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How to Create a Franchise Business Plan

A business plan is crucial when starting a franchise, so we take a look at the essential information you need to include so that you can secure a deal with a lender.

Starting a franchise is an incredible opportunity and business venture, so you want to ensure that you do everything you can for it to be a successful investment. Once you have decided the sector you wish to enter, such as coffee shop franchise opportunities here at Esquires Coffee, then it is time to work out the finances. Arranging and securing funding is an essential part of making your franchise successful.

In order to secure a deal with a lender, you must create a business plan. Lenders can use the business plan as a guide to what you are planning in order to be successful and more importantly to them, profitable. A clear and straightforward account of what the business will entail, such as the principals involved and a perspective of when you will be able to repay the borrowed amount, is essential information to a lender. Before the meeting with the lender, you should prepare a business plan and have a clear understanding of the point you wish to get across to them. Conduct the necessary research to back up your reasonings for wanting to borrow the money and explain why investing in the franchise is a profitable and beneficial move for the lender. For more information, take a look at our previous blog that explores seven statistics that show the growth of franchising in the UK as this could help you to direct and support your point. Your franchise will also help you with this. Indeed, here at Esquires Coffee, we have a network of trusted partners who can support you in writing a business plan.

A meeting between two people and writing notes

In this article, we take a look at the steps you should take to create a business plan that is perfect for convincing a lender and securing a loan. We take a look at what sections should be included in a business plan and what you should discuss in each segment.

Standard Structure of a Franchise Business Plan

There is a conventional structure to follow when writing a franchise business plan, and each section title can give you a good indication of what to discuss. You want to ensure that your plan is both detailed but to the point; this may seem conflicting, but you should provide the right amount of information without overcrowding and cluttering it.

Introduction

In this section, you want to provide the readers with a summary of the document and all the necessary details.

The Franchise

This is where you give an overview of what the franchise is and how you plan to run and manage it.

Business Structure

Here you should define the roles of the company and who will take care of each part of the business. You should explain who is responsible for each duty, whether the franchise will have a single owner or multiple, and whether or not you will be involved in the day-to-day operations.

What is the Product or Service

Go into further detail and describe what you are offering. Furthermore, you should explain why you believe it is the right time to venture into the product or service.

Market Analysis

Here you should showcase the in-depth research you have completed. Examine the market conditions and describe whether it is growing, who the competitors will be and also how future proof it is. Ensure that any data you collect and discuss are relevant facts and figures from reputable sources.

Statistics on a laptop

Operations

In this section, you should define the sources of supply, labour and materials for the franchise. In addition to this, you should mention the resources you will use to operate the business.

Marketing Plan

Here is where you will define your marketing objectives, such as the market share and number of sales, as well as where your product/service would be positioned in terms of categories such as quality and price. Furthermore, marketing communication should be covered and discussed, along with how you plan to distribute the product/promote the service.

Financial Projections

Perhaps one of the most important sections is the financial side of the franchise. Here, you should explain how you plan to finance the business venture, how much you will need to borrow and also how long you predict it will take to repay. You should also include profit and loss forecasts. Your franchisor may be able to provide further information on this, so it is worth getting in contact with them. You should include an exceptional level of detail in this section, as it is a crucial part of any business plan. For both aesthetics and professionalism, you should use graphs and charts to present your calculations.

Someone creating graphs and charts on a laptop

Appendix

Using an appendix is the best way to enhance your presentation as it is both organised and professional; two features you want to showcase to the reader. In this section, you should include any necessary and relevant information, such as media clippings, CVs of primary management personnel, tax returns etc.

We have provided you with a general structure of a business plan that is a perfect guide when writing our own. If you are interested in venturing into a new business and wish to open a franchise, please do not hesitate to get in contact with us here at Esquires Coffee! We are the UK's fastest-growing ethical coffee franchise, and we have over 40 stores across the country. Furthermore, we offer a bespoke solution for every franchisee’s needs, including full training, lease negotiation and consistent ongoing support. For more information on who we are and what we do, head over to our Facebook page or explore our Instagram.

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