How to Create a Franchise Business Plan

1
How to Create a Franchise Business Plan
Bio Link https//topfranchiseopportunities.wordpre
ss.com/2021/06/14/franchise-business-plan/
2
(No Transcript)
3
Both managers and founders regularly find it
difficult to draw up a franchise business plan in
practice. One of the reasons for this is that
many have no experience with it or have not yet
worked with it. This fails to recognize that
good plans are not characterized by the fact
that they correctly anticipate the future, but
rather by the fact that they give you the chance
to think through possible future scenarios in a
structured manner in advance. The following
article is intended to help avoid the most
serious mistakes when creating a franchise
business plan and, also, to provide concrete
support for the creation.
4
Why Is a Franchise Business Plan Important?
In practice, there has been a controversial
discussion about the meaning of business plans
for some time. The main argument against the need
for business plans is that a business plan or
planning is generally not useful in todays world
the future cannot be predicted anyway. This
fails to recognize that good plans are not
characterized by the fact that they correctly
anticipate the future, but rather by the fact
that they give you the chance to think through
possible future scenarios in a structured manner
in advance.
5
The franchise business plan was originally only
intended to convince investors to invest. But not
only venture capital investors, such as venture
capital companies and business angels, make their
investment decisions based on a business plan.
For traditional lenders, such as banks, the
business plan is an important decision-making
basis for granting a loan in addition to the
companys key figures. Also, franchisors usually
require a business plan from the franchisee
before moving ahead with the franchise basics.
Also, important business and cooperation partners
often expect a business plan.
6
In addition to an important document for external
stakeholders, a business plan is also useful for
internal purposes. For example, it can serve as
the basis for internal documents such as the
company presentation or the company manual. This
reduces duplication of work and inconsistencies.
7
The Scope Format of Franchise Business Plan
Immediately after the question of necessity, the
question of form and scope of the business plan
arises. There are no general answers to this, but
there are some guidelines.
8
The basic rule is that all information important
for the target group to assess a business must be
included. Everything else can safely be left out.
This means that the franchise business plan
should be as short as possible and as
comprehensive as necessary. From this, it follows
that the scope depends heavily on the specific
business model. Catchy business models, such
as those used in e-commerce, usually require less
explanation. On the other hand, technically
complex business models, such as in the areas of
artificial intelligence or Iot, usually require
more space for presentation.g
9
In this case, the classic franchise business
plan in a text document is usually also
suitable. In contrast to this, the presentation
so-called pitch deck has established itself
as a form of business plan for visual and catchy
topics such as games and media, or in the
start-up area. Companies usually do not have a
long history. Depending on the complexity, 10-15
pages are usually sufficient for presentations.
10
Structure of Topics of Franchise Business Plan
In terms of form and scope, the question arises
about the topics to be dealt with in the
franchise business plan. Although there is no
standard for franchise business plans, at least
the following topics are dealt with in practice
11
? Summary (Executive Summary) ? The business
model or corporate purpose ? Market
competition ? Marketing Distribution ?
Management employees ? SWOT analysis ?
Finances
12
Business plans of companies with a long history
often contain a chapter on company history. In
contrast to this, start-ups business plans often
contain a chapter that shows the implementation
of a roadmap for implementing the companys
development.
How Should A Franchise Business Plan Look?
The following brief illustration shows how the
individual topics are specifically dealt with in
the franchise business plan.
13
? The business model or company
Describe what the company offers and how money is
to be earned with it. Furthermore, statements
about where the company has sustainable unique
selling points.
14
? Market Competition
Presentation of the market potential based on
market volume, market growth, etc. Furthermore,
show how the company distinguishes itself from
the competition.
15
? Marketing Sales
Representation of the marketing and sales
process. Show how new customers are won and
existing customers are retained or expanded.
16
? Management Employees
Presentation of the company management or
managements professional and personal background
as well as the company organization.
17
? SWOT analysis
Presentation of the companys internal strengths
and weaknesses and the external franchise
opportunities and risks of the market in which
the company operates.
18
? Company history or implementation
Show which important milestones the company has
already reached and which milestones will be
reached in the coming years.
19
? Finances
Detailed presentation of the actual and planned
figures for the next three to five years and the
potential capital requirements and the use of
capital.
20
? Exit options
Show what option there is for a potential exit.
21
? Executive Summary
Brief presentation (maximum 1-2 pages) of the
business plans essential statements ideally
one section per chapter. This part should be
created at the very end.
22
The Common Mistakes of Creating a Franchise
Business Plan
Although the quality of business plans has
improved significantly in practice in recent
years, many business plans still have several
errors. The most common mistakes when creating a
business plan are ? Unsuitable scope Either
unimportant details, such as the generally known
definition or market developments, are presented
too comprehensively, or important information
such as the management or are missing from the
revenue model or are only treated superficially.
23
? Bad formal presentation The business plan,
like a companys website, is also a marketing
tool. Therefore, as with all important documents,
attention should be paid to an appealing and
error-free presentation. ? Incomprehensible
presentation Technical or complex issues are
presented too abstractly, or the reader is
expected to have expert knowledge.
24
? Unclear business model It is not clear enough
how the company makes or wants to make money. ?
Unclear unique selling points It is not pointed
out at which points the cafe franchise
differentiates itself from the competition. ?Prod
uct instead of customer The companys services
are presented too technically and too little from
the customers perspective.
25
? Sales process too abstract It is not shown in
detail how new customers are acquired, and
existing customers are retained or expanded. ?
Insufficient focus on management There is a lack
of detailed information on the background of
management. This point is of great importance to
external stakeholders especially startups and
small businesses.
26
? Unrealistic planning An overly optimistic
sales growth or an overly optimistic cost
development is planned. Time estimates for
important milestones such as RD or market
entry/penetration are often too optimistic. ?
Unrealistic financing The speed of financing
processes and the availability of investors are
overestimated.
27
? Inappropriate assessment ideas Excessive
assessment ideas are expressed in the business
plan. This point should, therefore, be left out
entirely in the business plan. Source
link https//topfranchiseopportunities.wordpress.c
om