently than you would in a standard business plan. Here, the franchisor often controls the methods you will use to market your business and sell products to the customer. To write this section accurately, you’ll need to seek information from the franchisor, and read the documentation provided to you. Ask the following questions:

Summarize Your Sales and Marketing Plan

● What role will the franchisor play in the initial marketing and advertising burst to get the word out about your new business?

● Do have ongoing advertising campaigns in which you can participate?

● Are you allowed any choice or creative input in the marketing and advertising you will deploy?

If you are given some power to influence marketing and advertising, include a section that details how you plan to attract customers. Take into consideration the specific needs, cultural norms, and other important data about your target audience and location.
The FDD you receive will include financial performance data. This will be separated by franchisor owned locations and franchised locations. Obviously, you will be more concerned with financial data for the franchised locations. Still, you should keep in mind that overall profitability can be misleading. These numbers will likely include data on locations that are performing well above average, and those that are near failure.

Franchise Business Plan Financial Projections

To really find accurate numbers, you’ll have to dig deeper. Talk to the franchisor, and seek their guidance. What you really want to know is how to franchise locations are performing that are similar to yours. For example, if you are in a rural, southern community, you will want to know how other franchises in rural, southern communities are performing. Finally, when given the choice, always err on the side of making more conservative predictions.
This part of your business plan will include three elements:

Your Financial Needs

● Balance Sheet

● Cash Flow Statement

● Profit And Loss Statement (P&L)

Again, you will get a majority of the data you need in your FDD document. Here, you will find startup costs and the amount of investment you will need at the outset. You will also need to include any costs that you could have during your first year. For example, how much cash will you need for operating expenses? You will also need an educated projection of how long it will take you to earn a profit. All of this data is necessary so that you know exactly how much funding you will need to have in order to get your franchise off of the ground.
If you follow the framework outlined above, your franchise business plan should have all the elements it needs. You’ll be able to use this document to communicate the necessary information to the franchisor, investors, business partners, and others. Keep in mind that this document provides proof and assurance that you are in a position to launch and maintain a successful franchise. Think of it as a part sales document, and part financial disclosure. Of course, your document should absolutely be customized according to your specific situation. Work with the franchisor, your bank, and potential investors to see if there is additional information that you should include.

Final Thoughts

If you follow the framework outlined above, your franchise business plan should have all the elements it needs. You’ll be able to use this document to communicate the necessary information to the franchisor, investors, business partners, and others. Keep in mind that this document provides proof and assurance that you are in a position to launch and maintain a successful franchise. Think of it as a part sales document, and part financial disclosure. Of course, your document should absolutely be customized according to your specific situation. Work with the franchisor, your bank, and potential investors to see if there is additional information that you should include.

Nicole D. Garrison is a professional writer and content strategists. She is a contributor at BestEssayEducation, as well as a number of other platforms for marketing professionals. She is an experienced writer who is dedicated to quality research as a key part of the writing process. In her spare time, Nicole enjoys running and beekeeping. She also operates the popular lifestyle blog, LiveInspiredMagazine

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