How to Build a Successful Franchise Business Plan

How to Build a Successful Franchise Business Plan

Steps To Take When Creating a Business Plan For Your Franchise

As a brand-new franchisee, your franchise business plan is one of the most important documents you will ever create – it’s your secret weapon to getting approved as a franchisee and securing financing. It also provides both you and your franchisor with a roadmap for how the business will be run. 

For this reason, it’s crucial that you take your time to develop a thorough franchise business that will impress your bank and the franchisor. Not sure where to start? Keep reading to learn more about why you need a business plan as a franchisee and what goes into this important document.

What is a Franchise Business Plan?

A franchise business plan is an important document that all prospective franchisees must create when starting their franchise business. This written document outlines all of the most important details about the business, including projections and strategies. 

Why You Need One

As previously mentioned, a franchise business plan is like a roadmap for your business that provides a clear direction for the franchise and outlines your goals, strategies, and plans of action.

Many franchisors require all prospective franchisees to submit a business plan during the application process to ensure that all applicants have a well-thought-out strategy and understanding of what is required when operating a franchise. 

Lenders will also require franchisees to submit a business plan before they can be approved for a business loan.

Simply put – the stronger the business plan the better your chances are of being approved both as a franchisee and for financing.

How to Create a Successful Business Plan for Your Franchise

A franchise business plan should be a comprehensive and well-structured document that includes important information about your business along with market analysis, financial projections, and more. 

While the specific details and sections of your business plan will vary depending on your specific franchise and the industry it belongs to, it should follow this general outline:

Executive Summary

This is where you provide a general overview of your business plan, including the franchisor you plan to go into business with. You should also summarize your business concept, goals, and your franchise’s Unique Selling Proposition (USP).

Franchise Description

In this section, you will introduce the franchise you’re investing in and provide an overview of its history and the products or services it offers. You should also explain your reasoning for choosing this franchise and what your vision is for the future.

Market Analysis

When creating your business plan, you’ll need to conduct thorough market research in order to gain a strong understanding of the industry your franchise is a part of, along with your target market. 

This includes:

• Identifying your target customer demographics, their needs, and purchasing behaviour
• Assessing your franchise’s competition – this includes other franchises and local businesses
• Analyzing market trends, growth potential, and any anticipated challenges or opportunities

This information should be included in the Market Analysis section of your business plan.

Franchise Operations

This section should cover the operational aspects of your franchise. This includes: 

• The location of the franchise
• Your facilities
• Any equipment you will be purchasing
• Supply chain and inventory management
• Specialized processes you will need to follow

You’ll also need to describe the management structure, along with the number of employees you will need to hire and their individual responsibilities. 

Marketing and Sales Strategy

Here is where you’ll need to sell yourself as a franchise owner and define your strategy for marketing the business, attracting customers, and generating sales. 

You should include specific advertising and marketing methods you plan to utilize and explain how you will use them to generate leads, convert them into customers, and retain their business long-term.

Your budget for marketing and sales activities should also be included in this section.

Financial Projections

In this section, you should outline your financial plan and include the following information:

• Revenue projections
• Startup costs
• Operating expenses
• The initial investment required to open the franchise and the 
• The anticipated return on investment (ROI)
• A cash flow statement
• Profit and loss statement
• A balance sheet

Legal Considerations

This is the section where you will address the legal considerations of operating a franchise, such as: 

• Obtaining necessary licences and permits.
• Franchise agreements
• Disclosure requirements
• Local laws and regulations

It’s important to note that when drafting this section, you should consult with a legal professional to ensure you have included every important legal consideration. 

Risk Assessment

This section is where you will identify any potential risks and challenges that could arise from running a franchise business and provide strategies for mitigating those risks.

Implementation Plan

This section should include a step-by-step plan for launching and operating your franchise. It should include a timeline for meeting important milestones along with the actions you will take to ensure the franchise is successful.

Appendix

This section is the conclusion of the business plan and is where you will include any additional: 

• Supporting documents
• Market research data
• Legal agreements
• Financial statements

Remember that this is just a general outline of what a franchise business plan typically looks like. If you are a prospective franchisee working on your business plan, we always recommend consulting with your franchisor to determine if there are any requirements, guidelines, and resources available to ensure you include all the necessary elements.

Looking to start a franchise but haven’t yet found the right franchisor to partner with? Consider investing with Gorilla Bins. 

Gorilla Bins is Ontario’s leading waste management franchisor with several locations across the Greater Toronto Area.
Gorilla Bins offers its franchisees lots of training and support to help them be successful. We also have a track record of producing successful franchisees and have tripled our revenue over the past five years.

Get in touch with our team today to learn more about Gorilla Bins and how we can help set your franchise up for success.