what is a business plan for a franchise

Franchise Business Plan Template

Written by Dave Lavinsky

Franchise Business Plan Outline

• Franchise Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Start Your Franchise Plan Here

Franchise Business Plan

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

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

How To Write a Franchise Business Plan & Sample

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

• Executive Summary – This section provides a high-level overview of your business plan. It should include your company’s mission statement, as well as information on the products or services you offer, your target market, and your business goals and objectives.
• Company Overview – This section provides an in-depth look at your company, including information on your franchise’s history, franchise business model, ownership structure, and management team. You will also include a copy of your franchise agreement.
• Industry Analysis – In this section, you will provide an overview of the industry in which your franchise will operate.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your franchise from the competition.
• Marketing Plan – In this section, you will detail your marketing strategy, including your marketing initiatives and promotion plans. You will also discuss your pricing strategy and how you intend to position your own business in the market.
• Operations Plan – This section will provide an overview of your store’s operations, including your store layout, staff, and inventory management.
• Management Team – In this section, you will provide information on your management team, their experience, and their roles in the company.
• Financial Plan – This section includes your company’s financial statements (income statement, balance sheet, and cash flow statement). It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is a franchise business plan.

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

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

What Are the Main Types of a Franchise?

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

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

The main source of revenue for a business franchise are franchise fees and royalty fees. Some also earn from other fees like distribution fees, site assistance fees, training fees, technologies, and rebates.

The key expenses for franchises are inventory, payroll, marketing and advertising, rent and loans.

How Do You Get Funding for Your Franchise?

Among the most common sources of funding for a franchising business are commercial bank loans, Small Business Administration (SBA) loans, personal savings and friends and family loans/gifts. There are also lenders that can supplement other loans with equipment financing and business lines of credit for franchise businesses.

This is true for a business plan for a franchise restaurant, a business plan for franchise store, or any other franchise business plans.

Where Can I Get a Franchise Business Plan PDF?

You can download our free franchise business plan template PDF here . This is a sample franchise business plan template you can use in PDF format.

How To's

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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Franchise Business Plan Template

If you want to start a franchise business or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their franchise businesses.

Below are links to each section of your franchise business plan template:

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is the easiest way to complete my franchise business plan.

Growthink's Ultimate Franchise Business Plan Template allows you to quickly and easily complete your Franchise Business Plan.

Where Can I Download a Franchise Business Plan PDF?

You can download our franchise business plan PDF template here . This is a business plan template that will help you with how to create a franchise business plan in PDF format.

What Is a Franchise Business Plan?

A business plan provides a snapshot of your franchise as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why Do You Need a Business Plan for a Franchise?

If you’re looking to start a franchise or grow your existing franchise you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your franchise in order to improve your chances of success.    Your franchise business plan is a living document that should be updated annually as your business grows and changes.

What Are the Sources of Funding for a Franchise?

Franchises are usually funded through small business loans, personal savings, credit card financing and/or angel investors.

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
• 10. Appendix
• Franchise Business Plan Summary

Start Your Franchise Plan Here

Other Helpful Business Plan Articles & Templates

The 7 Key Elements Of An Effective Franchise Business Plan

• Adam Goldman
• May 12, 2020

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

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

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

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

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

What are the 7 Elements of a Successful Franchise Business Plan

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

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

Ready to Be Your Own Boss?

1. franchise business plan: executive summary.

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

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

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

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

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

2. Franchise Business Plan: Business Description

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

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

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

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

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

3 . Franchise Business Plan: Competitive Analysis

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

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

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

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

4 . Marketing Plan and Sales Plan

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

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

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

1. Define your target audience

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

2. Set marketing goals

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

3. Develop a marketing strategy

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

4. Create a sales strategy

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

5. Identify key performance indicators (KPIs)

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

6. Set a budget

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

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

5. Franchise Business Plan: Operations and Management

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

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

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

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

6 . Financial Plan

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

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

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

7. Franchise Business Plan: Pro Forma

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

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

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

1. Create a chart of accounts.

2. Calculate your business projected earnings.

3. Create financial projections

4. Estimate cash flows

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

Keep your Franchise Business Plan Updated!

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

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

Regularly Review Financial Performance

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

Customer Feedback and Market Research

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

Assess and Adapt Marketing Strategies

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

Evaluate Operational Efficiency

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

Revisit and Revise Goals

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

Seek Professional Assistance

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

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

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

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

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

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

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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.

Clarify your ideas and understand how to start your business with LivePlan

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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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

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

• Fill in the blanks – Outline
• Financial Tables

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:

Market opportunity:, mention your product or services:, management team:, financial highlights:, call to action:.

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:

About the business:

Provide all the basic information about your business in this section like:

Product distribution franchise

Management franchise, business format franchise.

• 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.

Mission statement:

Business history:, future goals:.

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:

Market size and growth potential:, competitive analysis:, market trends:, regulatory environment:.

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:

List the services:

• 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:

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):

Marketing strategies:, sales strategies:, customer retention:.

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:

Operational process:.

• 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:

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:

Organizational structure:, compensation plan:, board of advisors:.

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:

Cash flow statement:, balance sheet:, break-even point:, financing needs:.

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.

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Developing a Business Plan for Your Franchise: When and How to Do it

Creating a business plan is a critical step toward the launch of any new business, including a franchise. It’s a step to take earlier in the process than you may think. Will you be seeking financing from a third party? If so, your business plan should be complete before you even ask. And that’s a good thing, because the process of preparing a business plan is very useful. It forces you to anticipate and answer a number of questions about your expectations for the new business. You’ll identify the challenges ahead and be ready to tackle them.

Developing a business plan for a franchise is much easier than for an independent business start-up. You’ll have a good deal of information already at your fingertips or readily available. You can find much of the verbiage you’ll need for the narrative portions of the business plan within the franchisor’s documents. Look to any earnings representations in the franchisor’s disclosure documents to find the financial information you need.

5 Key Sections to Include in Any Business Plan

Each business plan is unique to the particular business it describes. Nonetheless, there are several sections common to any business plan. Franchise business plans will have an additional section outlining the track record, personnel, and support available from the franchise company. You can also include items like the franchise company’s sales brochure or Franchise Disclosure Document (FDD) as attachments to your business plan. This additional section will give lenders (and others you may be trying to impress) a great degree of confidence going forward.

Five key sections contained in a typical business plan, whether for a franchise or independent business, are:

Introduction

This section describes the business in detail. It specifies the product or service involved, the size and characteristics of the market, and the degree of competition present in the market. It also sets forth the operational approach for taking the business to market, as well as any associated challenges and risks.

This section lists key management roles for the new business. It names the people who will fill each role and provides background information about each one. Each bio should emphasize prior experience that’s relevant to the new business. For a franchise business, this section will also include information about the franchisor’s staff who provide support to franchisees.

This section defines the target market: who is your customer and how will you attract them to to the business? It explains advantages your business will offer over competitors and details marketing and advertising plans.

Pro Forma Financial Projections

This section includes projected income statements, cash flow statements, and balance sheets that show the anticipated financial performance of the business. It discloses all material assumptions that are used to prepare the projections. Make sure to prepare these projections on a very  conservative basis. There will always be delays and challenges that you can’t anticipate.

Financing Needs

Be sure to prepare this section even if all funding is coming from your savings. It includes a complete analysis of all start-up costs, including working capital to cover initial marketing plans and operating losses until the projected breakeven point. Even if you are not borrowing, the process of carefully detailing this information will better prepare you for whatever might happen as you get the business up and running.

Don’t be overwhelmed as you consider the information above. Remember, for a franchise business, most of this information will be readily available from the franchisor. Check out the franchise company’s website for information that will help you complete the Introduction and Marketing sections. The franchisor’s FDD will help you with the section on Financing Needs. And, if the franchisor’s FDD includes Item 19 earnings representations , you’ll be on your way to completing the Pro Forma Financial Projections section.

Preparing a Franchise Business Plan: The Early Bird Gets the Worm

Some franchise companies require franchisee candidates to begin work on (or substantially complete) their business plan before they can be approved as a new franchisee. Even if they have no such requirement, it’s a good idea to prepare your business plan relatively early on. The process will help you identify a number of questions that may not have otherwise occurred to you. You’ll then have a chance to contact the franchise company and get answers. Make certain you have a clear understanding of all aspects of the franchise prior to making your final decision.

Finally, remember to update and finalize your business plan after you complete the franchisor’s initial training for new franchisees. You will have a deeper understanding of operations, marketing plans, and many other aspects of the business after you complete the initial training. And many franchisors will supply pro forma financial models that you can use to double-check or even replace the financial projections in your business plan. Take the time to carefully review your entire business plan based on your new knowledge. That way, you’ll be fully prepared to get your new franchise business successfully up and running.

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How to Create a Franchise Business Plan

A business plan is a document that outlines the goals, strategies, and operational plans of a business. In short, it is a roadmap to success . Not only is it an essential tool for an aspiring business owner to get started, but it serves as a benchmark for measuring progress and making adjustments as needed down the road.  

If you are planning to purchase a franchise, creating a thorough and effective business plan is essential to your success. Not only will it help you prepare for what lies ahead, but it is also a requirement if you are looking to secure financing. In fact, a well-written business plan can make the difference in whether a lending company approves your loan.    

Information You Need to Write a Compelling Business Plan  

A business plan is not something you can just jot down in a few minutes. Rather, you will need to spend intentional time compiling information and developing a strategy that will form the blueprint of your business. 

Here are several items you should consider including in your franchise business plan: 

• Relevant work experience
• Insights from existing franchisees 
• Statistics within the industry 
• Current industry news 
• Updated data related to local economy 
• Local marketing tactics  
• Franchise Disclosure Document (FDD) 
• Additional franchisor literature 
• Necessary permits and licenses 
• Market area map that includes all current and potential competitors

What Should Be Included in a Franchise Business Plan?  

Clearly, forming a business plan requires a diligent effort. However, if you are looking to own a franchise business, you won’t need to start from scratch since the franchisor has already compiled much of the information you will need. While you still need to work hard to put together a solid business plan, there are several templates available for guidance. No matter which template you choose, your business plan should include the following sections: 

Executive Summary 

This section will provide a mission statement for the business and then explain how your business will achieve its goals . Someone should be able to read the executive summary and know the purpose of your business and the potential it has in its given market. 

Business Description

The information provided here should be thorough. Fortunately, Item 1 in the Franchise Disclosure Document (FDD) will give an overview and history of the franchise you are seeking to buy . Furthermore, you should include details related to products and services, market and competition, business operations, and the potential challenges your business might face. 

Operations & Management Summary

This section will explain how things will get done in the business . It should outline the structure of the management team and include specific instructions related to the day-to-day operations of the business. Team members should be able to refer to the operations part of the business plan as they aim to implement the business’s strategies. 

Market & Industry Analysis

You will need to provide an analysis on the market that you are entering, which includes: 

• A description of the marketplace
• What your competitors are doing
• Details that support your specific business strategy

Furthermore, you should also understand the industry along with its risks and opportunities, so that you can build strategies that take advantage of the opportunities while mitigating potential risks.

Competitive Analysis

You shouldn’t start a franchise business with your blinders on. It’s important to know what your competitors are doing and how they are performing . Evaluating your competitors is a way to validate the predictions you have for your business’s performance . By this point, you have probably already gathered all the information you need about your competitors. Ensure that you perform a thorough analysis of this information as it will guide you in your business decisions.  

Marketing & Sales Plan

What you include here is dependent on which franchisor you work with since you are obligated to use their sales and marketing tactics. You will want to know the process for targeting new customers and how much flexibility you have to implement your own marketing strategies . You should also provide specific information related to the initial marketing plan and what the ongoing marketing strategy will look like. Finally, it’s important to explain how the franchisor will support you in these efforts .

Financial Plan

This section should thoroughly outline the financial details of your business: where it has been, where it currently is, and where it’s going . The data will include: 

• Business costs 
• Current funding for the business 
• Expected future financial needs  

While the actual financial performance of each franchise unit will vary, the Franchise Disclosure Document (FDD) provides information that is helpful for making financial projections. 

• Item 19 includes the financial performance representations (FPR) for a prospective franchisee 
• Items 5-7 have helpful financial information related to the initial fees and investment needed

Speaking with existing franchisees is also an integral part of this process. 

Pro forma is another part of the financial section, and it includes projections of future expenses and revenues , which you can corroborate with the following business information:  

• Balance sheet
• Profit or loss statement 

Perhaps it goes without saying, but be sure to update your business plan if something changes. It is not a document you should finish and then put away to gather dust. It is a valuable resource, and you should use it at every stage in your business if you want to be successful.  

Ready to Get Started With Your Franchise Business Plan?  

Creating a thoughtful and detailed business plan is key to each step of the franchising process. If you are ready to get started with owning a franchise business, then FranNet is here to help. Our franchise consultants will provide the resources, support, and guidance you need to make an informed buying decision. Schedule a free consultation today! 

Mar 17, 2023

Business Ownership , Buying a Franchise , Finance

• Franchise Buyers Guide :

Preparing a Franchisee Business Plan

Historically, a business plan is mostly a financial plan and analysis, specifically focusing on: "Why I need your money, what I will do with your money, how and when you will get your money back, and what a great guy I am and what a great business this is; or, why you should give me the money." It is usually a highly stylized presentation with numerous spreadsheets and exhibits.

This is a justifiable focus for most business start-ups since it is common knowledge, especially among lenders and investors, that many new businesses fail because they "run out of money." The available money usually dries up quite quickly, that is, during the start-up phase of the business. Owning a franchise will help prevent this from happening, thus the need for a different approach to the franchisee business plan.

What Should Go Into a Business Plan and Why

The franchisee business plan must be a total success plan, not just a financial plan. It will, of course, include the expected financial elements mentioned above. However, a great deal of the franchisor's vision, mission, philosophy, operating procedures and experiences must be blended in with and balanced by your firsthand knowledge of factors in the local marketplace. These elements are both needed to allow you to repeat the successes of other franchisees.

In the decision-making process of acquiring a franchise you will have already obtained the necessary local market knowledge for the plan:

• Working experience in the type of franchise you are planning to acquire
• Information from telephone calls with, and on-site visits to, currently operating franchisees
• Comparative industry association statistics
• Latest information from industry press and newsletters
• Local economic data from your state industrial commission
• Local press marketing information
• Franchisor's FDD
• Franchisor's literature
• Other franchisor information such as preliminary plans
• Population, household and income statistics for market area
• Special permits and licenses needed
• A map of the market area with numbered dots for each existing and anticipated competitor outlet
• Each dot color-coded for independent, competing franchise-other, same franchise competitor
• Table with a number for each dot with all obtainable information about each competitor:

Location characteristics:

• Shopping strip
• Mall, open or closed
• Square feet of outlet
• Length of time open
• Number of employees
• Location characteristics

Franchise Type

Your franchise opportunity research has outlined the various types of franchise arrangements you might consider:

Typical franchise types:

• Single Unit
• Multiple Units
• Area Development

Less typical franchise types:

• Sub-Franchisor
• Fractional franchises
• International

Your selection of franchise type will have a very significant impact on your franchisee business plan. For example, a single-unit, 1200-square-foot retail outlet franchise plan will be considerably easier to prepare than a franchise hotel development plan for an area development franchise with sub-franchise rights granted by an off-shore franchisor.

You Are the Planning Staff and More

It has probably become apparent to you by now that the preparation of the franchisee business plan, as well as your ultimate success as a franchisee, will be pretty much be the result of your own effort. In order to write a franchisee business plan that has credibility, it is imperative that you do all your own research. All the analyses need to be examined from both the macro and micro points of view, especially competitive analyses. Your personal support staff is limited at best. It is likely to be made up of your spouse and family, those you pay to prepare the document in its final form and your CPA and attorney.

Once you have signed a franchise agreement, you will find that your franchisor is in a position to provide the information you need from him in order to complete the plan. In some cases franchisors provide their franchisees with business plan formats on disks with blanks to fill in for a specific franchisee situation. These are usually handed out during the franchisor's training program. Since it is likely you will want this information prior to training, you will begin the delicate task (which will last the lifetime of the franchise) of obtaining from your franchisor what you need, when you need it, without impairing the franchise relationship.

Unless the corporate executive is willing to create a precise total success plan, he or she should make a lateral move to another organization in which demonstrated skills may be capitalized upon. The reason is that the decision to be a franchise owner is one from which there is only, at best, a very painful retreat, which is very likely to seriously impact both personal financial condition and ego. From the moment the franchise agreement is signed, personal negative cash flows begin and continue until the business reaches break even. A corporate executive should view his or her franchisee business plan as a set of personal "no retreat strategies." There are very few places of comfort to go back to, unless the franchisee business plan results in success.

Purposes of the Franchisee Business Plan

Quite often the franchisee business plan is undertaken to raise money for the business start-up. Even if the start-up is completely funded, the plan should still be written with the following audiences in mind:

• Spouse and family
• Advisors, CPA, banker and attorney
• Public relations entities
• The franchisor

The reasons for writing the franchisee business plan, other than raising funds, are to provide:

• Decision confirmation
• Self-direction and controls
• Basis for reality checks
• Personal expectations adjustor
• Confidence builder
• Basis for timely assistance solicitation
• As a reference when obtaining input in areas of non expertise
• Financial analysis, initial budget control
• Basis for results measurements and evaluation
• Control business development
• Cash flow projections
• Bail out signals
• Exit and end game strategies

The steep negative cash flow which can occur from the point of franchise agreement signing to break even on operations is punctuated by a host of activities the typical corporate executive may never have undertaken or has long forgotten. The time between events in the start-up will feel especially short, since the franchisor has the formula down pat and is prepared to implement it swiftly. Unless you are obtaining a turn-key franchise, you can look forward to doing at least the following during start-up:

• Business plan preparation
• Determine, evaluate and provide resources
• Site selection and approval
• Site design, signage and zoning approvals
• Site preparation
• Build-out, orders, supervision and control
• Franchisor training
• Employee selection and training
• Initial inventory or start-up package
• Initial marketing
• Grand opening
• Operations refinements
• Providing reports required by:
• Bank and/or investors
• Regulatory compliance issues, licenses

The primary purpose of your franchisee business plan is to see to it that you get through this critical start-up period successfully. Your franchisor can help, but in the last analysis you must do it. Plan well, for unless you do, there will be no tomorrow.

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Advice and Ideas for UK Small Businesses and SMEs

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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Franchising Strategy: Strategic Business Plan Development

Aug 27, 2021 | How to start a franchise

Thriving franchises tend to share some aspects, including well-designed franchising strategies and business plans. Get more information on how to develop your own Strategic Business Plan , and find out how to lay the foundation for a potential franchise.

Find out how “one size fits all” can be a recipe for disaster for possible franchisors, and discover the techniques for ensuring that you build a solid franchise with the needed structure to help them attract customers and grow.

This look at business plans and strategies for franchises help to give you the tools to possibly start your own franchise conversion process.

All too often, inadequate planning and development of a franchise business structure before offering franchises is reason why newcomers to franchising will fail.

The importance of a Strategic Business Plan

Sometimes, they will just ask their lawyer for input.  But while good franchise lawyers are invaluable when it comes to legal issues, they are unlikely to have the business experience, education, or expertise to develop sophisticated cash flow models and the organizational development plans that should accompany them.  Instead, they must provide their input based on “what they have seen” in the marketplace.  In fact, many franchisors will make the mistake of simply copying the franchise structure of their competitors when entering into the complex world of franchising.  The rationale is that “if it worked for them, it should work for me.”

The problems with this approach are threefold.

First , this approach assumes that the new franchisor’s franchise offering should be similar to the offerings of their competitors.  Unfortunately, “me too” is not a strategy.  Often, it is a recipe for disaster.  A new franchisor must distinguish itself from their competitors in order to attract a franchise buyer who has a choice between them and their more established rival.  This difference can come in the form of the consumer offer, franchise marketing, franchisee support and training, or franchise structure.  And all of these will have implications for the way in which the franchise offer is crafted.

Second,  this approach assumes that even if a similar strategy is implemented, that the resources of both organizations are similar.  Every organization comes to franchising from a different starting point – with different strengths and weaknesses.  Competing with an established franchisor by going head-to-head in an area of their strengths can be a huge mistake.

Third,  this approach assumes that a new franchisor’s competitors did it right in the first place.  What if they simply made decisions at random?  Often, it may take years for a franchisor to realize that an early decision is resulting in diminished profitability.

A mistake of a  single percentage point on a franchise royalty can easily cost you millions of dollars.   How?

Consider the following example:

A franchisor expects that the average unit revenues of their prospective franchisees will be $500,000 and hopes to sell 100 franchises in the first year.  But instead of charging a 6% royalty, they opted for 5%.

It does not seem like a big mistake, when accounting for a single franchisee.  It simply means that the franchisor will make $5,000 less in royalty revenues.  But in franchising, we are talking about growth on steroids, and this mistake might be multiplied 100 times or more.  And, since there are no expenses associated with this $5,000, this mistake comes right off the bottom line.

So do the math:

And an incorrect royalty is only one of a number of different business decisions that a new franchisor will make early in the process that could impact long-term profitability.  Just a few of the many others include:

• Advertising fees
• Technology fees
• Product margins
• Type of franchise offered (individual, area development, area representative, etc.)
• Organizational structure
• Compensation structure
• Geographic growth strategy
• Territorial rights provided to franchisees
• Reservations of rights for the franchisor

In order to best position new franchisors for success, the iFranchise Group will often take a six-step approach to the development of your franchising strategy and business plan:

• Initial discovery – we immerse ourselves in your business and organizational structure to better understand how you should position the concept.
• Competitive benchmarking – we then gain a detailed understanding of the business decisions made by your competitors, understand competitive strengths and weaknesses, and how to best position the concept against them.
• Organizational gap analysis – we gain an understanding of your internal capabilities, your needs to fill certain “gaps” when delivering services to your franchisees, and the resources you can call on to do so, in order to plan your organizational development.
• Initial strategy development – we use your goals and your unique strengths and weaknesses to develop a preliminary franchise structure, subject to further financial analysis.
• Financial modeling – we then develop a complex cash flow model (often 16 pages or more) that allows us to test various business decisions for both the franchisee and the franchisor simultaneously.
• Financial sensitivity analysis – we then test various alternative scenarios to determine the impact that each might have on both the franchisee and the franchisor before making the recommendations that will allow you to finalize your business decisions.

By following the steps outlined above, the business structure and franchising strategy that we ultimately recommend for our clients is based not only on best-practices in franchising and within the client’s industry, but also on a close examination of our client’s culture, goals, business economics, and the resources available to implement a franchise program.

To learn more about how this franchising strategy and business planning process can help provide you with your best chance of success in franchising,  contact us . Email us at  [email protected] , or call one of our consultants at  708-957-2300.   And be sure to  request our free video on How to Franchise Your Business  – which will go into greater detail on this important topic.

About The Author

Franchise Word Team

Is a seasoned franchise consultant and business strategist with a knack for uncovering lucrative franchise opportunities. With a rich network within the franchising community and a keen eye on market trends. We are trusted guide for entrepreneurs seeking top franchise opportunities. Providing timely updates on trends across various sectors including restaurants, fitness, retail, healthcare, and more. Franchise Word aims to help you make informed, profitable decisions in the evolving world of franchising.

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Your Company's Legacy is at Stake Without Succession Planning — Do These 8 Things to Secure Your Future. So much entrepreneurial effort goes into starting and growing a business, yet one of the most overlooked issues is keeping it going beyond the founder. This article delves into eight strategies you can leverage to plan succession for your company.

By Chad Willardson Edited by Micah Zimmerman May 15, 2024

Key Takeaways

• Effective business succession planning is not like writing your final chapter in the business book and closing the book, but more like preparing it for a sequel.
• By planning your exit as strategically as you led your entrance, you solidify your legacy and your business's future.

Opinions expressed by Entrepreneur contributors are their own.

So much entrepreneurial effort goes into starting and growing a business, yet one of the most overlooked issues is keeping it going beyond the founder . There are so many reasons it's not the top thing on a founder's priority list, and yet the saddest thing they'd never want to see is for all their years and decades of work to one day go down the drain.

Business succession planning is a process that ensures continuity beyond the founder's work life. This is part of a strategic plan for any forward-thinking leader who wants their clients, customers and team members to continue to thrive beyond their working life.

Business succession planning (BSP) differs from business to business depending on their size and their goals. Small businesses often have limited resources and are family-owned, which often entails changing the ownership and not just the leadership. With family-owned businesses, you face more than simple financial and business decisions because of the close relationships at home. For larger organizations with more complex structures and diversified workforces , the approach is usually very formal, involving a board of directors to identify the right fit for future leadership teams.

BSP may be a complex topic and endeavor, with a long list of considerations to ensure the vision and long-term goals of the business remain forward-driven. Regardless, here are eight tips you should consider.

Related: How Successful Entrepreneurs Use Doubt to Drive Growth

1. Align your succession plan with your goals

Knowing where you want to be 10 or 20 years from now is just as crucial as planning how to achieve it now. This is to ensure your business is headed in the right direction, with or without you in the picture. Think about whether you want to retire easily, knowing you've passed on the responsibilities to a trusted family member or a long-term executive. Or maybe you want to look into a merger with someone already succeeding in your industry. These decisions don't develop overnight, more so that they don't ripen in the next couple of years. Hence, gradual planning and assessments along the way are essential. Your goals may change, and so will your succession plan.

2. Define clear ownership roles

A common hurdle in succession planning is answering the question, "Who gets the keys?" Only this time, it's your business that's at stake. You have to identify key people who have the potential to take over or be a part of the leadership once you decide to exit or, worse, pass away. Create a clear roadmap of how you want to develop the skills of these people to hit the ground running and how decisions could be made in your absence. However, ensure that you keep everyone on the same page about ownership roles to avoid internal conflicts so the transition — before and after — is smooth. This is especially critical in a family-owned business; the clearer your ownership plan, the more likely there will be peace in your family once the transition begins.

Related: The 4 Roles of Accountability Within Your Company

3. Value your business, protect your assets

One of the most crucial aspects of BSP is getting a crystal clear picture of your business's value. This will guide you in strategizing the areas of estate planning or tax implications, as well as setting up potential buy-sell agreements. However, valuation is just the tip of the iceberg. You have to protect your assets and safeguard your intellectual property, which is the lifeblood of your business.

Additionally, make sure there's enough financial backing during the transition to support you and your successor. Your successor likely doesn't have the same level of financial resources as you do, and this is an issue to consider. Lastly, protecting your business relationships can greatly contribute to your success when future leaders take responsibility.

Related: 1 in 10 Leaders Say Succession Planning Is Not Worth the Time and Money It Costs — Here's Why They're Wrong.

4. Develop a comprehensive transition plan

Your company's game plan for a successful leadership transition lies in a detailed ownership and management handover. This should cover operational, legal, and financial changes and should have much of the plan in writing. This documentation should also include a comprehensive guide on how to overcome potential roadblocks, how to make decisions, who has votes, and what the transition process looks like. This will ensure that your business remains stable and your legacy intact.

5. Encourage open communication

Everyone involved should be in the loop. Create a space for open dialogue talking about their aspirations, concerns, and reservations. Share your vision and your goals for the future of your company. This initiative should establish a sense of ownership and buy-in for the plan.

This way, you can reduce resistance and cultivate a more collaborative environment that will make the transition easier and smoother. This strategy doesn't simply pass on information, but it helps create some engagement and helps them remain invested in your company's future.

Related: How to Communicate More Authentically and Effectively

6. Seek expert advice

Naturally, you may want to do everything alone in this succession planning journey. After all, you started the company, and nobody knows it better than you. But remember that you can only do so much on your own. It's tempting to do it all by yourself because you are more comfortable navigating and sharing confidential information. Still, you don't want to go rogue dangling on monkey bars without safety nets. Consult BSP pros or build your A-team experts. These advisors can help you navigate financial intricacies and legal frameworks more efficiently, with greater attention to identifying relevant regulations and potential hurdles.

7. Execute with a clear plan

A blueprint — your comprehensive transition plan — is not yet everything. Think of a "launch countdown" where milestones are clearly articulated within a specific timeline. Having a clear plan with timelines encourages accountability and progress toward your end goal. Assign ownership of specific steps and ensure you thoroughly review them regularly as a leadership team until you're confident that the transition will go smoothly.

8. Learn from successful examples

Many transitions and successions have succeeded in both small and large companies. Strive to learn by benchmarking your BSP with companies that have successfully executed theirs. For example, Microsoft transitioned from Gates to Ballmer . Ballmer has been with Microsoft for over two 20 years, which gives him an upper hand on the intricacies of the company's processes and day-to-day operations. He was an internal talent who the company supported and helped grow, which made the transition less risky and successful. Talk with other entrepreneurial peers and discuss what they're planning for their succession.

Effective business succession planning is not like writing your final chapter in the business book and closing the book, but more like preparing it for a sequel. While your approach will depend on the size and complexity of your business, proactive planning remains the core principle to ensure your vision doesn't fade with your exit. This may be 20 years away for you or only a couple of years in the future. Either way, keep your approach light and flexible while taking the process seriously, and don't hesitate to reach out to experts for additional guidance to ensure that your transition is smooth. By planning your exit as strategically as you led your entrance, you solidify your legacy and your business's future.

Entrepreneur Leadership Network® Contributor

Founder and President of Pacific Capital, and 4X Best-Selling Author

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Portland’s The Sports Bra plans national expansion through franchises amid booming interest in women’s sports

The Sports Bra founder and CEO Jenny Nguyen poses for a photo at the sports bar on Thursday, April 25, 2024, in Portland, Ore.

Jenny Kane / AP

On a recent weeknight at this bar in northeast Portland, fans downed pints and burgers as college women’s lacrosse and beach volleyball matches played on big-screen TVs. Memorabilia autographed by female athletes covered the walls, with a painting of U.S. soccer legend Abby Wambach mounted above the chalkboard beer menu.

The Sports Bra is a pub where women's sports are celebrated — and the only thing on TV.

Packed and buzzing with activity, the bar has successfully tapped into a meteoric rise of interest in women's sports, embodied most recently by the frenzy over University of Iowa basketball phenomenon Caitlin Clark's records-smashing feats.

Just two years after opening, the bar announced plans this week to go nationwide through a franchise model.

“Things have happened at light speed compared to what my forecast was,” founder and CEO Jenny Nguyen told The Associated Press. “This tiny spot that I built for my friends and I to watch games and give female athletes their flowers means so much more. And not just to me, but to a lot of people.”

Related: Fans gather in downtown Portland to cheer U.S. Women’s Soccer Team in World Cup

Under the plan, bars and entrepreneurs elsewhere will be able to apply to use The Sports Bra brand for their franchises. Nguyen is open to working with people who already have a physical space, as well as those who may only have a business plan. What matters, she said, is that the potential future partners share The Sports Bra’s values.

One aspiring partner is Jackie Reau, who hopes to open a franchise in Cincinnati, where she works as the CEO of a media and marketing agency. During an interview at The Sports Bra, where she happily watched her college women’s lacrosse team on one of the TV sets, she said such establishments “celebrate women’s sports and the champions and the athletes behind the story.”

“It’s exciting to see it grow and gain such popularity,” Reau said of the bar. “It’s just such a moment right now for women’s sports.”

Jackie Reau speaks during an interview with the Associated Press at The Sports Bra sports bar on Wednesday, April 24, 2024, in Portland, Ore. The sports bar plans to expand across the country through a franchise model. Reau, an aspiring partner, hopes to open a franchise in Cincinnati, where she works as the CEO of a media and marketing agency.

The expansion will be boosted by funding from a foundation created by Reddit co-founder Alexis Ohanian, who is married to tennis legend Serena Williams. Nguyen said she already has received hundreds of inquiries.

‘Pinnacle moment’ for women’s sports

Interest in women’s sports is at an all-time high, helped by Clark’s exploits this year, when she shattered all-time NCAA scoring records for women and men. The championship game between Iowa and South Carolina on April 7 drew 18.9 million viewers on average , surpassing the audience for the men’s title match for the first time.

A week later a record 2.45 million viewers on average tuned in to the WNBA draft to watch as Clark went to the Indiana Fever as the No. 1 pick . This week it was reported that she was set to sign a $28 million deal with Nike that would be the richest sponsorship contract for a women's basketball player.

The rise in interest is not just for women's basketball, but other sports as well. The 2023 Women's World Cup reported record attendance with nearly 2 million fans. A University of Nebraska volleyball game played in a football stadium drew more than 92,000 people last August, a world record for largest attendance at a women's sporting event.

“It’s sort of in this pinnacle moment where eyeballs are plentiful,” said Lauren Anderson, director of the Warsaw Sports Business Center at the University of Oregon. “It’s just been an alignment of many things that has created this incredible moment for women’s sports that seems to be more than just a flash in the pan.”

As the fan base and engagement grow, so too does the appetite for changing a sports bar culture that has traditionally catered to men's athletics. Other establishments like The Sports Bra have recently opened elsewhere: A Bar of Their Own began operating in Minneapolis earlier this year, and Seattle's Rough & Tumble launched in late 2022.

A customer looks at sports memorabilia at The Sports Bra sports bar on Wednesday, April 24, 2024, in Portland, Ore.

Making sports bars more welcoming for women

Sports bars have not always been welcome spaces for women, Nguyen said. A fan since childhood, she would gather groups of friends to go because she didn’t feel safe going by herself. She recalled encountering macho environments that made her uncomfortable, and bartenders who refused to change the channel to a women’s game.

“That was just what we settled with,” she said. “When I wanted to push back and kind of flip the status quo, that's when I really started to dig in on how The Sports Bra could matter and change the narrative on sports bars.”

One memory in particular stands out for Nguyen from her time as proprietor: Serena Williams' last match, in 2022. A massive crowd showed up to watch, spilling over onto the the sidewalk. People outside cupped their eyes with their hands as they peered through the windows to see the screens.

“When Serena would score a point, I swear to God, I thought the glass was going to shatter. My eyeballs were rattling inside my head,” Nguyen said. “And then when they were volleying, I feel like you could hear a burger flip in the kitchen.”

Related: Salem entrepreneurs test the limits of the Northwest’s passion for women’s sports

Toward the end, she felt tears welling up. She passed two tissue boxes around for similarly weepy customers as everyone reveled in Williams' last minutes on the court.

“I remember taking a deep breath and thinking, ‘I don’t know if there’s a single place on the face of the planet that is having this exact moment,’” Nguyen said. “It was amazing.”

Fans can still find it challenging to watch women's sports games, because many are not broadcast on TV and require different streaming subscriptions, said Tarlan Chahardovali, an assistant professor in the University of South Carolina’s Department of Sport and Entertainment Management.

Women's sports bars can be a reliable go-to for many events by having those subscriptions. But more broadly, Chahardovali said, much work remains to be done to ensure the media market doesn’t undervalue women’s sports.

“Today’s numbers are hard to ignore, and I think it’s a very exciting time,” she said. “But it’s a moment that needs to be maintained and sustained, and it needs continuous investment.”

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McDonald's franchise group slams California fast-food law as 'draconian'

Ab 1228 recently received approval from the senate and is likely headed for gavin newsom's signature.

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The National Owners Association called California’s recently-passed AB 1228 "draconian" and costly to franchisees in a memo distributed to its members.

"The new ‘AB 1228’ legislation has been voted into law and will result in a devastating financial blow to California McDonald’s franchisees at a projected annual cost of $250,000 per McDonald’s restaurant," the advocacy group representing some 1,000 McDonald’s franchisees said in the memo obtained by FOX Business. 

"These costs simply cannot be absorbed by the current business model."

CNBC earlier reported on the NOA memo. 

CALIFORNIA GOV. NEWSOM SIGNS LANDMARK FAST-FOOD WORKERS BILL, DESPITE CONCERNS IT WILL DRIVE UP COSTS

Among the bill's key components: 

• It would raise the minimum wage for fast-food workers to $20 per hour.
• It would apply to restaurants with at least 60 locations nationwide, except for restaurants that make and sell their own bread.
• It would also create a 10-person council to govern fast-food chains, set guidelines for wages and make recommendations pertaining to working conditions.

When signing the original version of the legislation, California Gov. Gavin Newsom said, "California is committed to ensuring that the men and women who have helped build our world-class economy are able to share in the state’s prosperity. Today’s action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry."

Gavin Newsom, governor of California, speaks during the United Nations Climate Action: Race to Zero and Resilience Forum in New York Sept. 21, 2022. (Michael Nagle/Bloomberg via Getty Images / Getty Images)

The state Senate passed AB 1228 Thursday. 

The NOA said franchisees, suppliers and McDonald’s "must engage to support our California McFamily " and identified steps it said they each should take with ideas ranging from the franchisees establishing 501(c)4 entities and state political action committees (PACs) to create an official arm to lobby the government. 

Suppliers urged the reduction of costs in operations that could lead to cost savings for fast-food restaurants they work with. 

The NOA called on McDonald’s to direct "rent and service fees collected from sales" from potential price increases in response to the bill to efforts like "overhauling" the operational platform and doing more labor-related research and development to help franchisees. 

In its memo, the NOA also made allegations about a "small coalition of franchisors" having "negotiated a deal with" the Service Employees International Union without franchisee involvement "causing the legislative outcome to now become certain." It mentioned McDonald’s, the National Restaurant Association and the International Franchise Association. 

The McDonald's logo at a restaurant in Streator Oct. 15, 2022.  (Jakub Porzycki/NurPhoto via Getty Images / Getty Images)

IFA CEO Matthew Haller told FOX Business he participated in the negotiations with a goal of making sure franchises had involvement and representation. Some franchisees spoke directly to the governor’s office, he added. 

FOX Business also reached out to the National Restaurant Association for comment.

"Over the past year, I've worked closely with company leaders, a task force of fellow franchisees and our own independent advisers as part of a coalition of brands working to protect our business model against an all-out attack on restaurant owner/operators," California McDonald's franchisee Roger Delph said in a statement to FOX Business. 

"Anyone who is suggesting this was not a collaborative and successful effort to protect the franchised business model in California, or that franchisee involvement was absent, was either not involved or is contorting the facts."

The NOA suggested AB 1228’s passage could lead to similar efforts by legislative bodies elsewhere in the country, adding, "We need to remain unified so that this can not gain a foothold anywhere else."

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In a recent internal message obtained by FOX Business, McDonald's told its restaurant system AB 1228’s terms "are entirely different" compared to the prior version of the bill that it described as "harmful to our system."

McDonald's Corp

It said AB 1228 created a "significantly limited Fast Food Council," did away with AB 257, prevented joint liability from getting applied to franchisors and franchisees, and made a "clearer, predictable wage schedule through 2029," among other things.

McDonald’s "worked tirelessly" with the "California Owner/Operator Task Force" and others in the state to "protect owner/operators’ ability to make decisions for their businesses locally and protect their restaurants and their crew," the company said in the message.

CALIFORNIANS PUT FAST-FOOD LAW ON 2024 BALLOT

Those included the creation of a "coalition of brands to refer AB 257 to California voters in November 2024" and "significantly" increasing its "political engagement in the state," according to the message. 

A sign is posted in front of a McDonald's restaurant April 28, 2022, in San Leandro, Calif.  (Justin Sullivan/Getty Images / Getty Images)

The company said it has established a "cross-function, fast-action team of McDonald’s staff as well as Owner/Operators from California, New York and Illinois, to co-invest and work collaboratively on an action plan." 

It will "pilot innovative short and long-term solutions" for California using best practices adapted from other places that have experienced similar legislation, according to the internal message. 

Jay Caruso contributed to this report.

Correction: An earlier version of this story misstated the council's authority regarding working conditions. It can only make recommendations for those. 

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New franchisees: rely on franchise support to adopt an entrepreneurial mindset.

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Paul Flick is the CEO of Premium Service Brands , a leader in home services franchise opportunities.

Franchise support helps new entrepreneurs overcome the challenges they encounter when they leave the structure of the corporate world behind and chart a new course for success.

Small businesses form the foundation of the American economy. There are about 33.2 million small businesses in the U.S., and 806,270 of them are franchises. The franchise business model enables new entrepreneurs to launch a business with a proven track record, brand recognition, training and ongoing support. For an initial investment and regular royalty fees, franchisees get a turnkey business to launch in their community.

A study from GOBankingRates found that 42% of Americans have considered starting a business, and a LendingTree survey found that 55% of Gen-Z and Millennials have a side hustle. But exiting the structured environment of the corporate world can be daunting. Having a network of franchisees to rely on for support can help streamline the process and put you on a path toward success.

I launched my first franchise business, 360° Painting, in 2005. Today, it has approximately 136 locations across North America. But the brand’s success did not happen overnight, and I encountered setbacks on my entrepreneurial journey.

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During my tenure in franchising, I’ve worked with countless new business owners. The top challenge I see them face is the transition from employee to owner. In the corporate world, employees have a defined structure and deliverables. Each day, you have a plan and someone overseeing your work. One of the perks of business ownership is the ability to chart a new course, but adjusting to the freedom can be challenging. You still need to get up every day and drive your business forward.

Here are some essential steps franchisees should take to overcome the hurdles of becoming a new business owner.

• Establish a business owner mentality: New franchisees often work both on the business and in the business. It’s important to think strategically to scale your business and delegate to handle day-to-day operations. Creating a business plan, setting clear goals and adopting a positive attitude can put you on the fast track to success.

• Choose the right franchise: A franchisor should be invested in your success. Ensure you’re partnering with a company that shares your vision and values. I recommend that every new business owner attend Discovery Day to meet the franchise support team and executive leaders. Being able to observe the corporate team in action can give you insights into how the company addresses concerns and supports its franchise owners. It's also important to conduct validation. Talk to franchise owners to learn about their experiences working with the franchise support staff. Find out the initial challenges they faced as new business owners and how they were able to find a path forward.

• Lean on your support system: One of the hallmarks of the franchise business model is the availability of a robust training and ongoing support system. Most franchisors offer initial training and guidance to get started. They stay up to date with industry trends and marketing strategies so you can focus on strategic growth. If one of our franchisees is struggling, PSB will send a professional from our support staff to their territory to provide on-site guidance and support, which can be invaluable for first-time business owners.

Even if you turn to franchising to launch a business, you’ll inevitably encounter other challenges. Franchisees face many of the same problems as independent operators, such as hiring and retention, funding and customer lead generation. Offering customers an in-demand service and relying on the support and training of an established brand can streamline your entrepreneurial journey and put you on track to achieve self-sufficiency and financial freedom.

Premium Service Brands is now the franchisor of nine home service brands, including 360° Painting; nurturing the determination and drive of our franchise owners enabled my company to become a driving force in the home services industry.

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Inside the Seattle Storm’s growth plan that led to a $151 million valuation

In 2018, after the Seattle Storm won their third WNBA championship in 14 years, the team’s three owners convened to discuss how they could accelerate the franchise’s growth. They had success on the basketball court and now wanted to follow up with more in business. But with the Storm still a few years away from their home at Climate Pledge Arena, the owners thought the better of it because of too much uncertainty ahead.

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After the Storm won another title in 2020, the owners thought the time was right to build for the long-term future. They decided a private practice facility would be their big investment. They sought out the real estate and priced out the cost — $64 million. Co-owners Ginny Gilder and Lisa Brummel provided some of the capital themselves, but they needed to secure a bank loan to pay for the rest. They decided it was also the moment to bring in more investors as a way to fund the facility. To do both, they needed to get their franchise appraised.

That was the genesis of what has been audacious last few months for the Storm, one that could reverberate around the league for years to come. This winter, they brought in 12 new investor groups, and broke ground on the Seattle Storm Center for Basketball Performance in March. The team is currently in the process of landing naming rights for the facility.

The equity sale was headed by Michelle Cardinal, a long-time media executive and the lead investor in this round. Gilder and Brummel stressed the diversity of the investors — 11 have at least one woman involved, 25 percent of the groups have at least one member who identifies as LGBTQ and a third have someone who identifies as BIPOC. Cardinal called it a “no-brainer investment,” she said in a statement through Gilder, citing the team’s fan base and the growth in WNBA viewership.

But the most eye-raising news was how much the franchise was worth — $151 million — and that Brummel and Gilder chose to publicize the amount. The two sold “ a very small entity” of equity in the Storm, Brummel said, and she and Gilder maintain “by far the majority share.”

“We’ve been public because we have something to be public about,” Brummel said in an interview with The Athletic . “We have a phenomenal organization, and we are incredibly successful as a team. So why not share with the world that here’s an example of what can happen in women’s sports when you run a team well, and you get some championships? So there is potential here. Part of this is not so much for the Storm brand — although we’re happy to have a light shined on it — it’s really to say, here’s a really tangible example of what can happen if you invest in women’s sports.”

It is the highest valuation of a WNBA franchise to date, significant not only for the Storm but also the WNBA as commissioner Cathy Engelbert drives the league towards expansion and level-setting the prices of its teams at new heights. WNBA franchise values have historically been a black box, an opaque data set even to industry experts. Numbers are hard to find when sales go through, unlike with other professional sports leagues, often because they are too small to parade. The Las Vegas Aces sold for a little over $2 million in 2021, league sources told The Athletic last year , and control of the New York Liberty swapped with little new money changing hands. The Wall Street Journal was the first to report the news of the Storm’s valuation.

Those transactions happened as former owners sought a way out; Seattle’s ownership has no interest in exiting and was able to sell from a position of strength. The Storm has been a model franchise in the WNBA, not only for its on-court success but also as a business. It is profitable, Brummel said, and puts that surplus back into the franchise.

When Force 10 Hoops — the parent company run by Brummel, Gilder, and co-owner Dawn Trudeau — bought the Storm in 2008, it set out with a deliberate mission of how to run the franchise. The long-term vision planned for a time like this, when they could sell some equity because they had made the team attractive enough to outside investors.

“We needed this to be a business, and part of being a business in America means that you can sell your business at the end of the day,” Gilder told The Athletic . “And if you can’t sell it, if there’s no value, there’s really no future for that business.

“Otherwise, you’re just relying on wealthy people’s charity, basically. ‘Oh this is a losing venture, I’ll cover it.’ At some point people get tired of that.”

The process of landing on a valuation for a WNBA team, however, is not simple. The easiest path is to use past sales as a comparable amount, but that information is scarce and hard to liken to the Storm. No team could offer a justifiable comparison. Many WNBA teams have been sold under duress, which kept values low; the Storm were not.

“There isn’t a model in the WNBA right now for valuation,” Brummel said. “There hasn’t been a team sold in a way that you would have a comparable, and those details certainly haven’t been public about the transactions that have happened. Needless to say, they were relatively low in value because of the situations the teams were in when they were sold. So it was an interesting journey to go back and forth, to really understand what the growth in the W could be.”

The Storm hired CAA Icon to run the process. Even as the values of sports franchises have jumped significantly in recent years, the most salient examples were outside of the WNBA. It is a boom time in the NWSL . A franchise like Angel City FC, which sells stakes at a valuation over $100 million, provides the most relevant comp, and leads the way in the rise of surging values for women’s sports franchises. The WNBA’s own capital raise, closed last winter, provided a strong data point as well.

There are also parallels to Major League Soccer and the position it found itself in roughly a decade ago, when revenues began to increase, expansion occurred, and the prospect of larger media rights fees were on the horizon. The MLS, Brummel said, might be the closest match.

“ It’s almost like MLS 10 or 15 years ago, where people saw the opportunity, and those that saw the opportunity down the road made the investments and did really well,” one industry source, granted anonymity so they could speak freely, said. “I think people are starting to see the opportunity in women’s professional sports and the WNBA in particular.”

The Storm’s owners hope they can serve as an example of the potential for riches in the WNBA.

Gilder says she believes an inflection point for the league was 2020, when its players and teams coalesced around social justice movements and were highly visible during its bubble season that summer and fall. It helped rebrand the WNBA and push it forward.

The league has tried to accelerate in the last few years. The capital raise brought in money the WNBA can use to build out new and larger revenue streams. This season, the league will play its largest schedule yet — 40 games. It signed a new TV deal with Ion last month, along with its preexisting contracts with ESPN/ABC and Amazon.

There is ample potential for women’s basketball. The women’s college basketball Final Four produced record viewership numbers, while Caitlin Clark and Angel Reese became household names. The 2024 draft class could be league-changing.

“All of a sudden the WNBA is running like a business, investing in itself for the first time since it was created back in the ’90s,” Gilder said. “And now people are interested and are realizing, wow, the profile of the league is growing. And now there’s this beyond that is what’s happening in women’s sports in general. So they’re all pieces of the puzzle if you will.”

That was part of the Storm’s pitch to investors. They sold themselves as a legacy brand with growth potential. The $151 million valuation proved there was not only interest, but the financial firmament to back it up.

“This is really probably the first time that any WNBA transaction has occurred where the owners didn’t have to sell anything,” Gilder said. “So right there this is a completely different situation. And for us, given why we bought the team and what we wanted to accomplish, getting the value out there bolsters the league, and I think the reason it’s happened now, is because the league itself has shifted from being in survival to being in growth mode.”

While the Storm’s valuation is record-setting, Brummel and Gilder expect that it will not last.

Investments in the league are increasing. The Aces just opened the first facility intended only for use by a WNBA team . The league’s next media rights deal awaits after the 2025 season. Expansion and a larger footprint loom.

Their intention in speaking openly about how much the Storm is worth is not only pride, but the hope that it will spur more money behind it.

“We want teams to best us,” Gilder said. “We want this to be the floor valuation. I want us to look back in four years and think, damn, we sold cheap. But that’s OK. Someone has to go first… We might be at the top right now and I don’t necessarily think we’ll stay there.”

(Photo: Steph Chambers / Getty Images)

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Mike Vorkunov is the national basketball business reporter for The Athletic. He covers the intersection of money and basketball and covers the sport at every level. He previously spent three-plus seasons as the New York Knicks beat writer. Follow Mike on Twitter @ MikeVorkunov