If you are planning to purchase and operate a franchise, you will need to prepare your business plan for a variety of reasons.
First, the franchisor you are planning to purchase from will require a business plan from you before they proceed with considering your application before awarding the franchise to you.
Secondly, if you are to need some fundraising to pay for the franchise and other startup expenses, you’ll need a business plan to be able to access loans or get investors to invest in your business.
Lastly, you will need a business plan to help in operating the new franchise. It serves as a tool guide that enables you to build a sustainable and successful business.
Criteria to consider before purchasing for a franchise
Before buying a franchise, you need to determine if it presents an excellent opportunity for you or will end up sinking your finances with no profit at the end of the day.
Here are some of the criteria you need to consider before paying the franchise fee:
Success
This criterion is most important when choosing a franchise. It’s like carrying out an industry and market analysis to see how successful the franchisor has been with the business since its inception.
Don’t jump on any franchise because the fee is cheap or the franchisor has promised to support you in every way. Make your research to know the history of the franchise in regards to revenue generation before proceeding.
Credibility
When trying to purchase a franchise, if you have any reason to doubt their credibility, then back out immediately.
If the franchisor refuses to give you a copy of the Franchise Disclosure Document (FDD) or for some reason refuses to disclose the responsibilities he or she would be providing for the franchise, then you need to let it go.
Uniqueness
What’s the value proposition of the franchise? How can the franchise differentiate itself from other similar products that will make consumers long after it?
You need to ensure that there is a feature you can capitalize on when mapping your marketing strategy.
Teachability
One of the reasons you’ll have to pay an upfront franchise fee and royalty payment is so the franchisor can provide training and support that will help you run the restaurant.
So before making that payment, ensure the franchisor has the ability and most importantly, the time to teach you the rudiments of the business.
Profitability
Will the franchise be able to bring in profits that can take care of your wages and still have a substantial amount remaining?
Don’t be in a hurry to purchase a franchise that you would forget to see how much revenue it generates as well as it’s financial forecast.
Affordability
Loving the franchise is not enough reason to purchase it. The question is, would you be able to afford it without spending every single dime on you? Do you need to get loans to be able to purchase it, and if yes, do you have means of getting the loans?
Before making a move to purchase a franchise, ensure you have information on the total cost of buying and operating it.
Researching before purchasing a franchise
Buying a franchise and operating it comes with its share of risk, which you must be aware of before proceeding to make a purchase.
According to a Wall Street Journal, it is better to buy a small or lesser-known franchise than going for the one everyone knows. The reasons are because:
- The franchise fees and royalties would be less expensive and negotiable
- Markets are more available
- Communication with the franchisor is more accessible and regular
However, before purchasing any franchise big or small, you must find out everything you need to know about it.
For example, you should know that one of the things a franchisor makes available to a potential franchisee in the US is a copy of the FDD which details everything about the franchisor history from the number of franchises operating to its financial position.
It also comes with the estimated cost of buying and maintaining the franchise, so the franchise has an idea of what the business entails.
You need to carefully review this document to see if it’s something you can operate without running into financial problems in the future.
Checking out other franchises
When reviewing the document, you’ll come across some franchisees contact, endeavor to talk to at least three of them to hear from their perspectives the challenges of running the business
Aside from reviewing the FFD, visit one of the franchises that are open and operating to see how they run their business.
Check the benefits of every fee you’ll have to pay for advertising if stated in the agreement. The franchisor might ask you to pay based on a percentage of your revenue.
While you should be passionate about running the franchise, find out how the franchisor is willing to help support in terms of training and other necessary aspects.
Immigration and Investor Visa Business Plans
Preparing a franchise business plan- Why you should use our services
Our consulting services can help you prepare the best franchise business plan that will give you a clear image of how to get the franchise to a stage where the revenue would be higher than the cash flow.
We would work with you to prepare a business plan that will put on display your skill set, background, and experience, which will show you will be efficient in operating the franchise.
We intend to show your franchisor, investors, partners, and even employees how much of a talented professional you are through your business plan.
The features of our franchise business plan include graphics such as images, tables, chart, and graphs.
We write a minimum of 15 pages for a business plan aimed at ensuring the readers have an in-depth understanding of what you intend to achieve with the franchise.
We will also include a financial section which provides for costs estimates and financial forecasting spanning three years or more.
We have developed business plans for many business franchises to suit the need of the individuals purchasing them.
Some needed the plan to meet with their franchisor while others required to secure a loan or attract investors to their business.
We prepare every franchise business plan to meet the specific needs of the individual, requesting it. We also ensure its flexible peradventure there is a cause for modification in the future.
You might be prepared for the franchising business, but you will need a franchise business plan to prove to your readiness to your franchisor.