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

🕒 Estimated Reading Time: ~8 minutes

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

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

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

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

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

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

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

As time passes and you move further into franchise ownership, the business plan you’ve created should be updated and utilized as a guide in helping you reach your franchise goals.

Parts of a Business Plan

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

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

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

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

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

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

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

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

Market analysis: Use this section to prove to the potential lender that you are not jumping into a business venture on a whim. Concentrate on the specific area (market) in which the franchised business will be located. The territory description in the FDD (Item 12) will help you to a point.

Give a brief discussion of the following:

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

Management structure: This section provides a look at the people who will be responsible for the day-to-day operation of the franchise, particularly you as the owner. Is this venture going to be a sole proprietorship or will there be multiple owners? Explain if you will be involved day-to-day with business operations, or will be acting as an absentee owner.

For yourself and all of the others with an ownership stake, if applicable, detail all business qualifications. Stress any and all experience (even if volunteer) that is relevant to being successful in the future with the franchise operation. Item 15 of the FDD will help with explaining the managerial obligations of the franchisee.

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

Financials: This is the meat of your business plan. In this section, don’t only ask for the money you need. Give the lender the big picture of your financial situation as well. Detail how you are going to obtain the entire initial investment. Often times, a lender will not be financing all of the franchise investment. Are you using a mix of personal savings, loans, credit, etc.?

In addition to the funding request, you will be doing some financial projection. Give a reasonable time frame when the lender can expect full repayment of the loan, and back up that claim with figures. Include graphs and charts detailing the start-up costs, projected profit and loss and projected sales forecast for the franchise.

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

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

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

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

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

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

Sample Business Plan Confidentiality Agreement Template

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

Sample Business Plan

Suggested reading:

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

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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

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

How to Write a Franchise Business Plan

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

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

Table of contents:

What is a franchise business plan?

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

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

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

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

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

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

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

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

Here are some of them:

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

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

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

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

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

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

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

These may include:

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

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

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

Free Business Plan Template

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

• Fill in the blanks – Outline
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How to Write a Franchise Business plan?

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

1. Executive Summary

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

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

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

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2. Business Overview

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

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

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

3. Market Analysis

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

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

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

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

4. Products And Services

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

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

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

5. Sales And Marketing Strategies

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

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

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

6. Operations Plan

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

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

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

7. Management Team

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

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

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

8. Financial Plan

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

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

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

9. Appendix

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

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

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

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

Fill-in-the-blanks and automatic financials make it easy.

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

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

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Frequently asked questions, why do you need a franchise business plan.

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

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

How to get funding for your franchise business?

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

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

Where to find business plan writers for your franchise business?

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

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

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

About the Author

Upmetrics Team

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

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Franchise Business Plan: How to Effectively Write One

You’ve probably heard the saying, “If you fail to plan, you plan to fail.” If you are thinking about entering the world of franchising, you first need to craft a solid business plan.

A business plan is a formal written document that outlines your goals and describes how you plan to achieve them, while allowing for potential challenges you may encounter. In other words, your business plan acts as a GPS for your entrepreneurial journey, helping you anticipate roadblocks and detours as you move forward toward your destination.

How is a Franchise Plan Different?

A franchise business plan incorporates elements specific to the franchise model. This includes details about franchise fees, royalty payments, marketing and advertising support from the franchisor, training and operational guidelines provided by the franchisor, and the rights and obligations of both the franchisee and franchisor. Additionally, the franchise plan often references the franchisor’s track record, brand recognition, and established business model, leveraging these as strengths in the plan.

When Should I Write My Franchise Business Plan?

Once you’ve done your research and decided which franchise opportunity you’ve going to pursue, it’s time to write your plan. It’s important to have the plan in place before you sign the franchise agreement. At this stage in the game, a well-crafted plan shows the franchisor that you understand the business and are committed to operating the franchise successfully. If you intend to seek financing to buy your franchise, lenders will want to see the plan to assure them of your profit potential. Your plan needs to include the amount you want to borrow, how you’ll use the funds, and the preferred terms of the loans.

How to Craft an Effective Franchise Business Plan

Here are the elements you should include in your plan:

• Executive summary: Begin with a concise overview of your franchise, including the business concept, financial features, and what sets your franchise apart.
• Business description: Delve deeper into the specifics of the franchise. What services or products will you offer? Who’s your target market?
• Market analysis: Research your industry, market size, and local competition. Understand the trends and growth patterns in your sector.
• Management structure: Detail the organizational structure. Who will manage daily operations? How many employees do you plan to hire?
• Marketing and sales strategies: How will you attract and retain customers? Outline your advertising, promotions, and sales tactics.
• Financial projections: Provide a forecast for the next three to five years. Include projected income statements, balance sheets, cash flow statements, and capital expenditure budgets.

The U.S. Small Business Administration  has a more detailed list of items you might want to consider including in your business plan.

How Franchisors Can Help

Established franchisors can be an invaluable asset when it comes to writing your business plan. You can use them as a resource for data on market trends, customer demographics, and historical financial performance of existing franchise units. The franchisor may even provide you with a plan template tailored to their specific business model.  However, it’s essential to remember that while a franchisor can provide guidance, customizing the plan to your specific location, market conditions, and personal goals is your responsibility.

Franchising with Home Franchise Concepts

In business for more than thirty years, Home Franchise Concepts knows the importance of a robust business plan and can guide you through the intricacies of creating one for any or our ten premier home services brands: Presently, Budget Blinds®, The Tailored Closet®, PremierGarage®, Concrete Craft®, AdvantaClean®, Kitchen Tune-Up®, Bath Tune-Up®, Two Maids®, Aussie Pet Mobile®, and Lightspeed Restoration™

We understand that many potential franchisees are new to the world of business, so we are happy to answer your questions about how to become a franchise owner .

Contact Home Franchise Concepts Today

Writing a business plan might seem daunting, but with the right support, it becomes a rewarding process. And with a partner like Home Franchise Concepts by your side, you’re equipped with the tools and insights to create a plan that not only impresses lenders but also sets you on a path to achieve your entrepreneurial dreams. To get started, simply contact Home Franchise Concepts today.

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How To Create A Franchise Business Plan

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

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

Table of Contents

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

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

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

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

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

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

Source: Photo by iStockphoto

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

Executive Summary :

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

Business Description :

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

Franchise Model :

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

Market Analysis :

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

SWOT Analysis :

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

Franchisee Requirements :

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

Training and Support :

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

Marketing and Sales Strategy :

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

Financial Projections :

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

Legal Structure and Agreements :

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

Risk Analysis :

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

Operational Plan :

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

Exit Strategy :

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

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

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

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

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

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

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

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

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

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

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

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

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

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Creating a business plan for your franchise

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

Related: Franchise development—what you need to know

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

Creating your franchise business plan

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

Business description

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

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

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

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

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

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

Financial projections

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

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

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

Getting to work

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

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

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Franchise Business Plan Template

Whether you want to start your own franchise business or expand an existing one, you need a business plan. the following franchise business plan template lets you know what elements you need to include in a successful franchise business plan., fill the form to download business plan templates.

To ensure your franchise business success in this highly competitive market, you need a properly structured franchise business plan. With over 12 years of experience, we have helped over 5,000 entrepreneurs create business plans to start and grow their franchise businesses. Using the following franchise business plan template, you can put together an effective business plan.

Things to Know Before Writing a Franchise Business Plan

The franchise business industry has two primary agents; franchisor and franchisee. A franchisor is the business system/brand owner, and a franchisee is an entity that rents the business system/brand name against a fixed initial fee and royalty. 

A franchise business plan is popular in many industries. Popular franchise systems are fast food chains like McDonald’s, KFC, Subway, etc. You can find a franchise opportunities in many industries. 

A franchisee operates a business location under the guidelines of the franchisor. You have little freedom to experiment with new things. 

The FDD, or Franchise Disclosure Document, is the legal contract between a franchisor and a franchisee. FDD has details of the rights and responsibilities of the two parties. This is generally a lengthy document. You need to understand it before you buy a franchise. 

The franchise industry is growing fast. As International Franchise Association (IFA) reports, 2022 is the year of opportunity for franchises. 

The estimated number of total franchises in 2021 was 774,965 with a total number of employees at 8,192,600, and an output of $787.7 billion. 

The total GDP size of the franchise economy in 2021 was $474.2 billion. The growth projections for franchises in 2022 stand at 2.2%. 

These are the top industries with the most number of franchises. 

• Quick Service Restaurants (188,402 franchises)
• Retail Food, Products, and Services (162,579 franchises)
• Personal Services (114,012 franchises)
• Business Services (99,296 franchises)
• Commercial & Residential Services (75,678 franchises)

Key Success Factors for Franchise Business

A franchise business has different dynamics as you are selling an established brand to a market with a demand for that brand’s products or services. 

We have identified these five factors that play a crucial role in making a franchise successful. 

• A Loyal Customer Base for the franchisor brand makes sure you’ll have enough demand to successfully run your franchise business 
• A Clear Market Position . This means that you are selling products where there is a need and where the brand fulfills that need. 
• Franchisor Business Operating Expertise : When a franchisor has business expertise, chances are they will better lead the industry and develop the market for the brand 
• Established Brand Name : Running a McDonald’s franchise is far more profiting than a Huddle House
• Ability to Control Stock: When franchisees can control stock locally, they can meet increased demand, control costs, and reduce waste. 

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What is a Franchise Business Plan?

A franchise business plan is a roadmap for starting and growing your franchise business. Your business plan outlines your business concept, identifies your target customers, presents your marketing strategy, and details your financial projections.

Any bank or investor you approach will require a franchise business plan, so putting one together will be critical to securing funding.

In short, writing a business plan can help you succeed if you’re thinking of starting a franchise business or pitching to investors or venture capitalists.

Why You Need a Franchise Business Plan

Franchise business plans can be used to gain interest from potential investors or to secure loans from banks. They are also helpful to you as the owner. A franchise business plan allows you to thoroughly analyze every aspect of your potential business.

A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a franchise business idea, and may help you better understand your company’s finances and competition.

A franchise business with a plan grows 30% faster than the rest. On the other side, if we look at the fast-growing companies, 71% of them have a business plan .

A franchise business plan is a living document that should be updated annually as your company grows and changes.

Free: Franchise Business Plan Examples

Do you need help creating a franchise business plan? Check out these six free, proven franchise business plan examples from different industries to help you write your own.

Funding Sources for Franchise Business

Conventional Banks and Credit Unions

You can get a loan from banks, credit unions, or other financial institutions. Getting such a loan for a franchise business depends on many factors including turnover, credit history, and expected revenue of the business. 

SBA regularly offers loans, grants, and lifelines for small businesses. Keep an eye on the 7(a) program that is aimed at small businesses in the early stages. 

Business Partners 

A franchise business is a high investment business. Consider adding business partners to create a money pool big enough for the business needs.

Retirement Funds 

If you have retirement funds available, you can use retirement funds or 401k for starting a franchise. 

Securities-Backed Line of Credit

if you have an investment portfolio, you can get a line of credit against those securities. These securities will serve as loan collateral. 

Equipment, Machinery, and Furniture Lease

You can get franchise machinery, vehicles, computers, furniture, and other equipment at lease. If you get an equipment lease, you may also get a buyout for $1 when the lease term ends. 

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How to Write a Franchise Business Plan

To write a franchise business plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a franchise business plan, or you can just download our proven  sample business plans  to get a better idea.

Free Franchise Business Plan Template in PDF and Word

Download our franchise business plan template in PDF and Word here.

Executive Summary

The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.

It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.

Tell them what kind of franchise business you have and what stage you’re in; for example, are you a startup, do you have a franchise already that you want to expand, or do you have a lot of franchise businesses?

Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.

• Provide a high-level overview of the franchise industry
• The name, location, and mission of your franchise company
• A description of your franchise business, including management, advisors, and a brief history
• Discuss the type of franchise business you are operating, Give an overview of your target customers., and how your company differs from competitors in the industry
• Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
• And give an overview of your financial plan

Check out these executive summary examples to help you write a perfect one for your franchise business plan.

Free: Franchise Business Plan Executive Summary Examples

An executive summary is the most important part of your franchise business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.

Company Analysis

• Company summary: Your company analysis will describe the type of franchise business you are running and its future goals. The type of franchise business you might be focused on  (for example,  Quick Service Restaurants, Retail Food, Products, and Services, Personal Services, Business Services, or Commercial & Residential Services)
• Company history: When and why did you start your franchise business?
• What milestones have you achieved so far? Your milestones could include served 100th customer, new fleet purchase, etc.
• Legal structure and ownership: Do you have S-Corp status? Is it an LLC ? A sole proprietorship ? Describe your legal structure.
• Mission statement: An overview of your franchise company’s guiding principles. Learn how to write a perfect mission statement .

Industry Analysis

The franchise business plan’s research section will most likely be the most time-consuming. Here, you will elaborate on how you will fit into the existing franchise market.

Since your research findings should serve as a sound confirmation of the conclusions you have outlined thus far, they will demonstrate your understanding of the industry and market.

Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.

• Give a quick overview of the franchise industry. Define the franchise business in terms of size (in dollars), historical background, service region, and products.
• Examine previous trends and growth patterns in the franchise industry.
• Identify the market’s major competitors.
• Age, gender, and general lifestyle of the targeted market
• Determine the factors that have an impact on the franchise industry. These might include government regulatory rules and other businesses’ competitive activities.
• Using research data, the industry forecast expected growth over the next five to ten years. Predictions should be made for both the long and short term.
• Describe how your franchise business intends to position itself in the industry. Concentrate on how your franchise business can benefit from opportunities highlighted in the industry.

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Customer Analysis

The first condition for franchise business is to identify its target customers clearly. Different franchise business have different customers. 

The customer analysis section is an important part of any franchise business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how your franchise items will meet those requirements.

Customer analysis may be divided into two parts: psychosocial profiles (why your franchise items suits a customer’s lifestyle) and demographic profiles (descriptions of a customer’s demographic qualities).

With regards to demographics, include information about the ages, genders, locations, and income levels of your customers. When targeting businesses, describe what kind of business, size, and location your target customers have.

The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better you can attract and retain customers. 

Competitor Analysis

It is necessary to do a competitor analysis. Because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:

• Identify the strength and weakness of your franchise business competition.
• Search for opportunities to distinguish your franchise from competitors.

The first step is to determine who your direct and indirect competitors are.

The direct competition consists of other franchise businesses that offer the same goods or services to the same audience. 

Your indirect competitors are other options that customers have to purchase from you that aren’t direct competitors.

Among indirect competitors are the business selling similar product or service. For example, if you have McDonalds’ franchise, someone selling Chinese or Italian food is your indirect competitor. 

Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your franchise business— but keep an eye on the indirect competition as well, just in case.

Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.

You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:

• Prices – Are they offering cheaper products or services than you and other competitors, what value do buyers get for that price?
• Quality – Are they offering premium quality? What is the perceived worth in the eyes of the customers?
• Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
• Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers

The final section of your competitive analysis should include a list of your areas of competitive advantage. For example, how will you offer better value at competitive prices for the target market.

Consider how you will outperform your competitors and include them in this portion of your  franchise business plan.

Free: SWOT Analysis Examples

Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.

Marketing Plan

Creating a marketing plan for a franchise business involves identifying the target demographic and finding the goods and services that suit their preferences.

As part of your marketing plan for a franchise business, you should include:

Pricing and Product Strategy

Your franchise business must offer goods or products that are different from those of your competitors. Research what your competitors offer and how they price their offer. 

Placing and Promotions

Place explains the location you’ll chose for your franchise and the reasons of the selection.

Promoting your franchise business is the final part of your marketing plan. In this step, you document how you will drive customers to purchase your goods or services. A few marketing methods you could consider are:

• Marketing on social media
• Web Marketing
• Organize events
• Local Newspaper and TV ads
• Banners and Bill boards 
• Local Radio Ads 

You should also think about your franchise company’s Unique Selling Proposition (USP), which should explain why clients should choose you over other franchise businesses. Ensure that your USP is reflected in your marketing.

Pro Tips: Learn how to create a marketing plan in a business plan .

Operations Plan

While the previous sections of your franchise business plan described your goals, your operations plan discusses how you will achieve them.

An operations plan section in a business plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.

Your operational plan should be able to answer the following questions:

• Who – Personnel in charge of completing specific tasks.
• What – A breakdown of the responsibilities of each personnel.
• Where – The location of everyday operations.
• When –The deadlines for completing tasks and goals.
• How much – The amount of money required for each department to perform their job.

Your operations plan should be divided into two individual parts, as seen below.

Your daily short-term processes include all the tasks involved in producing goods or services, managing operations, selling, employee management, etc. 

Long-term goals are milestones you hope to reach. they might be growing your business, such as introducing new items or retail outlets, meeting particular sales milestones, and meeting other essential business-oriented goals like recruiting more staff, opening additional locations, and so on.

Management Team

When writing a franchise business plan, the management section of a business plan outlines your management team, staff, resources, and how your business ownership is structured.

This part may be easily organized by dividing it into the following points:

Ownership Structure

Internal Management Team

External Management Resources

Human Resources

This section outlines your franchise business’s legal structure. An LLC or a Corp is favored in the franchise business ecosystem. 

This section should not only outline who is on your management team but also how each person’s skill set and experiences will contribute to the growth of your franchise business. Ideally, you and/or your team members have direct expertise in the franchise business. If this is the case, highlight your experience and skills.

Think of these external management resources as your internal management team’s backup. Consider forming an advisory board if your team is lacking expertise and experience with franchise business.

An advisory board would consist of 3 to 7 people who would serve as mentors to your franchise business. They would help with strategic direction and strategy advice.

If necessary, search for advisory board members with expertise running franchise business.

Describe all of your company’s external professional advisers, such as accountants, bankers, attorneys, IT experts, business consultants, and/or business coaches. 

The final topic to consider in the management area of your franchise business plan is your human resource needs.

Financial Plan

As part of your financial plan in a business plan , you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Financial statements include your income statement, balance sheet, and cash flow statement.

Income Statement

A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.

As you develop your income statement, you need to develop assumptions. Will you serve 50 customers per day or 200? Will sales grow by 2% or 8% per year? Your choice of assumptions will greatly impact your business’s financial forecasts. Conduct as much research as possible in order to ground your assumptions in reality.

Free: Income Statement Template

Create a financial statement for your franchise business by downloading our free income statement templates.

Balance Sheet

While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.

The balance sheet shows your franchise business’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:

• Assets: Tangible goods with the monetary worth that the company owns.
• Liabilities: Debt owing to a company’s creditor.
• Equity: The net difference when the total liabilities are subtracted from the total assets.

The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.

Create a pro forma balance sheet for your franchise business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.

Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.

For example, spending $500,000 to build out your franchise will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.

Similarly, if a bank sends you a check for $200,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.

Cash Flow Statement:

Your cash flow statement will help you determine how much money you need to start or grow your franchise business. In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a franchise business:

• Fees for registering a franchise business
• Taxes and licenses costs
• Business insurance
• Payroll or salaries paid to staff
• Facility rent and security deposits
• Construction / remodeling
• Start-up Inventory

Free: Balance Sheet Template

Create a financial statement for your business by downloading our free balance sheet templates.

List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.

Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix.

Bonus Tip: Learn what to include in a business plan appendix when writing a business plan.

Summary of the Franchise Business Plan

A franchise business plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the franchise business, your competition, and your customers. The plan will help you understand the steps necessary to launch and grow your franchise business.

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Wouldn’t it be nice if your business plan could be completed faster and easier?

With wise business plans Business Plan Template , you can finish your franchise business plan in just 6 hours or less with a 30-Day Money-Back Guarantee!

Also, you can download our 300+ free business plan templates covering a wide range of industries.

OR, we can create your franchise business plan for you

Since 2010, Wise business plans’ MBA professional business plan writers has developed business plans for thousands of companies that have experienced tremendous success.

Download Our Franchise Business Plan Template

We will show you some real-world business plan examples so you may know how to write your own, especially if you are seeking a bank loan or an outside investment and need to use SBA-approved formatting.

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Developing a Franchise Business Plan: Key Elements to Include

Aug 15, 2023 | Blog

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

Executive Summary:

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

Franchise Concept and Market Analysis:

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

Franchisee Support and Training:

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

Financial Projections:

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

Marketing and Advertising Strategy:

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

Operations and Systems:

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

Legal and Compliance:

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

Tips for Creating a Compelling Business Plan:

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

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

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

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

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How to create a franchise business plan

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 Start a Franchise

9 min. read

Updated January 5, 2024

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

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

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

• What is a franchise?

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

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

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

• How to start a franchise

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

1. Know your budget

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

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

2. Do your research:

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

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

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

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

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3. Participate in an interview

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

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

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

4. Write a business plan

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

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

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

5. Choose a suitable franchise location

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

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

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

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

6. Sign the franchise agreement and review the FDD

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

The FDD contains a wealth of information, including:

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

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

7. Make your business legal

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

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

8. Stay updated on franchisor policies

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

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

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

Dig deeper:

Should you open a franchise or start a business?

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

Things to consider when comparing franchise opportunities

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

History of franchising

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

• Common types of franchises

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

Food and beverage 

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

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

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

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

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

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

Business-to-Business (B2B)

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

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

Real estate

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

• Coldwell Banker

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

• Hilton Hotels
• Marriott International
• Holiday Inn

Personal care

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

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

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

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

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

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

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

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

1. Figure out what you’re good at

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

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

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

2. Match your skills to franchise opportunities

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

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

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

3. Keep an eye on market trends

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

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

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

• Start your franchise

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

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

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

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

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

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7 key elements of a good franchise business plan.

Writing a business plan is essential for any entrepreneur. However, creating one for a franchise business is different from another business type. You have to be aware of the needs of the franchisee and the franchisor. Once you have signed the franchise agreement , the franchisor will provide you with a marketing plan and other related materials. Below are the seven essential elements of a successful franchise business plan.

1. Executive Summary

This section summarizes the entire franchise business plan, including the key points and objectives. As it explains your business, the executive summary should answer these questions:

• Which product, service, or need does your business provide? 
• Is your business unique? 
• How will you guarantee your company’s success? 
• What skills do you possess that will help you achieve your objectives?

As the first part of the plan, it should leave a positive impression of you and your business to your readers. In short, it’s a written version of your business pitch. That said, the executive summary section should clearly define your business and lay down everything that makes your business proposition unique. 

2. Franchise Description

The following section presents the description of the franchise business model. This section should contain the following:

• Company Structure
• Mission Statement
• Fiscal Projections

Although you don’t need to provide detailed financial data, you should include an overview of your business, financial projections, and critical business facts. Likewise, you should share the goals and objectives for your business with your readers. Ensure your business goals are quantifiable and avoid vague terms that will only confuse your readers.

3. Market Analysis

The third section provides a detailed analysis of the industry and market trends. To analyze your competitors in the business, you need to do the following steps:

• Select ten direct and indirect competitors for comparison.
• Research their marketing strategies and product features.
• Compare the gathered details to business data. 

4. Marketing Strategy

You should also write a detailed marketing plan that includes market research, marketing goals, pricing strategies, advertising activities, and sales forecasts. This section will discuss your plan for implementing the said strategies and activities. You can use the information from the franchise training or the detailed information stated in Item 11 of the Franchise Disclosure Document .

5. Operations and Management

This section highlights your business’s strategy for maintaining a customer base and demand for your franchise business. You need to explain how you plan to advertise, your current advertising, and the background of your strategy. It also highlights the daily operation of your business. It covers the business operations and emphasizes the franchise owner’s responsibilities and tasks. This section also includes the company’s staffing, logistics, and solutions to potential challenges during the business operation. 

6. Financial Plan

The financial plan includes projected revenue, expenses, profits, and cash flow for the first few years of the franchise operation. If you’re starting your business with a franchisor, you can reference your Franchise Disclosure Document for this information. 

7. Pro Forma

You should also add a pro forma that focuses more on the three main accounting statements, such as the balance sheet, cash flow, and profit of loss. You can create your pro forma by following these steps:

• Create a chart of accounts.
• Calculate your business projected income.
• Project your liabilities and cost.
• Estimate cash flows

Consider talking to an accountant or financial advisor to confirm your estimates and validate your proposal to lenders or investors. 

Appendix (Optional)

Technically, the appendix is separate from the business plan but an additional section to present items that would enhance your document. Include items necessary to give the lender or investor a complete view of your franchise business. For example, you can include the resumes of management team members, tax returns, media clippings, etc.

A franchise business plan is a critical piece in accessing capital. A well-crafted business plan helps the franchise to clearly define the objectives, strategies, and techniques for a successful business operation. Also, this document allows entrepreneurs to identify potential risks and challenges associated with the franchise operation. It provides methods for mitigating or managing those risks. More importantly, this plan helps reduce the possibility of financial losses or other adverse outcomes for the franchisee. We hope this guide will inspire you to start drafting a detailed plan for the franchise business you have in mind now.  

Remember to continually update your business plan to reflect your business’s developing needs. At the minimum, it should be updated when something in your business changes.

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The Rise of Paris Banh Mi Franchise

Are you gearing up for a new business in 2024? Forget the next big tech start-up -the latest trend in town might be a perfectly toasted baguette. Take Paris Banh Mi Cafe and Bakery, for instance. This Vietnamese sandwich shop is rapidly growing, with locations popping up from coast to coast, from California to Florida. 

But what’s the secret behind their success? Explore why the Paris Banh Mi franchise has snowballed in the last two years and be inspired to start your own business .  

About Paris Banh Mi

The French baguette was introduced in Vietnam in the mid-19th century when the country was still a part of French Indochina. In the 1950s, Saigon saw the birth of a unique Vietnamese sandwich, “bánh mì,” which quickly became a favorite food of a large part of the population.

The story of Paris Banh Mi started in Orlando, Florida, at 1021 E Colonial Drive in 2019. Hien Tran and Doan Nguyen , a married couple passionate about food, opened the first Paris Banh Mi location. Their concept was simple: bring the delicious flavors of Vietnamese banh mi sandwiches, traditionally baguettes filled with savory meats and pickled vegetables, to a broader audience. 

The customers quickly fell in love with the fresh ingredients, bold flavors, and convenient fast-casual setting. Now,  Paris Banh Mi Cafe and Bakery promises to bring their customers the best “Baguette Banh Mi” taste.

In just two years, the laid-back cafe and bakery in Florida multiplied into a chain of stores in the  county. Today, Paris Banh Mi is serving customers in 46 locations all across the USA . The company plans to expand to 100+ locations by 2026. 

Each Paris Banh Mi Cafe and Bakery has a clean and spacious dining area, fast service, friendly staff, and a selection of delicious food and pastries. Take a peek at some of their mouth-watering baguette sandwiches filled with authentic Vietnamese ingredients.

Source: Paris Banh Mi website

For those craving something sweet, the bakery indulges you with a variety of French pastries. Check out their sandwiches, pastries, and beverages on the Paris Banh Mi Cafe and Bakery menu page.

Why Own a Paris Banh Mi Franchise

Paris Banh Mi is a franchised quick-service restaurant offering exciting opportunities for aspiring business owners. Many nail salon owners and aspiring entrepreneurs are switching to buying a Paris Banh Mi franchise. The main reasons why they love Paris are:

• It opens a great opportunity and is more profitable. 
• Seamless franchising process and fewer things to worry about
• Required low capital to open
• Higher end-of-year profits

The benefits extend beyond operational efficiency. Paris Banh Mi boasts a surprisingly low-cost entry point compared to other franchises. 

The initial franchise fee is manageable at $60,000. The total investment for opening a Paris Banh Mi can range from $200,000 to $500,000. This amount reflects the option to acquire a pre-existing, equipped location (second generation) for a lower investment cost or a complete build-out from scratch option. 

Regardless of the chosen route, the investment is significantly lower than that of building a business from the ground up, making Paris Banh Mi an attractive option for many entrepreneurs.

Licensing Information

Owning a Paris Banh Mi franchise is not just about delicious food! The company is looking for dedicated individuals who can run their restaurant full-time. They will provide a multi-day training program for new franchisees. In addition, Paris Banh Mi offers ongoing support for franchisees, guiding them to make informed decisions and thrive in this exciting industry.

You’re a good fit for a Paris Banh Mi Cafe Bakery franchise if you are: 

• Passionate about food, especially fresh baguettes and pastries
• A self-starter with a proven track record in business
• Financially responsible with a focus on results
• Ready to fully commit to building the Paris Banh Mi brand

If you have what it takes, don’t hesitate to contact them through the franchise hotlines on their franchise opportunities page . 

Buying a restaurant franchise is one of the most attractive routes in the world of franchising. Paris Banh Mi makes owning your own business a lot easier. Forget the high costs and headaches of starting from scratch. Their low investment and comprehensive training program mean you can be your own boss with a delicious product.  If you are ready to take a bite out of success, contact Paris Banh Mi today!

Chick-fil-A Franchising Opportunities in 2024

Buying a franchise from Chick-fil-A is an excellent money-making and healthy option. The fast-food chain has been serving hungry consumers the most delicious chicken sandwiches unmatched by other fast-food restaurants. Buying a Chick-fil-A franchise means investing in a good business and your future. It also lets you continue the culture behind the popular food chain. Here are Chick-fil-A franchising opportunities that will give you entrepreneurial freedom in 2024. 

Company Overview

Founded in 1946 by Truett Cathy, Chick-fil-A is deemed one of the longest-running chicken sandwich chains in the United States. The founder opened his first chain in Hapeville, Georgia, and has become a favorite soul food for many. Truett had worked in restaurants seven times a week and knew the importance of rest. That’s why he vowed to close Chick-fil-A every Sunday. He values rest and worship, so he sets aside one day of the week for his employees—a practice that Chick-fil-A still upholds today. 

Chick-fil-A also selects franchisees that uphold their values and passion. The company takes great care in selecting who they do business with, which includes getting to know candidates through a lengthy and intensive selection process. The founder’s vision is to influence the people and communities they serve. Chick-fil-A also seeks franchise candidates in Puerto Rico, Canada, and the United States. 

Chick-Fil-A candidates are required to show personal financial integrity and stewardship. They also need to have proven experience in leadership and a strong business acumen. Chick-fil-A ensures that candidates showcase entrepreneurial spirit, a strong character, and a growth mindset. This is to uphold the vision and values that Truett started in 1946. 

Franchise Training Details

• The initial on-site training programs last three to four weeks. However, the duration and actual location of the training will vary. 
• The training program primarily covers operational aspects, such as food preparation, service, customer relations, accounting, communications, purchasing, planning, maintenance, policies, management styles, and marketing. 
• The franchisor may require franchisees to attend various conferences and seminars occasionally. This is on top of the initial training program.
• The franchisor may also offer various programs that operators can use in advertising products or hiring staff, which aren’t stipulated in the Franchise Agreement. 

Franchise Territory

• The franchisor will grant franchisees one Chick-fil-A restaurant at the franchisor’s designated location. 
• Franchisees will not get exclusive or protected territory, so they may face competition from other operators. 

Franchise Obligations and Conditions

• Franchisees must devote their time and effort 100% to operating their Chick-fil-A restaurant. 
• The franchisor only allows franchisees to sell products approved by Chick-fil-A. This also applies to franchisees with a Chick-fil-A-associated food truck. 

Franchise Term and Renewal

The franchise term expires on early December 31, the year the agreement is signed or whatever the lease expiration is. Franchisees may apply for one-year extensions unless written notice is given 30 days before the franchise term expires. 

Financial Assistance

• The franchisor designates locations, leases, and subleases the store’s premises to franchisees. The lease and sublease terms will vary depending on the type of Chick-fil-A restaurant and location. 
• The franchisor also engages in concession agreements that oversee the utilization of non-traditional satellite unit locations with the proprietors or administrators of said satellite unit spaces.
• The franchisor offers extended payment periods for specific pre-opening costs stipulated in the Franchise Agreement. Additionally, the franchisor leases equipment to operators, charging a monthly rental fee based on the fair market rental value established by Chick-fil-A using its singular and exclusive business judgment. It’s important to note that neither the franchisor nor any affiliated entities provide any financing arrangements to operators, either directly or indirectly.

Did You Know?

Here are some fun facts about Chick-fil-A you need to know!

• Did you know that Chick-fil-A only uses peanut oil for frying? That’s what makes the chicken its unique flavor! Chick-fil-A is also the single most significant purchaser of peanut oil in the United States. They also believe peanut oil is a healthier option.
• The best Chick-fil-A promotional gig was the “First 100,” where the first 100 customers inside a new Chick-fil-A restaurant would get free chicken for a year. 
• Did you know that the founder, Truett Cathy, invented the chicken sandwich? He worked for a restaurant in Atlanta, and the newly delivered chicken breasts were too big to serve as airline food. He turned this into a meal for the staff. 
• You can get a free ice cream cone by walking up to the counter and trading your toy when ordering the kid’s meal. 

Franchise Cost

Your investment.

Here are the Chick-fil-A franchise costs:

If you’re looking for another investment opportunity, visit Franchise How’s website for more information. 

Zoom Sewer and Drain Cleaning Franchise Cost

Taking care of your home’s plumbing system is an essential part of being a homeowner. However, not everyone has the skill and patience to do it, and so franchises such as Zoom Sewer and Drain Cleaning are some of the most lucrative. Here’s what you need to know if you’re thinking of getting it:

Franchise Description

Zoom Sewer and Drain Cleaning provides drain cleaning, maintenance, sewer inspections, repair and replacement services for residential and commercial customers. The business began in 1995 and had been franchising since 2013. They have their headquarters in Norristown, Pennsylvania, and Zoom Franchise Company, LLC is the franchisor.

Training for the franchisee’s principal owner and personnel will be provided by the franchisor or its representatives and agents. Before starting your franchise, Zoom Sewer and Drain Cleaning will require you to complete their training program. It comes in two phases:

• Phase 1: 2 to 3 days training at the Franchise Business
• Phase2: 2 to 3 days in Norristown, PA

The franchisor may also require you to attend additional training during the length of your term agreement. The franchisor is planning to hold a 2 to 3-day national Zoom Fest yearly. This will be held in Norristown, PA, or any location it designates. They will require franchisees to attend, but their managers will be welcome.

The franchisor will designate a protected territory where the franchisees will operate their business. Before signing any Franchise Agreement, both the franchisor and the franchisee will agree on a geographic territory. 

The franchisor will base the protected territory on contiguous zip codes that will consist of approximately 500,000 individuals. This will be based on the most recent U.S. Census data at the time of signing the franchise agreement. This means that as long as the deal is taking effect, the franchisor or its affiliates will not locate, operate, or grant a franchise for another Zoom Sewer and Drain Cleaning business within the protected territory.

Obligations

The franchisor requires the franchisee or its principal owner to exert every effort to take responsibility for the management of the business. They will do this on a daily basis unless they agree on an alternate arrangement. With the franchisor’s discretion, the franchisee can hire a manager to handle the operations of the business.

Franchisors will also require you to sell products and services that have their approval. On the other hand, franchisees aren’t allowed to sell unauthorized products or services in compliance with the franchise agreement. Franchisees are also not allowed to solicit business outside of the protected territory. They are, however, permitted to serve customers outside of the protected territory as written in the FDD.

Term of Agreement

The initial franchise will take ten years after the signing of the agreement. You can renew the contract for another ten years, for four times, if you continue to meet the requirements.

Zoom Sewer and Drain Cleaning doesn’t offer direct or indirect financial assistance to its franchisees. In addition, they will not guarantee a franchisee’s note, lease, or obligation.

Get to know more about Zoom Sewer and Drain Cleaning before you get that franchise. Here are some facts about the business:

• They have very little competition in the niche. Most of their competitors are independent plumbers and contractors
• According to the company’s co-founder and COO, Ellen Rohr, this is a recession-resistant business, and the Covid-19 pandemic has proven this
• They have a reported $12 million in revenue with 53 employees and 15 franchisees 

The table below shows the estimated cost of a Zoom Sewer and Drain Cleaning franchise. Take note that these numbers may change without any prior notice.

Other Costs

For other franchising information, check out more articles here at Franchise How !

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• Business advice

How to Write a Franchise Business Plan

Posted: 18 Nov 2015 | 7 minutes read

Richard Holden, head of franchising at Lloyds Banking Group, explains how to write a winning business plan

Planning a business is not a simple matter of scribbling down a few ideas. If a franchisee is going to make their plan work, a much more thorough approach must be adopted.

A business plan simply sets out your idea, objectives and how you intend to achieve them. It shows there is a good market for your product or service.

Working document

0You should treat your plan as a working document. While you will need it to secure the financial backing you’re looking for, your plan should never gather dust. It is a great tool for measuring where the business is compared to where you thought it would be. It helps you identify opportunities for your business, as well as development areas you may need to focus on.

You should regularly review your plan. No business plan is ever set in stone, as your plans will evolve over time. So update it at least once a year.

When you start out, a lender will want to study your business plan, so it needs to demonstrate that you have the ability to build a successful business in your chosen market. A lender will only provide you with assistance if it’s confident you will be able to repay the financial commitment you are taking on. Your plan will help provide the confidence that you’ve thoroughly researched the opportunity and fully considered how you intend to develop your business.

While thorough research is necessary, a good business plan doesn’t need to go into minute detail about every aspect of the franchise. It will be relevant, punchy and to the point. It will grab the bank manager’s interest, so that they will want to lend to you.

What would I expect to see in a business plan? It’s always useful to start off with an executive summary, which provides a brief overview of what you’re looking to achieve.

The personal details of the business owner should include name, address, contact details, age, dependents, etc. You can include your previous experience, skills and knowledge or include your CV if you have one as an appendix to the plan.

Your plan should set out a mission statement and your short, medium and long-term objectives for the business. Nobody is going to hold you to these objectives, however it’s useful to understand from the outset what you want to achieve.

A brief overview of the franchise brand and its history is helpful. While a bank’s franchise unit may be fully aware of the opportunity you are investing in, the plan may be read by a bank manager or credit underwriter who doesn’t deal with the franchise brand in question on a regular basis.

Explain what the business does and how it does it. Include details of premises, vehicles, equipment, IT, stock, suppliers, customers, etc. Detail what local market research you’ve undertaken to incorporate demographics, potential customers and competitors.

If you have staff who are important to the business, list their roles and experience. Set out your marketing strategy to include any proposed launch event, public relations activity, website, local and national advertising, media profile, leaflet drops and promotional offers.

Close attention

The financial section is an important part of a business plan and receives close attention from any bank manager reviewing financial support. It’s tough to predict the future trading performance of your business, particularly if you are just starting out, when assumptions will be based on market research and possibly past performance of other franchisees in the network.

Financial projections for the first three years of trade are usually sufficient. However, a bank will be able to guide you. The cash flow forecast and profit and loss projection should be broken down monthly.

A cash flow statement shows the ability of the business to have cash available to pay bills on time. It’s all about timing and the amount of money flowing in and out of the business. A cash flow forecast can be a valuable tool if used correctly to identify potential shortfalls and if you need to take appropriate action. The profit and loss projection will determine when the business will become profitable and how profitable it will be.

Most franchisors will offer support producing your financial projections by providing you with figures to work from. Don’t take things at face value - ask about how and when they were produced and ensure they accurately reflect the potential of your business in your chosen location. Financial projections that have no relation to existing trading performance within the franchise network are speculative and open to challenge.

If you’re taking on an established franchise operation, provide the latest financial trading accounts and up-to-date management accounts for the existing business.

In addition, a bank requires a breakdown of the business owner’s own personal income and expenditure position, as well as their assets and liabilities summary. A bank manager will cross reference this with your personal bank statements, so ensure you provide an accurate summary.

You should also include how much capital you are investing in the business yourself and how much you are looking to borrow from the lender and for how long. Detail what security you are offering the bank to cover the proposed finance. Also declare if you’ve had any past or present financial difficulties, no matter how small they are. It is prudent to have a contingency reserve fund to fall back on in case the business takes longer than expected to get off the ground, so provide details if you can.

SWOT analysis

Producing a SWOT analysis is a useful exercise. Focusing on the business’ strengths, weaknesses, opportunities and threats can help demonstrate you have carefully researched the potential opportunity. Try to mitigate any weaknesses and threats to the business. Include your exit strategy if you have one.

The Lloyds Bank franchising website (www.lloydsbank.com/franchising) and the British Franchise Association website (www.thebfa.org) are great starting points for would be franchisees.

For new business owners, preparing a business plan and financial projections can be an intimidating process. However, it doesn’t need to be, as there is plenty of assistance available for people starting their franchise journey

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Writing a franchise business plan: 11 things you need to include

List these key points in your franchise business plan

A business plan is essential when you're starting a franchise. Here, we take a look at the essential information you need to include.

Writing a business plan is essential for any entrepreneur.

Putting one together for a franchise business is different to a standard one though.

First of all, you need to be aware of the needs of both the franchisee and the franchisor. When you have signed the franchise agreement , the franchisor will give you vital info like start-up and running costs as well as a marketing plan and related materials.

Your franchisor can also help you write your business plan as they’ve likely helped other franchisees with theirs. They’ll give you a franchise disclosure document which has a lot of information to help you write a business plan. It’s worth mentioning that they don’t need to approve your final plan as this could be in violation of governmental and trade requirements.

“Your franchisor can help you write your business plan”

For some extra help, have a word with other franchisees about how they created their business plans and if you’re looking to finance your business, chat with an accountant.

There’s no set length for a business plan – but the more concise it is, the better.

Introduction

Give your reader a brief overview of what your franchise is and how you plan to run it.

Business structure

Use this section to deal with the who’s who of the business and their roles.

Outline who is responsible for what, whether the franchise will have sole or multiple owners and if you’ll be involved in day-to-day operations.

What your product or service is

Go into more detail about what you’re offering and why you think it’s the right time to put out what your product or service.

Market analysis

Examine current market conditions: whether it’s a growing market, who your competitors are and how future-proof it is. Remember to include relevant facts and figures as well as referring to expert forecasts.

Cite your sources of supply, labour and materials. It’s also vital to mention resources you’ll be using to operate your business.

• What you have and what you need to acquire
• Critical procedures and sensitive issues along with possible alternatives
• Current premises and future requirements
• Your health and safety policies

Marketing plan

Run through your marketing objectives, such as number of sales or market share as well as where your product will be positioned in terms of things like price and quality.

You should also cover planned marketing communications, how the product will be distributed/sold, what your customer care policy will be and how said policy will work.

Decide on the best premises for your business needs with your franchisor in advance. Consider location, business growth, running costs and uniform business rates as well as insurance and planning consent.

Are you looking at financing? If so, how much and where will the money come from?

Highlight your ‘break even’ sales figure shown as percentage of anticipated sales.

You’ll also need to include the amount of money you’ll need to take out of your business to live on.

When writing your financial projection, you should be conservative. Outline when the lender can expect the loan to be repaid by using graphs, figures and charts. Just note that for legal reasons, your franchisor might not be able to tell you about projected earnings.

Profit and loss forecast

Base your profit and loss forecast on anticipated sales, taking away direct costs and overheads. Include as much detail as possible about anticipated sales and direct costs like materials and overheads.

Cash flow model

Try and give an idea of how much money will be coming in and going out of your business. Remember to account for cash flow fluctuations like getting materials when you’re setting up versus volume of sales at launch and beyond.

Use the appendix for items that will enhance your presentation. Include things you feel would be necessary – CVs of key management personnel, tax returns, media clippings – important nuggets like that.

Keeping your business plan up-to-date

Remember to continually update your business plan so that it reflects the developing needs of your business. At the very least, it should be updated when something in your business changes.

“At the very least, your plan should be updated when something in your business changes”

If you’re in need of some guidance on building your non-franchise business plan , head over here.

See also: What is a franchise?

Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business. More by Anna Jordan

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How to Start a Franchise In 7 Steps

Starting a franchise can be a big undertaking. But it can come with a number of benefits, including pre-established brand awareness, a framework for success, and built-in customer base. For those entrepreneurs looking to franchise, knowing where to start and having a plan is critical.

• As a franchisee, you need to know what to expect and the types of costs you will encounter along the way. In this blog, we cover seven foundational steps you can take to start your own franchise.

What Is a Franchise?

A franchise is a business arrangement where the franchisor grants the franchisee a license to access their processes, trademarks, and proprietary business knowledge. This allows the franchisee to sell the product or service under the franchisor’s business name without the franchisor having to manage every location themselves.

Franchising offers a proven path for entrepreneurs to start a business locally, while leveraging the strengths of an existing brand. From establishing a solid business plan to navigating legal requirements, the journey to franchise success begins with careful planning and strategic decision-making.

How to Start a Franchise In 7 Simple Steps

#1: plan and research franchise opportunities.

The first step in determining how to franchise a business involves a few key questions:

• Do you have a future vision for your business?
• Do you have the capital to start a franchise?
• Which industry is right for your franchise?

These questions can only be answered by you after evaluating and determining how franchising fits with your specific goals and objectives. Use tools like FranchiseDirect or FranchiseforSale.com to determine potential franchise prospects by location, investment level, or industry.

Begin by exploring various franchise opportunities to find a market that matches your interests, skills, and financial capabilities. Evaluate factors, such as market demand, competition, and brand recognition.

#2: Pinpoint Spend and Cost Budget

Starting a franchise is a large financial commitment. The initial investment to start a franchise can range widely, from $10,000 to $5 million, with most falling within the $100,000 to $300,000 range. The exact amount varies based on factors such as industry, location, and the specific type of franchise. Focusing on developing a finance plan early on can aid in the overall business venture.

#3: Set Business Plans and Goals

Even though many parts of the franchise are already defined, you still have control over its most important aspects. Creating a business plan will describe how your specific franchise will achieve the overall goals and objectives.

• Conducting industry research, local market trends, and creating a franchise business plan is essential for becoming a successful franchisee.

Developing this plan involves thorough research, a clear business idea, a robust financial strategy, effective marketing and sales plans, detailed operations planning, and a capable management team.

#4: Get a Franchise License Agreement

According to franchise laws, a franchisor is obligated to provide a Franchise Disclosure Document (FDD) before offering or selling a franchise. At the federal level, and in numerous states, there is no mandate to formally register an FDD.

However, in the 13 states, known as franchise registration states , a franchisor must register its FDD with the state’s franchise regulator before offering or selling a franchise within that state. In the nine states designated as franchise filing states , a franchisor must file a notice with the state regulator before offering or selling a franchise in those states.

#5: Form a Business Entity

Limited liability companies, or LLCs, provide business owners with liability protection, lower startup costs, and greater flexibility for management and taxes compared to other business structures, making them an attractive choice for many small business and franchise owners. Consider forming an LLC as you begin your journey to franchise ownership.

#6: Choose Location and Business Space

If your ideal franchise requires a physical location, choosing the ideal business location goes beyond aesthetics. It’s about selecting a competitive spot that fosters business growth, fits in your budget, and meets local and state regulations.

This decision can ultimately attract more customers, enhance operational efficiency, and ensure compliance with legal requirements. Consider factors like demographics, accessibility, and proximity in setting up a successful franchise location.

#7: Find and Hire Employees

Once you have a budget, business plan, and location established, you need to start planning to hire employees. For franchise businesses, hiring and retaining the right employees can be the difference between a thriving franchise business and a struggling one.

Your franchise recruitment strategy is an essential part of your future business success. Implementing a strong recruitment strategy with cost-effective solutions, like JazzHR, is an effective way to ensure efficient time-to-hire processes for potential applicants.

Improving recruiting speed, quality, and efficiency is an ongoing endeavor. But it’s also an effort that is much easier for franchises like yours to continually make progress with when using an intuitive, easy-to-use ATS.

With JazzHR , you can automate and optimize the entire hiring process so you can compete in real time for tap talent and make great hires so you can focus your time growing your business and your people.

Start the Journey to Your Franchise Today

Now that you know the fundamentals of what it takes to start your own franchise, you can begin your journey to doing the hard work. While becoming a franchisee takes significant planning and investment, you can begin knowing that you will have the strength of a well-known brand behind you and a framework that will guide your efforts. And with the right hiring software, like JazzHR , you can streamline hiring and find the best talent fast for your growing business.

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Product Distribution Franchise – Everything You Need to Know

Despite various economic uncertainties, it’s projected that the franchise industry will continue growing in 2024 with franchise establishments increasing by 1.9% (almost 15,000 units) and total franchise output increasing by 4.1%. 

If you’re thinking about joining a franchise, then you should understand that there are different approaches to franchising, one of which is called “product distribution”.   

What is Product Distribution Franchising?

“A Product Franchise, which has the highest percentage of total retail sales, represents a supplier-dealer relationship. The franchisor provides the product while the franchisee is given the right to sell that product.” ( 5 Different Types of Franchises ) 

Product distribution franchising differs from other types of franchising in that a franchisor provides the product but does not necessarily offer or require the franchisee to use a particular business operating system. However, it does not exclude a franchise from providing a specific business model and operating standards to their franchisees. 

Of course, product distribution franchising is best suited for product-oriented businesses, not service-based businesses. They generally supply large items such as cars and car parts, vending machines, computers, appliances, and more. A few examples of a product distribution franchise include: 

• GoodYear Tires
• John Deere 

3 Types of Product Distribution Franchises

#1 – Manufacturer-Supplied

With this type of product distribution franchise, the manufacturer acts as the franchisor and provides products directly to the franchisees. Key features include: 

• Exclusive Distribution Rights
• Extensive Support and Training
• Brand Recognition Benefit

A couple examples of a manufacturer-supplied product franchise include: 

• Automotive dealerships where car manufacturers supply vehicles and parts.
• Bottling and distribution franchises where soft drink companies provide the branded product.  

#2 – Wholesaler-Supplied

In this case, the franchisor is a wholesaler that sources and distributes products to franchisees. The wholesaler isn’t necessarily the original manufacturer. In fact, they often have a relationship with multiple manufacturers. Key features include: 

• Variety of Products
• Cost Efficiency
• Established Supply Chains
• Operational Support
• Flexibility in Inventory Management

A couple examples of a wholesaler-supplied product franchise include: 

• Convenience stores where the franchisee sources various products from a central wholesaler. 
• Pharmacy and drug store chains that receive a wide range of general goods and health products.

#3 – Retailer-Supplied

In this model, the franchisor acts like a retailer and directly controls the selection and distribution of products to franchisees. Key features include: 

• Centralized Supply Chain
• Brand Consistency
• Economies of Scale
• Comprehensive Support
• Standardized Operations 

A couple examples of a retailer-supplied product franchise include: 

• Fast-food franchises where the franchisor provides proprietary products and packaging to ensure consistency across all locations. 
• Clothing brands that supply franchises with branded apparel and accessories. 

Pros & Cons to a Product Distribution Franchise Model

Every type of franchise model will have benefits and drawbacks. It’s important to consider all of the factors when deciding which franchise to join. 

5 Advantages to a Product Distribution Franchise Model 

#1 – Proven Inventory System

Product distribution franchises specialize in providing one or more products. This means that they generally have a well-established inventory system, which streamlines stock management for its franchisees. 

#2 – Established Supply Chain

For the same reason a product distribution franchise comes with a proven inventory system, it also generally offers a robust supply chain. This helps franchisees operate efficiently while maintaining consistent quality in the products they offer. 

#3 – Territorial Rights

In many cases, a product distribution franchise will provide exclusive territories to its franchisees, which reduces direct competition within the network. 

#4 – Cost Savings

Product distribution franchises usually have the ability to purchase products in bulk at a lower price, which leads to higher profit margins for franchisees. 

#5 – Quality Assurance

These types of franchises also have the ability to control the consistency in product quality because of centralized purchasing agreements. 

5 Challenges to a Product Distribution Franchise Model

#1 – High Initial Costs 

Naturally, a product-focused franchise will have higher start-up costs than a service-based franchise due to the expenses for inventory, equipment, and storefronts. The initial franchise fee is typically higher as well. 

#2 – Limited Flexibility

With some types of product-based franchises, franchisees must follow the franchisor’s guidelines on product offerings, store layout, operation procedures, and more. 

#3 – Reliance on Supply Chain

While having an established supply chain is a benefit to product distribution franchises, the other side of the coin is that the franchisee is dependent on the franchisor for product supply. This presents a risk if the franchisor faces supply chain issues. 

#4 – Territory Limitations

The advantage of having exclusive territories also has a flipside, which is limited growth opportunities if the market within the territory becomes saturated. 

#5 – Limited Product Range

It’s also possible that franchisees will be restricted to selling the products that the franchisor provides, which would limit their ability to diversify their product offerings. 

Interested in Buying a Product Distribution Franchise?

If you think you want to buy a product distribution franchise, or if you’d like to learn about other types of franchises, FranNet is here to help. Our expert franchise consultants will help you find the right opportunity and walk you through the process from start to finish. Schedule your free consultation today to get started! 

Aug 2, 2024

Business Opportunity , Informational

• Business Loans

5 Steps To Get An SBA Loan For Your Franchise

Updated: Jun 8, 2023, 10:30am

Franchising may be an enticing opportunity for entrepreneurs, but finding funding can be complex. Through the Small Business Administration (SBA), there are options, including SBA 7(a) loans and SBA CDC/504 loans. The SBA imposes extensive eligibility requirements for both, and the application, approval and funding processes can be lengthy. However, the steps to apply are similar.

As an aspiring franchise owner, understanding the differences between these loan options and the application process can be crucial in securing the funding you need.

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SBA Franchise Loan Options

The SBA offers two main loan programs that can be used to finance a franchise: SBA 7(a) and SBA CDC/504. These options can be used for different purposes and can come with different terms and interest rates.

SBA 7(a) Loans

The 7(a) loan program is the SBA’s flagship program that offers loans up to $5 million for a wide range of uses. Franchisees can use SBA 7(a) loans for working capital, purchasing equipment and inventory, advertising, covering payroll, training employees or purchasing and renovating a location for your franchise.

Repayment terms depend on how you plan to use the funds, including up to 25 years for real estate and up to 10 years for equipment, working capital or inventory. Interest rates range from the prime rate plus 2.25% (for loans of $50,000 or more with terms of less than seven years) to prime plus 4.75% for loans of $25,000 or less with terms over seven years.

SBA CDC/504 Loans

SBA CDC/504 loans are administered by SBA-approved Certified Development Companies—or CDCs—to help businesses grow and create jobs. Loans can go up to $5 million and be used to purchase fixed assets like real estate, machinery and other equipment needed to operate a franchise.

CDC loans require a 10% down payment from the borrower, with 40% of funds provided by a CDC and the remaining 50% provided by a private financial institution. Repayment terms extend up to 20 years for real estate and up to 10 years for machinery and equipment. Rates are pegged to the five- and 10-year Treasury rate—usually around 3% of the loan amount.

CDC loans do have limits on what they can be used for. For instance, they can’t go toward working capital, inventory purchases or consolidating or repaying debt.

SBA 7(a) vs. SBA CDC/504 Loans

How To Get an SBA Franchise Loan

Here are the steps you’ll need to take to get an SBA loan for your franchise.

1. Consider Qualification Requirements

Before you apply for an SBA loan, it’s crucial to understand the qualification requirements. Both the SBA as well as individual SBA-approved lenders have loan requirements, and you’ll need to meet both.

The main qualification requirements for an SBA franchise loan may include the following:

• Minimum credit score of 690, though this varies by lender
• No bankruptcies in the past three years
• Down payment of at least 10%
• Paid franchise fee (before fund disbursement)
• No outstanding government debt

2. Check Your Eligibility

Not all franchises are eligible for SBA financing. To be eligible for franchise financing through the SBA, your franchise must be listed in the SBA Franchise Directory .

On top of that, there are other specific eligibility requirements that can vary between loans, including your business’s structure and revenue.

3. Compare Lenders

Eligibility and approval odds may depend on factors beyond SBA approval, so thoroughly research lenders before choosing one. Start by identifying SBA-approved lenders through the SBA Lender Match tool . If you want to apply for an SBA 504/CDC loan, choose a Certified Development Company that fits your needs.

Examine each potential lender’s qualification requirements, interest rates, fees and repayment terms. Depending on your preferred timeline, inquire about each lender’s application process and funding timeline. Learning each lender’s reputation and reviews from previous borrowers can also help you find the best lender for your business.

4. Gather Required Documents

Once you decide on a lender, gather the documents required for your application. The documents you need will vary depending on the SBA loan type and lender. In general, though, you should be prepared to provide the following:

• SBA loan application form (SBA Form 1919)
• A personal financial statement (SBA Form 413)
• A statement of personal history (SBA Form 912)
• Business financial documents, including income statements, balance sheets, cash flow projections and loan application history
• Personal and business tax returns for the past two to three years
• Description of collateral, where applicable
• Copy of your franchise agreement and, in some cases, an Addendum to Franchise Agreement (Form 2462)
• Business certificates, licenses and leases
• Business overview and history, business plan and resumes for each business owner

5. Complete and Submit Your Application

When you’re ready to apply with your preferred lender or CDC, review its application requirements and complete the necessary paperwork. Getting a response for SBA loans usually takes five to 10 business days. However, SBA loan approval and funding can take anywhere from 30 to 90 days from application to loan disbursement, depending on the complexity of your loan application. Stay in communication with your lender throughout the process so you can keep your application moving forward.

Alternatives to SBA Franchise Loans

If you’re looking to invest in a franchise, taking out an SBA loan isn’t the only option, and other financing options may provide more advantageous requirements, terms and funding speeds.

Franchisor Financing

With franchisor financing, the franchisor acts as the lender, providing funds you can use to cover startup and operational expenses. This type of franchise loan offers several advantages, including the ability to leverage the reputation and credibility of the franchisor’s brand.

Franchisor financing is best if you want to own a business but lack experience with business lending and prefer to keep your loan in-house. Keep in mind, however, that not all franchises offer this form of financing.

Small Business Loans

Small business loan programs for franchised businesses are available from banks, credit unions and online lenders. These loans typically have shorter terms and lower interest rates than SBA loans, and often come with streamlined applications and faster funding speeds. The best small business loans feature competitive interest rates as low as 3%, flexible repayment terms up to 10 years and funding in as little as a few days.

Equipment Financing

Equipment financing can help you purchase the equipment needed to operate your franchise. Loans are secured by the underlying equipment being purchased, so interest rates may be more competitive than with other types of loans. Interest rates are usually between 2% and 20%, and repayment terms can range from three to 10 years, depending on the lender and the equipment. This type of financing can be particularly beneficial if you need heavy industrial equipment or specialized technology.

Short-Term Business Loans

Short-term business loans are designed to be repaid over a short period, making them ideal if you need a temporary cash infusion to take advantage of a franchise opportunity or cover startup expenses like inventory, payroll or equipment purchases. Common loan terms for short-term business loans vary but typically range from one to three years, with interest rates from 3% to 50% or more. Because these loans are repaid over a shorter period of time, you’ll pay less in interest over the life of the loan.

Business Lines of Credit

A business line of credit establishes a set credit limit that can be drawn upon at any time and on a revolving basis during the draw period—usually between $2,000 and $250,000 for one to five years.

When used for franchise financing, lines of credit are often used for working capital, renovations or inventory purchases. Typically, interest rates are variable and range from 10% to 99%. Business lines of credit are best if you’re an experienced franchise owner with an established business and a strong credit history.

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Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their finances. She has also been featured by Investopedia, Los Angeles Times, Money.com and other financial publications.

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Stop Storytelling and Start Having Brand Conversations That Convert — Here's How Discover how to move beyond traditional storytelling and embrace impactful brand conversations with the Brand Trifecta framework, designed to unify sales and marketing efforts, create trust with your audience and drive significant revenue growth.

By Kate DiLeo Edited by Chelsea Brown Aug 7, 2024

Key Takeaways

• Storytelling isn't enough to drive sales. Instead, focus on concise, compelling brand conversations that clearly convey what you do, how you solve problems and how to stand out from the competitions.
• Utilize the Brand Trifecta framework, which consists of a clear tagline, a value proposition statement and differentiator statements.
• Ensure brand messaging is consistent across all channels to align sales and marketing teams and ultimately boost revenue growth.

Opinions expressed by Entrepreneur contributors are their own.

Stories don't compel people to buy. Conversations do. As an accidental brand strategist, I have learned that concise and compelling brand messaging is crucial to cutting through the noise, creating common ground with your target audiences and ultimately driving revenue. However, many of us get caught up in the trend that storytelling will enable us to deliver such a message and compel our prospects to take the next step and buy.

My journey into branding wasn't planned — it was a twist of fate. I originally intended to pursue a PhD in linguistic anthropology. However, when the market crashed, a professor advised me to get a day job, pay off my undergrad debt and gain some world experience. So, I left academia and took my first sales job, where I was tasked with selling IT training services.

Starting my career in this challenging sales role, I quickly realized the importance of clear and impactful communication through trial and error. Cold-calling IT professionals to sell high-ticket $2,500 training classes taught me that within the first 15 to 30 seconds, you must convey what you do, how you solve someone's problem and how you are different from the competition. This tough environment forced me to refine my communication skills and develop an effective brand pitch that enabled me to exceed my sales quotas and ultimately launch my career in brand strategy and development.

Related: How Your Communication Style Affects Your Sales Performance

The Brand Trifecta

Your brand is your path of least resistance to revenue. In the first 15 to 30 seconds, you need to tell someone what you do, how you solve their problem and how you are different from the competition. Narratives alone won't drive sales; engaging brand conversations will. When someone asks what you do, you shouldn't lead with a story. Instead, you need a clear, compelling brand pitch that provokes curiosity and makes people want to know more.

The Brand Trifecta is the powerful and proven messaging framework I developed during my early sales career, and it has since helped thousands of organizations craft brands that bring more prospects to the table and generate more customers who buy. The Brand Trifecta is rooted in buyer psychology and enables businesses to create "you get me" moments that their target audiences need in order to build trust and ultimately purchase.

The Brand Trifecta methodology consists of three key pieces: a tagline, a value proposition statement and a set of differentiator statements. The formulaic combination of these three messaging components creates a brand conversation that converts.

Your tagline is the first impression of your brand. It should be short, clear and provoke interest. Think of your tagline as the headline of your brand's message. It should immediately tell people what you do in a way that captures their attention and compels them to want to know more.

Next, you need a value proposition statement. This is where you expand on your tagline by explaining how you solve your customer's problem. A value proposition statement is not just a list of features and benefits; it succinctly speaks to the value you provide to your prospects and customers by addressing their specific pain points. Your value proposition should resonate with your audience and make them see you as the solution they've been looking for. In other words, your value proposition statement should create the "You get me!" moment for your customers.

Matt McNeany, CTO of OPMG, highlights the importance of data when identifying your customers' pain points : "Brands that do this most effectively are, of course, starting with data. They are using each customer interaction to learn more, capturing which content the customer is engaging with and adding that to their profile, building an experience that asks the customer their opinion and what they like." This is where the magic happens — when you use these insights to tailor your messaging, you create a value proposition that truly resonates and compels your target audience to take the next step and buy.

Related: 5 Proven Tips for Better Defining Your Business' Unique Value Proposition

Finally, your differentiator statements should clearly outline how you are different and better than your competition. What unique benefits do you offer? Why should someone choose you over others? Differentiator statements are crucial because they help you stand out in a crowded market and ultimately give your audience a reason to choose you over the rest.

"The best brands build differentiation through what they do as well as what they say. As the old saying goes, 'Don't tell me you're funny; make me laugh.' Or for brands, don't say that you care about customers, demonstrate it to me — via imperceptibly personalized experiences that predict what I want and give me what I need, making my choices simpler and my life easier," says McNeany. Bottom line: Your differentiator statements build trust and create a compelling case for your prospects to act.

Creating brand conversations that convert

At the end of the day, the ultimate goal is to create brand conversations that convert. Focus on provoking your audience to want to know more. Remember, you are not in the business of convincing everyone; you are in the business of converting the right people.

Therefore, make sure your brand messaging is consistent across all channels and touchpoints. This will align your sales and marketing teams and ultimately boost your revenue growth. McNeany emphasizes how automation can play a helpful role in consistent branding across channels: "Intelligent brands have realized that they need to deliver consistency while simultaneously managing an explosion of content across channels."

So, they are rapidly adopting an automated content supply chain, which combines a brand design framework with algorithmic decisions based on customer behavior to deliver relevant, on-brand communications in every channel. Whatever sales and marketing tactics you deploy, keep your brand message consistent so that customers have a clear understanding of who you are, what you do, how you solve their problems and how you differ from the competition.

Furthermore, don't lose sight of the power of consistent branding to bridge the gap between sales and marketing teams . Misalignment between sales and marketing can be remedied by cross-functionally leveraging a singular brand pitch that addresses what customers need to know to buy. When sales and marketing consistently use and leverage the same brand language, they become an unstoppable and unified front. The outcome? Increased conversions, shortened sales cycles and improved revenue growth.

Related: How to Master the Art of Brand Messaging With Clear and Consistent Communication

Get your brand out of the box and break free from the storytelling status quo by building your Brand Trifecta. Develop a clear tagline, value proposition and differentiator statements, and reap the benefits of a powerful brand pitch that unifies your sales and marketing teams, accelerates sales cycles and boosts growth. Remember, your brand is your path of least resistance to revenue. Create compelling brand conversations and watch your business take off.

Entrepreneur Leadership Network® Contributor

Founder of The Brand Trifecta

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Allbirds Enters the Next Phase of Transformation After Reporting a Solid Q2

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Now that Allbirds has turned the corner on its transformation plan, the brand is doubling down on revamping its product line-up.

In a call with analysts discussing the company’s second quarter results, Allbirds chief executive officer Joe Vernachio said that consumers are already reacting positively to Allbirds’ new product strategy , which involves refocusing on core styles  like the Wool Runner and limiting launches to avoid saturating the market.

According to the CEO, new products like the Wool Runner 2, Tree Runner Go and Canvas Piper “have all been met with positive consumer response.” He expects a similar result when the new Tree Glider launches in the next few weeks.

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In describing Allbirds’ new focus, Vernachio compared a brand to an orange, and design to its juice.

“If you’ve ever had an orange with no juice, it’s not very good, right?” Vernachio said. “So we are spending a lot of time and energy and momentum in creating that juice that we are going to be using to then apply to a product line and a product offering.”

To “inject newness as quickly as possible,” Vernachio said Allbirds used its resources to create new colors and materials for existing silhouettes for the second half of 2024 and into 2025. Allbirds is also currently working on creating 10 new product launches for fall ’25 and spring ’26, which Vernachio said will “not only enhance our product range, but also reinforce our dedication to quality, comfort, style and sustainability.”

When it comes to measuring progress, Allbirds is looking to acquire new customers that are entering the brand through new products and marketing.

“Paramount to the new products, we have to get new customers into our business,” Vernachio said. “And so we’re really focused on that performance.”

He added that all of Allbirds’ new products are selling for full-price, which is also important for brand equity.

“All of this combined, we feel really positive about where we’re headed,” Vernachio said. “We think we’re just at the very beginning of the process.”

The San Francisco-based footwear company on Wednesday reported that Q2 revenues dropped 26.8 percent to $51.6 million, in line with its guidance. Net loss was $19.1 million, or 12 cents per basic and diluted share, which was also in line with guidance. The results beat the expectations of analysts surveyed by Yahoo Finance, who were looking for a loss of 17 cents per share and $50.51 million in revenues.

After several quarters of falling sales, Allbirds announced a business  turnaround plan  in March 2023 centered on revamping product, optimizing U.S. distribution and store profitability, re-evaluating its international strategy and improving cost savings.

Since then, Allbirds has closed 14 retail stores, transitioned to a distributor model for its international business, cut goods and operating costs, decreased inventory and narrowed operating cash use. In addition to bolstering product, the next phase of the transition will also strengthen storytelling and shopping experience.

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