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How to start a franchise

12 steps to franchising a business..

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How to start a franchise business

How to buy a franchise with no money, buying a franchise vs. starting a business, bottom line, frequently asked questions.

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Opening a franchise allows you to flex your entrepreneurial skills without starting from scratch. You get a proven business model while still being your own boss. However, the startup fees can be pricey, and you must sign a contract committing to the franchisor’s playbook.

Starting a franchise can take three to four months from your initial research to the final purchase, according to the Small Business Administration (SBA) (1) .1 After you’ve signed the contract, it could take another two to six months until you’re ready to welcome customers.

That said, running your own franchise can be rewarding — and lucrative. These 12 steps can help guide you from conception to opening day.

1. List your top companies or businesses

When putting together a list of franchises you’d like to own, start by thinking about your favorite businesses. Consider your strengths, weaknesses and passions against what you think could make you money.

Franchises are available in nearly every industry:

  • Business services
  • Convenience stores
  • Real estate
  • Educational and learning
  • Entertainment
  • Specialty retailers
  • Travel agents
  • Health and fitness
  • Home healthcare

2. Research the franchise market

You can gather information about market conditions in your area, including demand and predictions for economic growth, through the SBA, the Census Bureau and private market firms to help you choose which franchise to open.

Take advantage of the resources at your local Small Business Development Center or a business school at a nearby college or university.

People who already own franchises can be invaluable resources. Ask about their experience and whether the process was worth it.

3. Evaluate investment and franchise costs

After you’ve pinpointed a market, research and compare the costs associated with your top picks. Franchise costs vary widely depending on the industry and business you choose to invest in, not to mention where you live or plan to do business. (2)

Note that some franchise owners — called franchisors — require a minimum net worth for franchisees.

When calculating the cost of starting your chosen franchise, look beyond upfront fees to costs that come with everyday business ownership.

4. Request a franchise disclosure statement

Reach out to the franchisor for a copy of its franchise disclosure document (FDD), which contains detailed legal information about its franchise group, along with financial data like the average gross revenue of its locations.

Sometimes you can find FDDs available for free from online databases around the web. Just make sure you obtain the most recent version, as franchisors release a new FDD every year.

Also, consider the retention rates for your chosen franchise. A retention rate is the percentage of locations that close each year. Section 20 of the FDD breaks down closures by state, so you can see how many have closed in your area compared to those in operation.

What else can I find in the franchise disclosure document?

An FDD covers more than 20 elements of buying a franchise, such as fee requirements, estimated initial investments and performance and revenue details.

It’s the legal information a franchisor is required to disclose to you, the franchisee, as part of due diligence before you invest.

The franchisor must provide you with the FDD at least 14 days before you sign a contract, though it’s a good idea to request a copy for your initial research. You can typically download a PDF of the FDD, though some franchisors might send you a hard copy.

5. Consider forming an LLC or corporation

Purchasing a franchise as a limited liability company (LLC) or corporation, rather than as a sole proprietor , provides financial and legal protection of your personal assets.

As an LLC or corporation, you aren’t held personally accountable for debt incurred by the franchise. If you remain a sole proprietor, you’re legally indistinguishable from your business — so you must cover business debt out of pocket, if necessary.

The same goes for lawsuits. As an LLC or corporation, your personal assets are covered if someone decides to sue your franchise.

6. Write a comprehensive business plan

A good business plan can help you analyze costs, predict sales and estimate profits before signing an agreement. Research what to expect in the months and years ahead to gather the information you need to take the next step — or pause if you’re not ready.

A successful business plan typically includes eight key components:

  • Executive summary
  • Company description
  • Market research
  • Organization structure
  • Product research
  • Financial analysis and funding needs
  • Financial projections

A business plan is necessary if you plan to apply for funding. Lenders want to see a viable plan for turning a profit and sustaining your business over the long haul, as it helps them evaluate if you’ll repay.

7. Get the financing you need.

If you don’t have the initial investment costs at the ready, you may need outside financing to launch or run your franchise. Many banks, the SBA and franchise-specific lenders offer financial help for would-be franchisees.

Other options include crowdfunding or lenders based entirely online. Online lenders like Kiva and Bluevine tend to leverage technology for more streamlined or automated approval processes. You could also use an online business marketplace like Lendio or Fundera to compare a network of funding options in one spot.

Some franchisors, like the UPS Store, Chem-Dry Carpet Cleaning and Cruise Planners, offer financing assistance, either through in-house programs or partnerships with third-party lenders. For example, Cruise Planners finances 50% of your franchise costs over the first 12 months, while Chem-Dry offers in-house financing for the initial licensing fee. This information is available in section 10 of the FDD.

8. Apply for the franchise and an interview

How you apply depends on the franchise you choose. For example, McDonald’s allows you to fill out an application online, while Chick-fil-A requires an expression of interest form to get the ball rolling.

Plan to attend interviews with the company, which allows time to parse through important details and determine if you’re a match for the franchise.

Expect questions that cover your plans, experience, finances and support, including your:

  • Goals, timeline and territory
  • Previous franchise and industry experience
  • Reasons for choosing the industry and franchise
  • Personal support system
  • Financial capital and business plan
  • Leadership experience
  • An exit strategy

9. Review and sign the franchise contract or agreement

If after your interview you and the franchisor decide it’s a good match, it’s time for the paperwork. You’re required to complete a franchise contract, which is a binding legal document that details:

  • Location and territory
  • Equipment and operations
  • Royalties and ongoing fees
  • Advertising and marketing
  • Trademarks, patents and signage
  • Training and ongoing support
  • Quality control and insurance
  • Dispute resolution
  • Renewal rights
  • Termination and cancellation policies
  • Exit strategies

Franchise contracts come with terms of five to 20 years. At the term’s end, you can often choose whether to renew the contract or discontinue your franchise.

At contract signing, you’ll likely need to also pay any upfront fees or initial investment expenses. Talk with the franchisor about preferred payment methods so you’re prepared.

10. Comply with state and local permit requirements

Most state and local governments require you to obtain licenses before launching your franchise — including health permits, occupational licenses, tax registrations and business licenses — or face fees.

While most states require the franchisor to apply for business licensing, a handful of states require a franchisee to register:

  • Connecticut
  • North Dakota
  • Rhode Island

You may also need to register for a license on a county or city level. Your franchisor should be able to help you anticipate permits required for your area and navigate the legal requirements. The SBA also provides information about franchise licenses that depend on your industry and state.

11. Build your location and assemble your team

The franchisor provides you with the essential elements of preparing your space — like signage, blueprints, fixtures and general decor — but you’re in charge of hiring contractors for the construction work.

You’re also responsible for hiring and training employees . Most franchisors provide training resources for franchisees, even sending a representative to help bring everyone up to speed about company branding, culture and expectations.

12. Stage a grand opening

In the days and weeks leading up to opening day, generate an awareness of your brand within the surrounding community. Most franchisors provide a marketing game plan and might even send a corporate team to help with your grand opening.

When preparing for your big day, a few tips can help make it a success:

  • Choose a date with high traffic to attract as many people as possible.
  • Send press releases to local media and advertise to your market.
  • Invite friends, family and city officials.
  • Decorate the store to attract attention and generate a festive feeling.
  • Organize exciting activities on opening day, like door prizes or giveaways.

If you’re short on cash, you aren’t disqualified from starting a franchise — but you’re going to need to explore funding and financing to get from planning to opening day.

  • Small business loan . Available amounts for small business loans range from $5,000 to $5 million, and rates start at around 5%.
  • Personal loan for business . A personal loan typically comes with fewer requirements. However, they often max out at $50,000, and expect rates from 4% to 36%.
  • SBA loan . Loans from the Small Business Administration (SBA) are known for low interest rates, but strict requirements and a lengthy application.
  • Home equity loan or HELOC . Consider borrowing against the equity in your home as a home equity loan or line of credit . But, because your financing is tied to your home, you risk losing your property.
  • Rollovers for business startups . A rollover for business startups — or ROBS — allows you to invest retirement funds into your business without paying taxes, fees or interest. However, this puts your retirement at risk.
  • Business partnership . Partners can assume part of the financial risk if you can’t fund the business alone. However, while you split the funding, you also split the profit.

When deciding between buying a franchise and starting your own business from scratch, a major difference is the initial investment compared to the ongoing fees. Buying a franchise usually costs more upfront, while the expense of starting your own business varies widely but is typically cheaper in the beginning. (3)

How important is autonomy to you? With a franchise, you’re buying into an existing business with limited control, as you’ll need to follow strict branding, marketing and legal guidelines. Starting your own business, on the other hand, offers more creative freedom. But, that comes with the challenge of building a customer base from nothing.

Overall, buying a franchise means you’re part of a proven system with more restrictions, but also with the benefit of brand recognition and corporate support. A new business means you’re building everything from the ground up, with more risk but also more freedom.

Case study : Opening a Critter Control franchise

Let’s say you want to open a Critter Control franchise in San Jose, California — a city with a population of about 1 million people. At an average of $582,828 gross revenue for that market, according to Critter Control, here’s what you could reasonably expect.

To estimate your profits in the first year of opening, you’d subtract the franchise fee, initial investment, operating costs and royalties from the average gross revenue.

Average gross revenue – (franchise fee + estimated initial investment) – operating costs – royalties

= First-year profit

$582,828 – ($70,100 + $116,550) – $326,384 – $46,626

Using this equation, you can expect to pocket about $23,168 after your first year in business. Because the franchise fee and initial investment are one-time fees, you should be able to make more money in the following year — some $209,818, assuming your average gross revenue stays about the same. As the business grows — and your gross sales increase — your profit is expected to increase over time, barring unforeseen circumstances in the market and industry.

Starting a franchise might be the right choice if you’ve got a solid game plan for raising funds and like the idea of following a tried-and-true business model. But if you’re still on the fence or want to research other options, browse our small business guides to starting, buying or growing a business.

How much money do you need to start a franchise?

The cost of buying a franchise depends on various factors, such as the location and industry. A restaurant in New York will cost significantly more than one in a small town — even just for the real estate alone. Startup costs can range from $10,000 to $5 million, with the average falling between $100,000 and $300,000, according to APD.2

How profitable is owning a franchise?

The profitability of a franchise varies significantly based on the brand’s strength, industry, startup costs and other factors. Data from 2017 shows that for food and beverage franchises, the median annual income is around $70,000 for two years or more in business and around $50,000 for startups. Only 34 percent earned more than $100,000, while many earned much less, according to a survey by the Franchise Business Review.3

How do franchise owners get paid?

Franchise owners and franchisors profit from the business’ success. Franchisors earn income through the royalties and fees paid by their franchisees, while franchise owners generate income from the net profits of sales and services, which is the remaining revenue after deducting overhead expenses. These overhead expenses include the cost of equipment, inventory, staffing and maintenance of a physical location, including utilities like electricity and internet.

  • “How long does it take to start a franchise?,” US Small Business Administration, September 6, 2018
  • “Franchise startup costs,” ADP
  • “How much do franchise owners make and is it profitable?,” Franchise Business Review, October 6, 2018

how to make a business plan for franchise

Holly Jennings

Holly Jennings is an editor and updates writer at Finder, working with writers across all niches to deliver quality content to readers. She’s edited hundreds of financial articles ranging from credit cards to investments. With empathy at heart, she especially enjoys content that breaks down complex financial situations into easy-to-understand information. Prior to her role at Finder, she collaborated with dozens of small businesses to maximize the reach and impact of their blog posts, website copy and other content. In her spare time, she is an award-winning author for Penguin Random House, writing about virtual reality worlds, magical girls and lasers that go pew-pew.

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How to Write a Franchise Business Plan + Template

A collage of burgers, fries, soda, and coffee cups laid out in multiple rows.

Elon Glucklich

8 min. read

Updated February 7, 2024

Free Download:  Sample Franchise Sandwich Shop Business Plan Template

Owning a franchise is an excellent way for business owners to gain instant brand recognition. 

By paying a franchise fee, you can own a fast-food restaurant like McDonald’s, Subway, or Kentucky Fried Chicken, a 7-Eleven convenience store, a gym chain, or even a hotel like a Marriott or Hilton. 

For franchises with fees between $25,000 and $100,000, recent research indicates that the 5-year business failure rate is about 5 percent , just one-tenth of the overall business failure rate. Put simply, you have a much higher chance of success opening a franchise than a traditional business.

But getting a proven brand name doesn’t guarantee success. You’ll need to ensure you understand the franchise’s business model and expectations. 

Plus, you need to determine if there’s a big enough market for your business to be successful, what potential customers expect from businesses like yours, and how many competitors you’ll face.

Fortunately, answering these questions are all part of writing a comprehensive business plan . Here are the steps to writing a franchise business plan that shows your business’s unique value—while answering critical financial and operational questions your franchisor or lender will want to know.

Ready to write your plan? Check out our selection of franchise business plan examples to inspire your own.

  • Why you need a business plan for your franchise business

Writing a detailed business plan is crucial for two reasons. 

First , it demonstrates to the franchisor that you understand how their business operates. 

Since the company sets your prices , controls your product inventory, and will likely tell you what marketing tactics you can use—the business plan puts in writing that you understand how their rules and guidelines affect your business.

Second , the plan also organizes all of your expectations, assumptions, and research about your business into one document that serves as a roadmap for success:

  • Business objectives
  • Franchisor requirements
  • Funding needs
  • Financial goals
  • Growth strategies

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How to write a business plan for your franchise 

1. understand your franchise business model.

Since the franchisor has already established the company’s business model, your business plan should focus on how you can adapt it to be successful in your chosen location .

Imagine you’re planning to open a fast food restaurant, chain hotel, or convenience store. How do these kinds of businesses operate successfully? Consider the business models of each:

Fast food restaurant: Standard menu, streamlined kitchen operations, marketing strategy leaning heavily on national advertising campaigns.

Hotel: Efficient room turnovers, maintaining cleanliness and amenities that the brand promises.

Convenience store: High foot traffic, quick inventory turnover, and flexible operating hours.

Each case presents different business dynamics – and considerations for your business plan. You should be able to show in your plan that you understand the revenue streams and direct costs of running this type of business, and what your customer acquisition costs might be.

2. Conduct a market and location analysis

Buying into a franchise gives you some marketing advantages. You have a widely recognized brand to attract customers, access to promotional materials, and maybe even some information about customer buying patterns from your franchisor.

But operating a franchise doesn’t take away the heavy lifting of market research . Each franchise has to consider local factors that could affect its profitability.

A good starting point is to conduct a SWOT analysis , documenting the strengths, weaknesses, opportunities, and threats facing your business. Here are some other key elements to consider:

Demographic study

  • Employment status

Understanding the demographics of the people most likely to visit your business could help you set operating hours or decide who to target with promotions.

Competitor analysis

  • Identify your competitors
  • Compare your product or service offerings with theirs
  • Compare price points
  • Compare marketing strategies
  • Define the competitive advantage of your business

Don’t just look at direct competitors that are similar to your franchise. If you’re opening a 24-hour 7-Eleven, you should also look at supermarkets, drugstores, or food delivery services in your area.

Geographic analysis

  • Neighborhood characteristics
  • Population trends

A chain restaurant in a busy downtown probably has different customers and peak times than the same restaurant in a shopping center near a residential area. So it’s essential to understand the characteristics of the neighborhood you’re operating in.

Consumer behavior patterns

  • Technology use

Understand what drives consumers interested in your business to make the choices they do. This is where you will want to do online research and, ideally, go out and talk to potential customers.

Franchise-specific research

You should also answer questions about the competitive positioning of the franchise – and franchises as a whole – in your area.

  • How do similar franchises perform in your area?
  • What is the brand perception of the franchise you intend to start?
  • Is there a large enough market in the area for your franchise?
  • What non-franchise options are available? What are the advantages or disadvantages for customers who shop there instead?

Be sure to examine what potential customers discuss on social media platforms and online message boards like Reddit to understand what they expect from businesses like yours.

3. Highlight your unique value proposition within the franchise

Even though you’re buying into a proven business model , you’ll still face competition. Your business plan gives you a chance to put on paper what gives you a competitive advantage. 

In the case of a franchise business , your franchisor may be the most important stakeholder to read your business plan. So the plan is to show them you can run a successful business under their name.

Maybe the 7-Eleven convenience store you want to open is in a location with a lot of foot traffic and no larger grocery stores nearby. Or maybe your restaurant offers late-night delivery in an area with few alternatives. 

By outlining your unique value proposition in your business plan—you can align your individual strengths and market opportunities with your franchisor’s proven business model.

Backing up your unique value proposition with any data or information about customers will be especially important if you’re operating in a crowded market with lots of competition.

4. Do your own financial projections and scenarios

The franchisor may provide some guidance, but this is your business.

That means your business plan should include the same financial details and projections as if you were starting a business from scratch. Your financial plan should include:

Start-up costs : The initial investment required to get your franchise off the ground. This should include the franchise fee, the cost of equipment, initial inventory, license fees, and any expenses related to your location.

Ongoing fees and operational costs: These are costs that recur monthly or annually. They include fixed costs like franchise royalties, lease payments, and staff salaries, and variable costs like utilities, inventory, maintenance costs, and marketing expenses.

Revenue projections : Detail how much revenue you expect to bring in monthly. Forecast revenues out into the future, and don’t be afraid to make projections several years out. 

Remember, good financial forecasts are meant to be adjusted as real numbers come in, and comparing your projections with actuals over time can help you make better business decisions.

Break-even analysis : This is where you calculate how long it will take for your franchise unit to cover its initial investment and start making a profit. Knowing your break-even point is essential not just for you but also for lenders.

5. Create an operational plan

Even though the franchise provides the business model, you must ensure it runs smoothly daily. Your business plan should provide a clear operational plan that outlines :

Staffing needs 

You should be specific about the staffing level your business needs . You’ll need cashiers, cooks, and delivery drivers if you’re running a fast-food franchise. List the skills and experience needed for each role, and outline your plans for training new hires.

Inventory management

While a franchise agreement might take some of the pressure off of sourcing your inventory, it’s still your responsibility to develop processes for managing it. 

You’ll need to understand if there are seasonal trends in your business, how often various products are returned, how long an item can sit on your shelves, and a variety of other factors that affect how much of a product you should order and when you should order it.

Quality control

Since you’re operating under a franchise agreement, you must comply with the standards the franchisor sets out for operating their business. Detail the quality control procedures you’ll put in place to meet those standards. 

Also, take some time in the business plan to address how you’ll stay compliant with local, state, and federal laws and the franchise’s policies.

6. Review and adjust your business plan

The business plan for your franchise should not be a static document . Market conditions evolve, consumer demands change, and new competitors emerge. Additionally, Franchisors often update their business models, add new products, or change their marketing strategies.

You may also be expected to periodically share financial reports or general updates about your business with the franchisor. (LivePlan lets you create and share visually engaging, professional reports using information from your business plan.)

Either way, your plan should outline how you’ll account for market shifts or franchise changes in your operations. Just as important, you should make it a habit to review your business plan periodically – many business owners review their plans quarterly or even monthly, especially when starting out. 

That way, they can adapt the plan as their business evolves.

  • Download your free sample business plan for a franchise business

If you need help getting your franchise business started, check out one of our free sample franchise business plans . You can download this document in Word form and customize it to get you started on your own business plan. 

It’s just one of 550+ sample business plans we’ve made available to download.

You can also review our step-by-step guide on how to write a business plan for a detailed look at how to write specific sections of a traditional business plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Content Author: Elon Glucklich

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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  • How to write a business plan for your franchise 

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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

Franchise Business Plan

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

We have helped over 10,000 entrepreneurs and business owners with how to create a franchise business plan to start or grow their franchises.

How To Write a Franchise Business Plan & Sample

Below is are links to each section of a franchise business plan example to help you start your own franchise business:

  • Executive Summary – This section provides a high-level overview of your business plan. It should include your company’s 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 look at your company, including information on your franchise’s history, franchise business model, ownership structure, and management team. You will also include a copy of your franchise agreement.
  • Industry Analysis – In this section, you will provide an overview of the industry in which your franchise will operate.
  • Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
  • Competitive Analysis – This section will provide an overview of your competition, 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 this section, you will detail your marketing strategy, 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 – In this section, you will provide information on your management team, their experience, and their roles in the company.
  • Financial Plan – This section includes your company’s financial statements (income statement, balance sheet, and cash flow statement). It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is a franchise business plan.

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

You can  easily complete your business plan using our Franchise Business Plan Template here .

What Are the Main Types of a Franchise?

About any type of business can be franchised. Franchises are categorized according to different factors like investment level, franchisor’s strategy, business operations, and marketing and relationship models. The most common types of franchises are job franchise, product or distribution franchise, business format franchise, investment franchise, and conversion franchise.

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

The main source 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?

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.

Where Can I Get a Franchise Business Plan 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.

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Creating a Business Plan for Your Franchise: What to Prepare Before Asking for Money

by Franchise Direct

🕒 Estimated Reading Time: ~8 minutes

Creating a Business Plan for Your Franchise

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).

Lenders use a business plan as a guide

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.

Common parts of a business plan include

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.

The best outside source of information to complete your business plan is the franchisor

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

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  • Basics of the Franchise Disclosure Document (FDD)
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  • Completing and Signing a Franchise Agreement

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How to Build a Comprehensive Franchise Business Plan

The franchising industry has never been as diverse and dynamic as it is today. Millennial business leaders have charged into the sector, bringing creativity and strategic integrity along for the ride. While 44% of franchisors are Baby Boomers, innovative business technology has reinvented the way we think about franchising. Automation has not only changed the way franchisors do business with end users, but also the way brands connect with and train their franchisees. E-commerce has leaked into the sector, bringing globalized trade with it. Multi-unit structures still dominate, but fresh approaches to business models are adding some zest to the cocktail. Customer relationship management (CRM) and logistics systems are increasingly being used to streamline everything from marketing to warehousing. In the new decade, every inch of business movement will be measured, analyzed, and streamlined, and that leads to one thing: profits. CRM will get your business moving from the first letter of your franchise business plan until your ultimate exit.

Building a Franchise Business Plan that Assures You of Success

The brave new world of franchising demands more from your business plan than ever before. It’s not easy to set up a franchising model scalable enough to cover international markets and digital demographics. Your franchising model must cater to local and national markets without ruling out global ones. It must trade in the brick and mortar space, yet develop thrust in the digital marketplace as well. Your growth strategy needs to build a detailed route into your future, and your model is the foundation that will keep your path from crumbling as the decades pass. When you take your successful business into the franchising sector, you need to create a completely new business unit and plan.

In essence, franchising is a pivot from selling a product to selling a business concept. Your success no longer ends with you. You can only be profitable if your franchisees are profitable, but your fees, commissions, and structure weigh heavily on your revenue, too. How will you break even? How will you assure your recruits of grand success? How will you ensure that your product and brand remain consistent across thousands of units? Your franchise business plan will answer these questions.

Executive Summary

Your executive summary is a brief overview of your plan that’s intended to captivate funders and lenders. Think of it as a cross between a miniature business plan and a pitch deck. It should outline a clear business strategy through both data and substance.

Franchise Introduction

Your franchise introduction is potentially the last thing your potential investors will read about your franchise, so it needs to be compelling. It’s typically a three-page management overview of your franchise covering your business goals, description, and justifications for franchising your business. Include your profit milestones, competitive differentiation, and geographical considerations. The rest of your franchise business plan will pull apart all of these numbers in greater depth.

Franchise Description

This is your opportunity to express your vision. Your description includes your formation data, founders, markets, and location. If you’re franchising an existing business, your description should also outline your current pre-franchised business’ achievements.

SWOT Analysis

A franchise business plan isn’t just a dedication to everyone who might invest in your vision. It’s also an opportunity to tighten your own intentions. Your SWOT analysis will serve you more than it does your funders, but it’s integral to your competitive edge. It should include your brand’s strengths, weaknesses, opportunities, and threats, both in terms of your brand and whether franchising offers its best chance of success. Your SWOT positions you in the market alongside your rivals, so it will tell you if you need to pivot or diversify yourself before you launch. The market research you collect will unveil the fundamental problems that could annihilate your dream. 

Product or Service Description

While the product your franchise sells matters, don’t neglect your new product: your franchise concept. Your product description should outline your development stage, pricing strategy, and any research and development you intend to do in the near future.

Marketing Plan

Business concepts can’t grow legs without a marketing strategy . Odds are excellent you’ll need to redraft your marketing approach entirely when you franchise an existing business, including key market and industry analysis for both your brand and franchise concept. Automation and machine learning can generate the data that will fuel this part of your franchise business plan. It might be tempting to start fantasizing about grand creative campaigns at this point, but flights of fancy will lack weight if they aren’t hooked into information. Even the most rudimentary research costs an average of $20,000 , but there are two cheaper and more effective solutions: automation and machine learning. An AI-based CRM will send your forecasting to new heights, helping you to draft consumer profiles to fuel your ultimate marketing strategy.

Royalty Fees

Your royalty fee structure determines how sustainable your franchise will be. It covers your running fees while providing one of your core regular income sources. Your choice of fixed or percentage rates can mean the difference between firecracker profits and a monthly slog, but set it too high and you risk chasing away recruits. CRM software will do the number crunching on your behalf, running as many simulations as you need to find a reliable structure.

A Financial Forecast

The quality of your financial projections will determine how seriously your investors will take you, so make it count. Your franchise business plan is nothing more than a concept until you flesh out the forecasted numbers. This is the psychic of your plan, and it doesn’t always bring good news. It might convince you not to go into business at all. The deeper you dive, the more accuracy you’ll gain. Your forecast will include profit and loss, balance, and cash flow sheets, but don’t let those terms trap you in an accounting mentality. It’s intended to tell you where you’re going, not where you’ve been, so your calculations will be quite different. A forward-looking view defines your first and last moments as a franchisor. As such, it helps you to create your exit plan.

Planning for Your Exit

As important as it is, many entrepreneurs don’t have an exit strategy . If your franchise agreement and roll-out plan are the hors dóevres of your franchise business plan, your exit strategy is the dessert. This is your opportunity to reap rewards, but it’s a part of your meal and needs to be planned for from the beginning. No matter how tempting it is to reach beyond the “buy, build, sell” mentality, every investment needs to be parted with. Building in a way that supports an impressive valuation has its own rewards, and they arrive in cold, hard profits. Franchisors sell their franchises for many reasons. Retirement, fresh opportunities, and simple profit drive are three of the most common, and they may ultimately push you into a sale. Even so, it’s unwise to swim out into a lake if you don’t know its length, otherwise you risk drowning.

If you’re ready to leap into a great business opportunity from the beginning, you’ll gain control of the resale process. A formal exit plan is best drafted with the guidance of an attorney or accountant who is qualified to juggle the taxation issues relating to your sale and transfer of ownership. Your strategy should include a primary exit goal detailing who you expect to sell to and when. You needn’t make an absolute exit. Many franchisors take on an advisory role instead. Finally, you’ll need to list the actions you need to take to achieve your exit valuation. 

Building Multiple Franchise Units Simultaneously

When Ray Kroc transformed McDonald’s from a neighborhood store into a global legend, he had a thousand dreams about taking the concept to the entire world, but one dream ruled them all: the desire to create a burger recipe that could be repeated customer after hungry customer without losing any quality. Once he’d struck beefy gold, his next dream was to do it repeatedly across franchises. To achieve that, he decided to start small. He built uniform systems to cover everything from his first unit’s administration to its management style and trademark. Only once he’d achieved that did he roll his business out to franchisees, and his slow, steady work was the reason for its resounding success. Today, it’s also the reason new franchisors use the Ray Kroc roll-out strategy.

Your initial roll-out of franchise units is, in many ways, the toughest educational experience you’ll ever face. Your learning curve will be more of a vertical line than a slope, and no amount of research will teach you all you’ll need to learn. This is something you must learn in practice, and there are a myriad ways to approach the challenge. One of the simplest is to avoid it entirely by building a single flagship unit before attempting a wider roll-out. This way, you can flatten the curve and pay closer attention to the tiny details that will one day characterize your brand. It will also allow you to recruit potential franchisees through a living business concept—and nothing is quite as convincing to recruits as legitimate sales figures and a queue of passionate customers.

A slow network roll-out lets you nurture your first recruits and solidify their success. When you aren’t juggling 20 units at once, you have the time to turn your franchise business plan into a living, breathing organism with its own marketing materials, logistics strategies, and on-boarding tactics. Each of your first franchises will need to be within driving distance to one another, but when you’re working with a new brand, your client base won’t be large enough to warrant a unit on every street corner. Slow market penetration should, however, lead to fast diffusion and adoption, but no strategy is completely airtight. You’ll experience lower profit margins initially but will be less likely to shoot holes in your brand identity.

Synuma can increase your diffusion rates and ramp up your profit margins by automating the rollout process. Why do it the Ray Kroc way when you can enjoy all the benefits without the drawbacks? This intelligent software will improve your decision making and let you shrug off many of your responsibilities by handling repeatable tasks in a standardized way. It will support your initial franchisees and offer you a more hands-free management process.The Development and Operations Modules won’t require you to develop your own systems, but membership gives you access to potent development tools that will support your roll-out where it counts for you. This is, after all, a unique brand that should be guided by your own values and priorities. Nobody ever achieved grand dreams by fitting inside someone else’s cookie cutter. Your roll-out plans will be very different if you’ll be relying on CRM software, so bear it in mind when you write your franchise business plan.

Lead Qualification

Franchising is one of the best growth strategies in the business world, but it’s not fail-proof. Living on the cusp of your own growth curve requires a powerful lead qualification strategy that will identify the recruits who will serve your brand profitably. One bad choice and you can send your business into a PR crisis that travels halfway across the world in a day’s worth of social media posts. Every unit you open requires a considerable investment of time and money, but reps consider lead qualification to be their greatest challenge . CRM software has become innovative enough to tell you which leads are engaged, which are merely curious, and which fit your target market like a second skin. The days when you had to qualify your leads over the phone are over. Machine learning and automation will handle the process while you’re on the road to meet your first franchisee—no independent research necessary. CRM technology generates an average return of $8.71 per $1 spent : a growth rate that increases exponentially when you’re selling franchises rather than products. Factor it into your franchise business plan, and you’ll draw a far more compelling picture for your investors and potential recruits.

Avoiding Fraudulent Business Practices

In 2018, several franchisees took their Vision Express franchise to court for coercion. The claimants felt they had been pushed into signing their franchise agreements—a claim the court found to be credible. The case highlighted the fact that not all contractual exclusions are enforceable. The franchise sector marches in lock-step to a huge array of regulatory confusion, and both franchisors and franchisees must overcome it. Drafting a tight franchise agreement is no solution. Fairness and truth must prevail. Vision Express misrepresented their franchise in three areas :

The likely profits of each store

The ratio of eye tests and glasses sales

The overdraft repayment period

Ignorance is no excuse for misrepresentation, so the drafting of your agreement is one of the most complex tasks you’ll ever complete. In short, your projections, metrics, and other calculations need to be on point from your very first franchise business plan. Any sales process is weighted with risk, but franchising is particularly challenging. You can mitigate your risk through liability exclusions and boilerplate limitations, but inaccurate numbers will leave you floating out in space with no gravity to hold you down.

Not all sales fraud occurs after the point of purchase. Misrepresentation can sneak into the recruiting process as well. All in all, your FDD must cover several core facets under federal law. They are:

Background data about you as a franchisor

History of litigation

Clients and territories

Ongoing costs

Financial statements

Initial and long-term costs

Transparency and honesty are more than mere values. They’re required by law, but cost estimates are difficult to build if you’ve yet to open your first few units. This is where AI and machine learning come in. They can help you to flesh out the bare bones of your future in a transparent and reliable way.

Most businesses wait six years before rolling out their first franchise unit, but with the power of AI and automation, you can leap ahead of your own curve and tweak its growth to your own strategy. Once you’ve perfected your first roll-outs, machine learning will nudge it towards success one improvement at a time. Every franchise launch will be a learning process that makes the next launch smarter and more profitable thanks to data collection and analytics.

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The 7 Key Elements Of An Effective Franchise Business Plan

  • Adam Goldman
  • May 12, 2020

Franchise Business Plan | Franchise Coach

Whether you are purchasing a franchise business or expanding your current one, finances will always play a major role. To secure financing from lenders, it is necessary to prepare a franchise business plan .

However, it’s essential to have a solid understanding of the seven key elements in order to create effective franchise business plans.

A franchise business plan is not only a written document that narrates the core details of your independent business but also has a list of your objectives. It also includes the operations, the marketing strategy for growing your business, as well as the financial projections, including franchise fees. It’s crucial to address any pending request, ensuring a smooth and transparent process in the development and execution of your franchise strategy in your business plan.

For you to learn more, this post will discuss each of the seven elements needed when writing franchise business plans. So even without a business degree, you can write a convincing one.

Next Section, let’s get started by knowing these 7 franchise business plan elements.

What are the 7 Elements of a Successful Franchise Business Plan

After signing the franchise agreement , your franchisor will give you the marketing plan and other start-up information . The materials provided to you can help you start writing your franchise business plan outline. In many cases, franchisors will guide their franchisees in the writing process.

Next section, when you create a concise franchise business plan template could lead to getting a financial source to start a franchise or grow your existing franchise. So, let’s begin by knowing the elements you’ll need.

1. Franchise Business Plan: Executive Summary

  • Which service, product, or need, does your business serve?
  • Is your business unique?
  • How will you ensure your company’s success?
  • Is your personal savings enough to invest a business?
  • What skills do you possess that will help the business excel?

The first part of your franchise business plan outline is the overview or summary of the essential information you are providing in your new franchise business or current one.

As it will explain your business, the executive summary section should answer the following questions about your franchises:

Business plans’ executive summary is the readers’ first impression of your franchises. It is a written version of your business pitch. It should clearly define your franchises and everything it has to offer in a way that distinguishes your concept.

The executive summary should read as a separate document to introduce your business plan template. It should only reference material that you’ve provided and use appropriate language for your target audience.

2. Franchise Business Plan: Business Description

The business description section of the franchise business plan template summarizes your business. This section should contain your:

  • company’s structure,
  • mission statement,
  • and future projections.

While you don’t need to provide detailed financial data, you should include an overview of your industry, financial projections, personal savings, tax returns, and relevant business facts in your business plan.

Next section, you should include company goals in the business description of your franchise business plan. The business description is your opportunity to share short and long-term objectives for your business with your reader.

Make sure your business goals are reasonable and quantifiable . Learn from other franchisees, and avoid ambiguous terms on your franchise business plan template. Use specific language and time frames to precisely explain what you plan to achieve.

3 . Franchise Business Plan: Competitive Analysis

Franchise Business Plan (Competitive Analysis) | FranchiseCoach

A competitive analysis section is also included in any franchise business plans. It involves determining your competitors, both direct and indirect, and your deep research will help you understand your weaknesses and strengths vs. them.

To have a handful analysis of your competitors in the business in your business plan, you need to do the following:

  • Select ten direct and indirect competitors to compare.
  • Conduct research about their marketing efforts and product features.
  • Then compare the gathered details to yours.

Gaining an understanding of your competitors through your competitive analysis helps you develop an effective strategy for the success of your franchise business plan and helps you get potential funders.

4 . Marketing Plan and Sales Plan

This section of your franchise business plan highlights your business’s strategy for building and maintaining a customer base and demand for your business. Thoroughly explain how you plan to advertise, your current advertising, and the research behind your strategy.

Next section, you can use the information from the required franchise training, which is the detailed information stated in Item 11 of the FDD or Franchise Disclosure Document .

So how to write a marketing plan and sales plan or your franchise business plan outline? Here are some steps to follow when creating these plans:

1. Define your target audience

Perform a market analysis to identify the specific demographic or customer segment that you should focus on with your marketing and sales plans. This will help you tailor your messaging and tactics to appeal to your ideal customer in your business plan.

2. Set marketing goals

Establish specific, measurable marketing goals that align with your franchise business plan template objectives. For example, you might set a goal to increase website traffic by a certain percentage or generate a certain number of leads through a marketing campaign.

3. Develop a marketing strategy

Outline the tactics you’ll use in your business plan to reach your target audience and achieve your marketing goals. This might include digital marketing, social media advertising, email marketing, content marketing, or other tactics.

4. Create a sales strategy

Determine how you’ll sell your franchise product or service to your target audience in your business plan. This includes setting up a sales team, developing a sales process, or leveraging existing relationships to generate leads. 

5. Identify key performance indicators (KPIs)

Define the metrics you’ll use in your business plan to measure the success of your marketing and sales efforts. This includes metrics such as conversion rates, cost per lead, or revenue generated from marketing campaigns.

6. Set a budget

Determine the personal savings you’ll need or plan to execute for the marketing and sales of your franchise businesses in your business plan. This might include allocating funds for advertising, marketing technology, or sales personnel.

Take the time to develop a thoughtful and comprehensive franchise business plan template that reflects your unique business and target audience.

5. Franchise Business Plan: Operations and Management

The operation and management section of your franchise business plan template focuses on the daily operations and activities of your existing franchise businesses. 

It encompasses not only the core business operations but also highlights the specific responsibilities and tasks, with a particular emphasis on your role as the owner in your business plan.

As you consider the ownership structure for this venture in your business plan, it is important to determine whether it will be a sole proprietorship with you as the sole owner, or if there will be multiple owners involved.

This section of your franchise business plan also includes the company’s staffing, logistics, and solutions to potential problems that could occur in the operation of your business. To know further details about your obligation as manager of your franchise businesses, Item 15 of the FDD will explain more.

6 . Financial Plan

Other Franchise Costs | FranchiseCoach

The financial data portion of your franchise business plan should reflect and expand upon any facts. Also, the figures previously mentioned in your business plan template, including your executive summary. This section provides:

  • hard numbers for your business costs, including your franchise fees, initial costs, etc.
  • current funding,
  • and expected funding necessary in the future.

To obtain more information when starting a franchise business plan template with a franchisor, you may refer to the Franchise Disclosure Document ( FDD ).

7. Franchise Business Plan: Pro Forma

The  pro forma is similar to the financial data section. But this part of the franchise business plan template focuses more on the three main accounting statements, which are:

  • the balance sheet
  • the cash flow
  • and the profit or loss

You can create your pro forma in four steps in your business plan:

1. Create a chart of accounts.

2. Calculate your business projected earnings.

3. Create financial projections

4. Estimate cash flows

Consider speaking with the right person, such as an accountant or financial advisor to verify your estimates and validate your proposal to lenders.

Keep your Franchise Business Plan Updated!

Keeping franchise business plans updated is essential to ensure that they remain relevant and effective in guiding your franchise businesses’ growth and success.

Here are some steps to help you keep your franchise business plan up to date:

Regularly Review Financial Performance

Continuously monitor and analyze your franchise businesses’ financial performance. Compare actual financial results with the projections outlined in your business plan. Identify any discrepancies and assess the reasons behind them. Adjust your financial projection and strategy accordingly.

Customer Feedback and Market Research

Collect and analyze customer feedback through surveys, reviews, and direct interactions in your business plan. Use this feedback to improve franchise businesses’ products, services, and customer experience. Incorporate the insights gained from market research into your business plan to refine your strategies.

Assess and Adapt Marketing Strategies

Review your marketing and advertising strategies regularly in your business plan. Evaluate the effectiveness of different marketing channels and campaigns. Adjust your marketing plan based on what is working best to reach your target audience and achieve your goals.

Evaluate Operational Efficiency

Continuously assess your franchise’s operational processes and efficiency. Look for ways to streamline operations, reduce costs, and improve productivity. Update your operations plan in the franchise business plan to reflect any changes or enhancements.

Revisit and Revise Goals

Periodically review and reassess your short-term and long-term goals. Are they still aligned with your vision for the franchise? Adjust your goals as necessary and update your business plan with these revisions.

Seek Professional Assistance

Consider working with a franchise consultant or business advisor who specializes in franchise operations. They can provide expert insights and help you update your business plan outline effectively.

In conclusion, beyond relying solely on your personal savings, there exist multiple avenues to secure funding, such as bank financing, Small Business Administration (SBA) loans, franchise fees, franchisor programs, and various lending sources in your business plan.

To furnish lenders with a comprehensive understanding of both yourself and the franchise opportunity you aim to finance in your business plan, it is imperative to include essential elements such as management resumes, tax returns, media clippings, and other pertinent documentation.

By addressing these requirements proactively of your franchise business plan , you can expedite the financing process, minimizing delays in launching your franchise.

It’s worth noting that many franchisors mandate prospective franchisees to submit a franchise-specific business plan template as part of their application process. Therefore, it is advisable to ensure your plan aligns seamlessly with their stipulated requirements and guidelines.

To learn more about franchise businesses, talk to a franchise consultant .

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FRANCHISING 101

A franchise business plan, your roadmap to success.

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A franchise business plan is a written document that outlines your business goals, strategies, and financial projections. It is an essential tool for any franchisee, as it can help you secure funding, attract investors, and make informed decisions about your business.

A well-written franchise business plan should include the following sections:

Executive summary.

This section provides a high-level overview of your business, including your mission statement, products or services, target market, and business goals.

Company Overview

This section provides a more detailed look at your business, including its history, franchise business model, ownership structure, and management team.

Industry Analysis

This section provides an overview of the industry in which your franchise will operate, including its size, growth potential, and competitive landscape.

Market Analysis

This section identifies your target market and analyzes its size, demographics, and buying habits.

Marketing Plan

This section outlines your strategies for reaching your target market and generating sales.

Operations Plan

This section describes how your business will operate on a day-to-day basis, including its staffing, inventory, and supply chain management.

Financial Plan

This section provides detailed financial projections for your business, including start-up costs, operating expenses, and revenue.

Creating a franchise business plan can be a daunting task, but it is an essential step in the process of starting or growing a franchise business. By taking the time to carefully craft a well-written plan, you can increase your chances of success and achieve your business goals.

Sparrow provides a complete franchise business plan

Basics of Franchising at Sparrow Franchising

At Sparrow Franchising, we not only know the importance of this part of franchising, we love doing it. That’s not the case with other franchise consultants or experts. In short, Sparrow provides all the materials you need to not only be franchise ready, but to actually sell and open your franchises with new owners. Having this done as one complete service doesn’t just save you time and effort bouncing from one company to the next to get franchised, it is the reason we are the most affordable way for you to franchise .

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While we can be your all-in-one stop for everything you need to franchise, we can also help out case by case with one specific part of the process – such as creating a franchise business plan. Contact us today for a FREE consultation.

The basics of how to franchise

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This is the first stage of the process and an important one. You are learning the basics and making sure your business is even franchisable.

Here are five of the most frequently asked questions with the answers you need to know. We offer a free consultation and no question is off the table.

What is a Franchise?

At its most basic level, franchising is simply a specific form of distribution for goods and services.   But that’s a pretty generic and wholly unhelpful definition. So let's dig a little deeper...

Find out a lot more here >

Why should you Franchise?

With other expansion options available, how do you know if franchising is the right way to expand your business?

Alternatives to Franchising

There are other options to expanding your business other than franchising.

Find out about them all here >

Is my business Franchisable?

You have a successful business and you’ve decided you want to franchise it. How do you know if your business would make a good franchise system?

Find out here >

How to Franchise a business

A good franchisor should train, guide and support a franchisee in every aspect of their business. That means a good franchisor’s training and support infrastructure will never stop expanding and evolving. But, when you start, here are the 6 foundational pillars you’ll need to legitimately consider yourself ready to franchise.

Learn the 6 foundational pillars to franchising >

how to make a business plan for franchise

Some other helpful resources

Here’s a few very helpful links that help you understand the path and process of how to franchise a business.

Federal Trade Commission logo link from Sparrow Franchising

This Guide is provided by The Federal Trade Commission, the nation’s consumer protection agency, to help you decide if buying a franchise is right for you. It also explains how to use the disclosure document that franchisors must provide. This is just one of the many documents Sparrow delivers for our clients.

Small Business Administration logo link from Sparrow Franchising

The SBA Franchise Directory contains all franchise and other brands eligible for SBA financial assistance. The Directory will only include business models that are reviewed and found eligible under SBA’s affiliation rules and other eligibility criteria. Another big step in the process that Sparrow delivers for our clients.

Score logo link from Sparrow Franchising

SCORE’s business mentors and tools can help you start, grow, or transition your business to a franchise. While they don’t actually do what we do and can’t actually franchise your business, they can be a great resource for making sure you, and we, do it right. SCORE is available to you no matter where you are in your business lifecycle.

how to make a business plan for franchise

Learn How To Franchise Your Business.

This free, 21-page ebook will guide your through all the recommended and required steps. Think of it as your personal flight plan for franchising your business.

We promise never to pass on your information.

You are one click away towards franchising your business today!

Success! Check your email. Your free ebook is waiting for you there!

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Sample Franchise Business Plan

Growthink.com Franchise Business Plan Template

Writing a business plan is a crucial step in starting a franchise business. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring franchise business owners, having access to a sample franchise business plan can be especially helpful in providing direction and gaining insight into how to draft their own franchise business plan.

Download our Ultimate Franchise Business Plan Template

Having a thorough business plan in place is critical for any successful franchise venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A franchise business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The franchise business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your franchise as Growthink’s Ultimate Franchise Business Plan Template , but it can help you write a franchise business plan of your own.

Example – BrandExpand Ventures

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team.

Welcome to BrandExpand Ventures, our new franchise based in the vibrant community of Louisville, KY. We stand out as a beacon for local businesses by providing high-quality franchise services unmatched in the area. Our offerings are comprehensive, designed to empower our franchisees through the use of our established brand, efficient operating systems, extensive training, and robust marketing support. We also ensure the success of our partners by granting exclusive territories, eliminating internal competition within our network. Our location in Louisville not only reflects our commitment to serving the local community but also positions us strategically to understand and leverage unique market dynamics. With a foundation built on the rich experience of our founder and a commitment to excellence, BrandExpand Ventures is on a path to becoming a leader in the franchise industry.

Since our inception on January 5, 2024, BrandExpand Ventures has achieved significant milestones that underscore our commitment to building a robust and reputable franchise business. These accomplishments include the creation of a distinctive logo that aligns with our brand’s values, the careful selection of our company name to resonate with our mission and target audience, and finding an ideal location in Louisville, KY, to serve our community directly. These steps, though just the beginning, are indicative of our dedication to excellence and set the stage for our future success in the franchise industry.

The franchise industry in the United States is a burgeoning market with an estimated value of over $800 billion, offering diverse opportunities across various sectors. Expected to grow annually by 2-3%, the industry’s expansion is driven by consumer demand for familiar brands and the appeal of franchising as a comparatively lower-risk venture. Recent trends, such as the surge in health and wellness concepts and technology-driven business models, align well with BrandExpand Ventures’ innovative service offerings. Positioned in Louisville, KY, we are primed to tap into the growing demand for unique and customer-centric franchise opportunities, setting a solid foundation for success in this competitive landscape.

Our primary customer base includes local residents of Louisville, KY, seeking reliable services that cater to their daily needs and preferences. BrandExpand Ventures is committed to understanding and meeting the unique requirements of this community. Additionally, we target small and medium-sized businesses within the area, providing specialized services to help them streamline operations and enhance their customer experience. By also catering to tourists and visitors, we aim to create a diverse and sustainable customer base, contributing to our franchise’s growth and the local economy.

Our main competitors include Duck Donuts, known for its customizable donuts, Bruegger’s Bagels, offering fresh, high-quality bagels and breakfast options, and Tee24, a driving range and practice facility for golf enthusiasts. Despite the strengths of these competitors, BrandExpand Ventures distinguishes itself through superior franchise services, innovative business models, and a strong support system for our franchisees. Our strategic location in Louisville, KY, along with our focus on tailoring services to the local market, positions us advantageously to secure a significant market share and outperform our competitors.

BrandExpand Ventures offers a compelling suite of services, including brand name and trademarks, operational systems, training and support, marketing and advertising assistance, and exclusive territories. With competitive pricing for these services, we provide a solid foundation for entrepreneurs to succeed in the franchise industry. Our promotional strategies focus on online marketing, including social media campaigns and email marketing, to engage potential customers effectively. Additionally, local SEO, community events, partnerships, a referral program, and exceptional customer service will play crucial roles in building brand awareness and loyalty in Louisville, KY. These efforts are designed to attract and retain a strong, loyal customer base and ensure long-term success.

To guarantee the success of BrandExpand Ventures, our operational focus includes managing inventory, conducting daily financial transactions, implementing quality control measures, continuous staff training, and utilizing effective marketing strategies. We also prioritize communication with franchise headquarters, monitoring customer feedback, maintaining a welcoming store environment, ensuring compliance with regulations, and optimizing operations through technology. Our upcoming milestones include securing a prime location, obtaining necessary permits, building out the franchise location, developing a local marketing strategy, hiring and training staff, launching our business, establishing operational efficiencies, building a loyal customer base, reaching a significant revenue milestone, and evaluating scalability options.

Leading BrandExpand Ventures is Samuel Adams, our President, who brings a wealth of entrepreneurial experience and a proven track record in the franchise industry. His skills in operations, leadership, and strategic planning are invaluable to guiding our company towards sustained growth and innovation. Under Adams’ direction, BrandExpand Ventures is poised to achieve its mission and set new standards in the franchise sector.

Welcome to BrandExpand Ventures, a new franchise serving the vibrant community of Louisville, KY. As a local franchise business, we pride ourselves on filling the void left by the absence of high-quality local franchise businesses in the area. At BrandExpand Ventures, we’re more than just a name; we’re a partner in your business journey, dedicated to providing unparalleled franchise services that set our clients up for success.

At the core of BrandExpand Ventures are our comprehensive offerings designed to empower our franchisees. Our services cover everything from leveraging our established brand name and trademarks, implementing efficient operating systems and processes, to providing extensive training and support. Furthermore, we understand the importance of a strong market presence, which is why we offer robust marketing and advertising support to ensure our franchisees stand out. Additionally, we grant exclusive territories, ensuring our partners can operate without direct competition from fellow franchisees within the BrandExpand network.

Based in the heart of Louisville, KY, BrandExpand Ventures is strategically positioned to serve and support the local business community. Our roots in Louisville not only allow us to understand the unique market dynamics but also enable us to forge strong connections with the people and other businesses in the area.

Our journey to becoming a leading franchise business is built on a solid foundation. With a founder who brings valuable experience from running a successful franchise business and a commitment to offering superior franchise services compared to our competitors, BrandExpand Ventures is uniquely qualified to succeed. Our understanding of the franchise landscape, combined with our innovative approach to business, positions us as a formidable force in the industry.

Since our establishment on January 5, 2024, as a Sole Proprietorship, BrandExpand Ventures has hit several key milestones. We’ve poured our creativity and business acumen into designing a distinctive logo that embodies our brand’s values and vision. Additionally, developing our company name was a thoughtful process, ensuring it resonates with our mission and appeals to our target audience. Finding an ideal location was another significant achievement, allowing us to set our roots in Louisville, KY, and start serving our community directly. These accomplishments, though just the beginning, mark our commitment to building a robust and reputable franchise business.

The franchise industry in the United States is thriving, with an estimated market size of over $800 billion. This industry encompasses a wide range of sectors, from fast food restaurants to fitness centers to cleaning services, providing opportunities for entrepreneurs to invest in established brands and proven business models.

Market experts project continued growth in the franchise industry, with an expected annual growth rate of around 2-3%. This growth can be attributed to factors such as consumer demand for convenient and familiar brands, as well as the appeal of franchising as a lower-risk option for aspiring business owners. As more Americans seek the independence of business ownership without the uncertainty of starting from scratch, franchises offer a compelling solution.

Recent trends in the franchise industry, such as the increase in health and wellness concepts and the rise of technology-driven business models, bode well for BrandExpand Ventures. With a focus on providing innovative services to customers in Louisville, KY, BrandExpand Ventures is poised to capitalize on the growing demand for unique and customer-centric franchise offerings. By staying ahead of industry trends and delivering exceptional value to their target market, BrandExpand Ventures is well-positioned for success in the competitive franchise landscape.

Below is a description of our target customers and their core needs.

Target Customers

BrandExpand Ventures will target local residents as its primary customer base. These residents are seeking reliable and consistent services that cater to their daily needs and preferences. The focus will be on understanding the local community’s unique requirements and tailoring services to meet these effectively.

In addition to local residents, BrandExpand Ventures will also serve small and medium-sized businesses within the Louisville community. These businesses often look for partnerships and services that can help them streamline operations and enhance their customer experience. By offering specialized services catered to these business needs, BrandExpand Ventures will position itself as an invaluable partner within the local business ecosystem.

Furthermore, BrandExpand Ventures will tailor its offerings to attract tourists and visitors to the area. By providing services that cater to the needs and expectations of those visiting Louisville, the franchise will not only expand its customer base but also contribute to the local economy’s growth. This strategy is expected to create a diverse and sustainable customer base for BrandExpand Ventures.

Customer Needs

BrandExpand Ventures meets the rising demand for high-quality franchise services among residents who seek exceptional experiences. Customers can expect not just standard offerings but an emphasis on excellence that distinguishes BrandExpand from competitors. This commitment to quality ensures that every interaction and service provided exceeds customer expectations, fostering loyalty and satisfaction.

In addition to quality, BrandExpand Ventures understands the importance of personalized service. Each client receives tailored advice and solutions that align with their specific needs and goals. This personal touch not only enhances the customer experience but also builds a strong, trusting relationship between the brand and its clientele.

BrandExpand Ventures also recognizes the need for innovation in the franchise industry. Customers can access the latest trends and opportunities, ensuring they are always at the forefront of the market. This approach not only attracts forward-thinking entrepreneurs but also secures a competitive edge in a dynamic business environment.

BrandExpand Ventures’s competitors include the following companies:

Duck Donuts is a popular franchise known for its made-to-order donuts. They offer a wide variety of toppings and flavors, allowing customers to customize their donut experience. Price points at Duck Donuts are competitive, with options ranging from single donuts to larger dozen and bucket deals that cater to both individual indulgence and group treats. Duck Donuts has seen substantial growth, with revenues bolstered by both in-store sales and a strong emphasis on catering and special events. The brand operates locations across multiple states, demonstrating a broad geographic service area that appeals to a wide customer segment, including families, young professionals, and students seeking a unique, customizable snack option. Key strengths of Duck Donuts include its customizable product offering and a strong, recognizable brand. However, its reliance on a single product line could be seen as a weakness, limiting its appeal to a broader audience seeking more diverse menu options.

Bruegger’s Bagels offers a wide variety of bagels, breakfast, and lunch options, including sandwiches, salads, and soups. Their price points are designed to appeal to customers looking for a quick, affordable meal without compromising on quality. Bruegger’s has built a reputation for offering fresh, high-quality bagels baked in-store daily, which has become a significant revenue driver. The company operates numerous locations across the United States, serving a diverse customer segment that includes busy professionals, students, and families looking for a quick-service breakfast or lunch option. Bruegger’s Bagels serves multiple geographies, from urban centers to suburban communities, ensuring a broad market reach. Key strengths include a strong focus on product quality and freshness, as well as a diverse menu that appeals to a wide range of dietary preferences. However, Bruegger’s faces the challenge of competing with other fast-casual dining options and the need to continually innovate to keep their menu fresh and appealing to customers.

Tee24 – Driving Range & Practice Facility offers a unique blend of sports and entertainment, providing customers with high-quality golfing practice facilities and driving ranges. Their pricing strategy caters to both casual and serious golfers, with options ranging from single bucket purchases to membership packages that offer unlimited access. Revenues at Tee24 are driven by a combination of service fees, memberships, and sales from its pro shop, which offers golfing equipment and apparel. The facility is strategically located to attract customers from a wide geographic area, including Louisville, KY, and surrounding regions. The customer segment includes golf enthusiasts of all skill levels, from beginners to advanced players, as well as families and corporate groups seeking recreational activities. Tee24’s key strengths lie in its high-quality facilities and the ability to offer a year-round golfing experience, regardless of weather conditions. However, its key weakness could be the niche market it serves, limiting its appeal to non-golfers and those with no interest in the sport.

Competitive Advantages

As a leading business in the franchise industry, our approach at BrandExpand Ventures sets us apart from the competition. We pride ourselves on offering superior franchise services, a claim that is backed by our commitment to innovation, customer satisfaction, and an unmatched support system for our franchisees. Our unique business model is designed to foster growth and success for both our brand and the entrepreneurs we partner with. By focusing on comprehensive training programs, ongoing support, and leveraging the latest technology, we ensure that our franchisees have all the tools they need to thrive. This dedication to excellence not only enhances our competitiveness but also establishes a strong foundation for our franchisees to build upon.

Moreover, our strategic location in the heart of Louisville, KY, provides us with a distinct competitive advantage. The vibrant local economy and supportive community atmosphere create an ideal environment for franchise businesses to prosper. We capitalize on these local dynamics by tailoring our services and offerings to meet the specific needs of the Louisville market, enabling us to connect more effectively with customers and secure a significant market share. Additionally, our focus on innovation extends to marketing strategies and customer engagement, ensuring that we stay ahead of industry trends and continue to offer value that exceeds expectations. This forward-thinking approach positions BrandExpand Ventures as a leader in the franchise sector, ready to empower entrepreneurs and bring exceptional services to our community.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

BrandExpand Ventures emerges as a dynamic player in the franchise industry, offering a comprehensive suite of services designed to empower entrepreneurs and businesses aiming for expansion. At the heart of its offerings is the provision of Brand Name and Trademarks, a critical asset for businesses seeking to establish a strong market presence. Clients can expect to invest an average of $5,000 for the rights to operate under the BrandExpand Ventures umbrella, gaining instant recognition and credibility in their market.

Another cornerstone service is the development and sharing of Operating Systems and Processes. This service is tailored to streamline business operations, ensuring efficiency and consistency across the board. For an average price of $2,500, clients gain access to a proven framework for managing their day-to-day operations, significantly reducing the learning curve and operational risks associated with new business ventures.

Understanding the importance of human capital in the success of any franchise, BrandExpand Ventures places a high emphasis on Training and Support. For an average cost of $3,000, franchisees receive in-depth training programs covering all aspects of the business, from operational to customer service excellence. This is complemented by ongoing support to ensure franchisees can navigate challenges and capitalize on opportunities effectively.

Marketing and Advertising Support is another critical service offered, designed to help franchises attract and retain customers. With an average investment of $4,000, clients benefit from expertly crafted marketing strategies and materials, ensuring their business stands out in a competitive marketplace. This support extends to both digital and traditional advertising channels, maximizing reach and impact.

Finally, Exclusive Territories are a valuable asset offered by BrandExpand Ventures, ensuring franchisees can operate without direct competition from the same brand within a designated area. This exclusivity is available for an average price of $10,000, providing a clear path to market dominance in their local area.

In summary, BrandExpand Ventures presents a compelling value proposition for entrepreneurs looking to leverage the power of franchising. With a focus on brand strength, operational excellence, comprehensive training, marketing support, and territorial exclusivity, it offers a solid foundation for business success. Each of these services is priced competitively, ensuring clients can access the tools and resources needed to thrive in today’s dynamic business environment.

Promotions Plan

BrandExpand Ventures embarks on a strategic promotional journey to captivate and engage customers in Louisville, KY. The cornerstone of their promotional efforts lies in leveraging online marketing, a powerful tool that ensures widespread visibility and engagement. Through meticulously crafted social media campaigns, BrandExpand Ventures will reach potential customers on platforms where they spend a considerable amount of their time. Engaging content, paired with targeted ads, will drive traffic to their website and physical locations, effectively converting online interest into real-world patronage.

Moreover, BrandExpand Ventures will harness the power of email marketing. By building a robust email list, they will keep their audience informed and engaged with regular updates, exclusive offers, and valuable content tailored to their interests and needs. This direct line of communication will foster a sense of community and loyalty among their customer base.

Understanding the significant impact of local SEO, BrandExpand Ventures will optimize their online presence to ensure they appear at the top of search results when potential customers in Louisville search for relevant services. This will not only increase visibility but also drive higher quality traffic to their website, significantly enhancing the likelihood of conversion.

In addition to online marketing efforts, BrandExpand Ventures will engage in community events and partnerships. Participating in local events, sponsoring community activities, and collaborating with other local businesses will build brand awareness and establish a strong, positive presence within the community. This approach not only attracts new customers but also reinforces loyalty among existing ones.

To complement these efforts, BrandExpand Ventures will implement a referral program. Encouraging satisfied customers to refer friends and family by offering them incentives will create a powerful word-of-mouth marketing channel that can significantly amplify their reach and credibility.

Lastly, exceptional customer service will be a pivotal promotional method. By ensuring that every customer interaction is positive, BrandExpand Ventures will foster an environment where customers feel valued and appreciated. This will not only encourage repeat business but will also lead to positive reviews and recommendations, further enhancing their reputation and appeal.

In conclusion, BrandExpand Ventures will utilize a comprehensive blend of online marketing, community engagement, referral programs, and outstanding customer service to attract and retain customers in Louisville, KY. These strategic promotional efforts will establish a strong, loyal customer base and set the stage for long-term success.

Our Operations Plan details:

  • The key day-to-day processes that our business performs to serve our customers
  • The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of BrandExpand Ventures, there are several key day-to-day operational processes that we will perform.

  • Monitor and manage inventory levels to ensure that we always have the necessary products in stock to meet customer demand without overstocking.
  • Conduct daily financial transactions accurately, including processing sales, managing expenses, and ensuring all financial activities are recorded for future analysis and tax purposes.
  • Implement stringent quality control measures to ensure that all products and services meet the high standards our customers expect from us.
  • Engage in continuous staff training and development to ensure our team members are knowledgeable, efficient, and capable of delivering exceptional customer service.
  • Utilize effective marketing strategies to attract new customers and retain existing ones, including social media marketing, email campaigns, and local advertising.
  • Regularly communicate with the franchise headquarters to stay updated on any changes in operational procedures, marketing strategies, or product offerings.
  • Monitor customer feedback through various channels, such as online reviews and in-person comments, to identify areas for improvement and implement changes accordingly.
  • Maintain a clean and welcoming store environment that encourages customers to return.
  • Ensure compliance with all local, state, and federal regulations that affect our operations, including health and safety standards.
  • Optimize operational processes through the use of technology, such as inventory management software and customer relationship management (CRM) systems, to increase efficiency and reduce errors.

BrandExpand Ventures expects to complete the following milestones in the coming months in order to ensure its success:

  • Secure a prime location in Louisville, KY : Identifying and securing a lease or purchase for a prime location that is accessible and appealing to our target market. This also involves ensuring the site matches our brand’s image and operational needs.
  • Obtain necessary permits and licenses : Completing all legal requirements including health, safety, and business operation permits. This also includes any specific franchise operation licenses that are necessary to legally operate in Louisville, KY.
  • Build out and customize the franchise location : Conducting renovations and outfitting the franchise location to meet BrandExpand’s brand standards and operational requirements. This includes both the customer-facing areas and the back-end operational spaces.
  • Develop and implement a local marketing strategy : Crafting a marketing plan that includes pre-launch buzz, grand opening promotions, and ongoing marketing efforts to build brand awareness and attract customers in the Louisville area.
  • Hire and train staff : Recruiting a team that aligns with the brand’s culture and values, and providing comprehensive training to ensure high levels of service and operational efficiency from day one.
  • Launch our franchise business : Officially opening the doors to customers with a well-publicized grand opening event. This marks the transition from the planning and preparation phase to operational business.
  • Establish operational efficiencies : Fine-tuning operations to manage costs effectively, ensuring a smooth customer experience, and maintaining quality control across all aspects of the business.
  • Build a loyal customer base : Implementing customer relationship management (CRM) strategies to retain customers, encourage repeat business, and generate positive word-of-mouth.
  • Get to $15,000/month in revenue : Achieving this revenue milestone to prove the business model’s viability in the local market and setting the stage for further growth and possibly future expansion.
  • Evaluate and plan for scalability : Assessing the business’s performance and potential for scaling up operations or opening additional locations in Louisville, KY, or beyond, based on demand, operational capacity, and financial health.

BrandExpand Ventures management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Samuel Adams, President

With a robust track record of entrepreneurial success, Samuel Adams brings a wealth of experience to BrandExpand Ventures as its President. Adams has previously demonstrated his business acumen by efficiently running a franchise business, where he honed his skills in operations, leadership, and strategic planning. His expertise in scaling businesses and driving operational excellence makes him an invaluable asset to BrandExpand Ventures. Adams’ proven ability to lead businesses to success positions him as a cornerstone of the management team, guiding the company towards achieving its mission of sustainable growth and innovation.

Financial Plan

BrandExpand Ventures requires $297,000 in funding to achieve our growth objectives. This funding will be allocated towards capital investments such as location buildout, furniture, equipment, and technology, as well as non-capital investments including working capital, initial rent, staff salaries, marketing, supplies, and insurance. With this financial plan in place, we are confident in our ability to reach our goals and establish a successful franchise in Louisville, KY.

Financial Statements

Balance sheet.

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Income Statement

[insert income statement]

Cash Flow Statement

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Franchise Business Plan Example PDF

Download our Franchise Business Plan PDF here. This is a free franchise business plan example to help you get started on your own franchise plan.  

How to Finish Your Franchise Business Plan in 1 Day!

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Home > Blog > 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.

a group of colleagues creating a business plan

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.
  • Franchise Marketing Plan Download
  • 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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Franchising - main terms you must know.

Confused by the very specific terminology that’s used with regard to franchising? Don’t worry, we’re here to help you! Below, you’ll find the answers to frequently asked questions such as “what does franchising mean?”, and so many others.

Is my Business Suitable for Franchising?

“Can I franchise my business?’ is an important question that many business owners ask themselves when they experience success with their current enterprise. Franchising your business can be an excellent way of expanding your operations and building onto your existing success as you seek new locations across the country to develop and grow. Wondering why … Continued

Should You Use a Franchise Consultant

An Introduction to Franchise Consulting Services It doesn’t matter whether you’re a new or established franchisor or even a prospective franchisee – you can make use of professional franchise consulting services. But what does a franchise consultant do? Table of contents: How You’ll Benefit If You’re a Franchisor How You’ll Benefit If You’re a Franchisee … Continued

5 Factors That Make a Franchise Successful

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How to Create a Franchise Business Plan

What Should a Franchise Business Plan Include?

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 make a business plan for franchise

How to create a franchise business plan

how to make a business plan for franchise

If you’re considering the purchase of a franchise, you’re probably exploring financing options. And an essential part of that process is the preparation of a franchise business plan. It’s likely the first thing a lender will ask you for. Take note that even if you’re not seeking outside funding, developing a plan is worthwhile. Here’s a look at what’s involved.

Readily available information and data

Preparing a franchise business plan is a lot easier than preparing a plan for an independent startup business. This is because you have easy access to much of the necessary information. During the sales process, the franchisor typically provides a great deal of verbiage you can use for the narrative sections of the plan. And you can find much of the required financial information in the earnings section of the Franchise Disclosure Document (FDD) .

In addition to the typical sections in any business plan, a franchise business plan will include a section outlining the track record of and support available from the franchise company. You may include items like the franchise company’s sales brochure or FDD as attachments to your plan. This additional information can give lenders a higher degree of confidence in your likelihood of success.

5 sections of the business plan

The format of a typical business plan, whether it’s for an independent business or franchise, usually includes the following 5 sections:

Introduction

This describes the business, including the products or services the business offers, the size and competitive aspect of the market, the operational approach that will be used, and the challenges and risks associated with start-up.

Management section

This section identifies and provides background information about the people in management roles. It might include their resumes or descriptions of relevant prior experience.  A franchise business plan also provides information about the franchisor’s direct support staff.

Marketing section

Here you define your target customers and how you plan to attract them to your business. This section explains the business’s competitive advantages and details marketing and advertising plans.

Pro forma financial projections

This section includes income statements, cash flow statements, and balance sheets that project the anticipated financial performance of the business. The statements should specify all material assumptions used to prepare the projections. Prepare these projections on a very conservative basis in case unexpected delays or challenges arise.

Financing needs

Even if you are self-funding the business, always prepare a section related to financing needs. This should include an analysis of all startup costs, including working capital to cover initial marketing plans and operating losses until you reach the projected break-even point. Even if you’re not borrowing from an outside source, the process of developing this section will prepare you for what’s to come in starting up the business.

You should be able to find much of the information you’ll need for the Introduction and Marketing sections on the franchisor’s website. The FDD will help you complete the Financing Needs portion of the report and, if the franchisor publishes a representation of earnings in Item 19 of the FDD , you may be well on your way to completing the Financial Projections section as well.

A helpful and worthwhile process

Some franchise companies require prospective franchisees to start and/or complete their franchise business plan prior to being approved. In any event, it’s a good idea to start thinking about your business plan early on. The process of preparing the plan is helpful in many ways. It forces you to consider options and formalize your projected course of action in the new business. You’ll typically identify questions during this process that may not have otherwise occurred to you. Contact the franchise company to get answers and make sure you have a clear understanding of the franchise prior to making a final decision to proceed.

Remember to update and finalize your business plan after completing the franchisor’s initial training. After training, you’ll have a far greater understanding of aspects like operational and marketing plans for the business. Most franchisors will also provide financial data that you can use to double-check, or even replace, the Financial Projections section of your business plan. Review your entire business plan based on your new knowledge, and you’ll be as prepared as possible to get your new franchise business up and running.

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How to Write a Business Plan for Your Franchise

  • September 2, 2022
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Katie Fleming

Katie Fleming

Co-founder and COO of Owner Actions

A person uses a laptop computer to write a business plan for running a franchise.

  • 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.

how to make a business plan for franchise

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.

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JUST RELEASED: View the 2024 Franchise 500 Ranking

Which Franchise Model Is Right for You? Here's How to Choose There are thousands of brands and concepts, but franchises generally fall under two business models: "brick-and-mortar" and "service-based." Which is the best choice for you?

By David Busker • Feb 13, 2024

Key Takeaways

  • If you're ready to buy a franchise, there are two business models to consider: brick-and-mortar and service-based. Deciding between the two may be hard, but it doesn't have to be.
  • The investment cost, potential for scalability, location and three other components below will help you decide which one you should choose.

Opinions expressed by Entrepreneur contributors are their own.

A major decision potential business owners must make when considering a franchise is determining what type of business they should run. There are thousands of brands and concepts, but franchises generally fall under two business models: "brick-and-mortar" and " service-based ."

Think about a franchise you know. Any franchise. Possibly one that offers services that you use consistently. Is it a hair salon? A fitness studio? A lawn care company? Maybe a moving service?

All of these are franchises, but in terms of a business model, the hair salon and fitness studio fall under one umbrella — location-based businesses with retail storefronts where the customer receives the service at a fixed-base location. Meanwhile, the lawn care company and moving service fall under another umbrella — service-based brands — which do not have a storefront or customer-facing real estate and the service is provided at the customer's location.

Here are some of the key differences between brick-and-mortar and service-based businesses, as well as the criteria to build one, so you are more informed when choosing a franchise model.

Related: 7 Essential Questions to Ask Yourself Before Starting a Franchise

1. Investment cost

Real estate is what usually drives franchising investment costs . The more real estate intensive, the greater the investment level. Location-based, brick-and-mortar franchises generally have higher initial investments. Building the retail space can be pricey. Picture a fitness studio — you need equipment, like bikes or pilates machines, but also a high-tech sound system, televisions, changing rooms, showers, etc. Not to mention the flooring, interior architecture (walls, stage, various rooms), trade dress and more.

On the other hand, a service-based brand doesn't necessarily require real estate (some may even operate from a home office). Some service-based brands require storage space to house vehicles or equipment that are deployed at the customer's location. Less visible and lower-cost industrial spaces are ideal for these franchises. Typically, these spaces require few leasehold improvements compared to a customer-facing retail space.

So what can you expect the investment costs to be for each of these options for a single unit or territory?

Although it isn't definitive (there are always exceptions), common ranges are:

  • Brick-and-mortar: $250,000+
  • Service-based brands: under $300,000

2. Ramp-up time

Ramp-up time goes hand-in-hand with investment costs. The time it takes to ramp up to a monthly positive cash flow and establish repeat business both indicate important benchmarks for any sustainable business. In terms of speed, service-based brands are more likely to ramp up quickly because of a lower investment cost upfront and lower fixed overhead costs . Let's consider a moving service brand. Once you have the equipment and employees in place, the month-over-month operation costs are more closely linked to revenue growth; thus, these models can often grow to cash flow more quickly.

Alternatively, a brick-and-mortar brand (like a salon) will have high upfront investment costs (retail space, individual stations, chairs, mirrors, hair wash/dry stations, etc.) and will likely take time to establish a strong customer base in a particular community. However, they tend to have more repeat business and durable income streams over time.

Related: The Rise of Click and Mortar — Why Online Businesses Should Consider Opening a Physical Store

3. Scalability

Brick-and-mortar businesses are typically more scalable . Once you have a single successful franchise, it's easier to manage and build an empire by spreading costs over multiple locations. But remember, due to the costly initial investments, building costs will be similar each time you open a new location.

With a service-based brand, rather than building more physical locations to expand, you can expand your territory and drive more penetration within your territories. While this isn't without additional costs (consider gas money, employees to keep up with demand, more frequent equipment maintenance, etc.), it requires incremental investments since your revenue justifies it and creates economies of scale. By purchasing additional territories in a service-based brand, you scale your revenue and income multiplier without the same proportional increase in capital investment.

4. Technology

One area that is relatively equal in terms of usefulness and accessibility is technology. In recent years, technology has transformed the franchise world . Specifically, repeatable but necessary tasks have been streamlined and simplified through technology. For brick-and-mortar brands, it's common to see customers scheduling services directly (hair appointments, fitness class bookings, etc.). For service-based brands, customers can book service calls, and employees can perform tasks in real-time to keep business moving, such as ordering parts, creating estimates, etc.

5. Location risk

Location is key for brick-and-mortar franchise brands. It's often a balancing act of finding real estate that is within an acceptable price range and in a popular location that creates consistent repeat business. You will be offering services in a fixed location, so the further away you are from the customer, the less likely the customer will travel to your location. For example, a fitness studio needs to be convenient for customers to come to your location three to four times per week. The more frequently a customer would ideally like to visit your franchise, the higher density is needed for the same market radius.

For a service-based brand, location is not as important for overall success. Since you or your employees will be traveling to the customer's location, there is no site selection risk, and you are free to penetrate deeper and deeper into a market. However, it is worth noting that if you do expand to multiple territories, you may want to consider renting additional warehouse or storage space to optimize efficiency.

Related: Start Your Own Business or Buy a Franchise: Which Is Right For You?

6. Recession resistance

Lastly, one factor to consider lies in the recession resistance of your franchise. Brick-and-mortar brands often offer more discretionary services. These are everyday services, to be sure — hair care, nail salon, etc. — but they are not always considered everyday essential services. On the other hand, service-based brands often are essential everyday services that must be performed despite fluctuating market trends — think HVAC, plumbing, yard care or restoration.

At the end of the day, there is no one-size-fits-all franchise for every potential franchisee. But by understanding the basics of these umbrella categories, you can start to consider which business model type matches most closely with your business goals.

Entrepreneur Leadership Network® Contributor

Founder & Principal of FranchiseVision

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  1. 9+ Franchise Business Plan Examples

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  4. 9+ Franchise Business Plan Examples

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    how to make a business plan for franchise

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  1. BUSINESS PLAN PRESENTATION //Business plan presentation discussion //How to make business plan

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COMMENTS

  1. How To Start A Franchise In 8 Steps (2024 Guide)

    How To Start a Franchise in 8 Steps Frequently Asked Questions Starting a franchise business is similar to starting your own business from the ground up. As a franchisee, you have built-in...

  2. How to Write a Business Plan for Your Franchise

    By Clarissa Buch Zilberman • May 8, 2023 You're set on becoming a franchisee. You may think it's time to call a franchisor, tell them you're interested, and get funding from your local bank, right?...

  3. How to Start a Franchise: A 12-Step Guide

    1. List your top companies or businesses When putting together a list of franchises you'd like to own, start by thinking about your favorite businesses. Consider your strengths, weaknesses and passions against what you think could make you money. Franchises are available in nearly every industry: Business services Convenience stores Restaurant

  4. Creating a Franchise Business Plan

    The BizBuySell Team Starting a franchise is exciting. But, you may be asking, where does one begin? As with any significant undertaking, one of the most significant first steps is drafting a comprehensive plan. A detailed franchise business plan not only sets the course for the business, but can often be essential in obtaining financing.

  5. How to Write a Franchise Business Plan + Template

    How to write a business plan for your franchise 1. Understand your franchise business model Since the franchisor has already established the company's business model, your business plan should focus on how you can adapt it to be successful in your chosen location.

  6. Franchise Business Plan Template

    How To Write a Franchise Business Plan & Sample Below is are links to each section of a franchise business plan example to help you start your own franchise business: Executive Summary - This section provides a high-level overview of your business plan.

  7. Creating a Business Plan for Your Franchise: What to Prepare Before

    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).

  8. Writing A Franchise Business Plan: Ten Key Elements To Consider

    Writing a franchise business plan getty "Without a plan, even the most brilliant business can get lost. You need to have goals, create milestones and have a strategy in place to set...

  9. Franchise Business Plan Template [Updated 2025]

    Franchise Business Plan Template. If you want to start a franchise business or expand your current one, you need a business plan. Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their franchise businesses.

  10. How to Build a Comprehensive Franchise Business Plan

    A franchise business plan isn't just a dedication to everyone who might invest in your vision. It's also an opportunity to tighten your own intentions. Your SWOT analysis will serve you more than it does your funders, but it's integral to your competitive edge. It should include your brand's strengths, weaknesses, opportunities, and ...

  11. How to Create a Franchise Business Plan

    1. Executive Summary The Executive Summary portion of your franchise business plan should describe your business's purpose and goals. Begin with a short description of your product or service and list your objectives. How are you fulfilling a hole within the marketplace? What is the growth potential?

  12. Franchise Business Plan: Use The 7 Key Elements

    Develop a marketing strategy. Outline the tactics you'll use in your business plan to reach your target audience and achieve your marketing goals. This might include digital marketing, social media advertising, email marketing, content marketing, or other tactics. 4. Create a sales strategy.

  13. How To Create A Franchise Business Plan

    A franchise business plan is a written document that outlines your business goals, strategies, and financial projections. It is an essential tool for any franchisee, as it can help you secure funding, attract investors, and make informed decisions about your business.

  14. Sample Franchise Business Plan

    Market experts project continued growth in the franchise industry, with an expected annual growth rate of around 2-3%. This growth can be attributed to factors such as consumer demand for convenient and familiar brands, as well as the appeal of franchising as a lower-risk option for aspiring business owners.

  15. Writing the Franchise Business Plan

    The process of actually creating a business plan will force you to consider options and formalize your projected course of action in the new business. You'll typically identify a number of ...

  16. How to Create a Franchise Business Plan

    July 11, 2023 Becoming a franchise owner could potentially put you in a position to make a lot of money each year. The average franchise owner makes about $80,000 per year . And you'll have the opportunity to make even more than that if you play your cards right.

  17. How To Write A Business Plan (2024 Guide)

    Describe Your Services or Products. 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 ...

  18. How Do I Create a Franchise Business Plan?

    The first section of your franchise business plan should be your executive summary. This section is simply a bird's-eye view of the rest of the document, offering a summary of your business plan and a few key statistics and data points. The goal is to create a brief summary that prospective lenders and other business associates can quickly ...

  19. How to Write a Franchise Business Plan

    How to create a 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.

  20. How Do I Write a Business Plan for a Franchise?

    Executive Summary: Describe the franchise's model and list successes that it has achieved. For example, you might include how locations have exceeded $1 million in average gross sales when writing a plan for Nékter Juice Bar. Company Overview: Give details about the company's past performance and future plans.

  21. How to Create a Franchise Business Plan

    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.

  22. How to create a franchise business plan

    Contact the franchise company to get answers and make sure you have a clear understanding of the franchise prior to making a final decision to proceed. Remember to update and finalize your business plan after completing the franchisor's initial training. After training, you'll have a far greater understanding of aspects like operational and ...

  23. How to Write a Business Plan for Your Franchise

    Create a section titled Executive Summary and write a one-page summary of your business and your plan for its success. You may choose to structure it in the following way: Explain the history of the business. Describe the market the business serves and the challenges it faces. Explain how your skills can lend to the business's success.

  24. Do Franchises Have Business Plans?

    By Franchise InformationMarch 16, 2023. Yes, franchises do have business plans. In fact, franchisors often require franchisees to develop a business plan during the application process. As Yogi Berra, the legendary baseball player, famously remarked: "If you don't know where you're going, you'll end up someplace else.".

  25. Write your business plan

    Content Business plans help you run your business A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business.

  26. Which Franchise Model Is Right for You? Here's How to Choose

    Service-based brands: under $300,000. 2. Ramp-up time. Ramp-up time goes hand-in-hand with investment costs. The time it takes to ramp up to a monthly positive cash flow and establish repeat ...

  27. Business Plan: What It Is + How to Write One

    1. Executive summary. This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the ...