When to Draft Your Franchise Business Plan
Franchising opportunities provide tremendous potential benefits for both franchisors and franchisees. On the franchisor side, you have an opportunity to expand your business without being required to supply all the capital and manpower. On the franchisee side, you get a ready-made business model, fully developed brand, and ongoing operational and marketing support. When executed well, franchising creates an advantageous opportunity for both parties.
Regardless which side of the franchise agreement you may be on, there are several instances when you will be required – or will find it helpful – to have a thorough, professional business plan.
As the franchisor, you will need a business plan for the following:
- When you are considering turning your business into a franchise – The very first step to franchising is determining if your business will make a suitable franchise opportunity. The best way to do this is by going through the business planning process. Writing a business plan forces you to clearly articulate key aspects of your plan and outline the full concept. In the process, you will be proving to yourself it is a viable model while also creating a foundation for future business plan needs.
- When you need to secure funding to roll out your franchise – While franchising makes it possible to share in the capital and labor requirements of opening a new location, rolling out a franchising model itself can be an expensive endeavor. You need to create technical training documentation and programs for franchisees, develop a sound sales & marketing strategy, produce countless legal documents, and consult with finance experts. These costs can add up and, in many cases, you will need to raise capital. In order to do this, you will need a professional business plan.
- When you are ready to attract franchisees – The business plan used to raise capital should not be the same as the business plan for enticing franchisees. While they will be similar and have the same basic information, the purpose of the plan and the interest of your audience is quite different. Every business plan needs to be written with the correct audience in mind. Additionally, you will not share internal financial information with franchisees, but rather their potential for return. For these reasons, these should be slightly different documents.
On the franchisee side, you will need a business plan for the following:
- When you want to be taken seriously by the franchisor – If you’ve decided to pursue purchasing a franchise, you may proactively put together a business plan to convince the franchisor that you can open the business in your intended location successfully. At this stage you may not have all the detailed information about the franchise but you will be able to give a basic overview of market research and your experience to successfully convince them that the location and your experience will be a successful fit.
- When you need to secure funding to purchase the franchise – As the franchisee, you are usually responsible for the development costs to open the new location. If you do not have the capital saved, you will need to appeal to a partner, potential investor, or lender. This will likely be an adaptation of the franchise masterplan modified for your specific location.
There are multiple ways to compose a franchise business plan. It will all depend on your specific stake in the business and what your goals are. In any case, Joorney’s expert business plan writers can help you create a professional and convincing franchise business plan tailored to your specific audience and your objective. Our team can help you create a roadmap to franchise your business, open a franchise, or secure the funding you need to be successful.