Franchise Business Plan Template

Business Plan for Franchises

Franchise businesses are great in that they have much higher success rates than starting a business from scratch. If you want to start a franchise or expand your current one, you need a business plan.

The following business plan template gives you the key elements to include in a winning plan for your franchise business. It can be used to create a franchise restaurant business plan, a store franchise business plan, a startup business franchise or any other type of franchise business plan. In addition to this template, all franchise business plans should also include market research to help support the business opportunity and help craft your marketing plan and financial projections.

You can download our franchise business plan template (including a full, customizable financial model) to your computer here.

 

Sample Franchise Business Plan

Below is a franchise business plan example with each of the key sections to help you write a franchise business plan for your own company.

I. Executive Summary

Business Overview

[Company Name], located at [insert location here] is a new, upscale fast food restaurant focusing on providing organic, healthy and/or premium food and beverage products. Our product line fits nicely with health trends nationwide – as individuals are seeking healthier lifestyles complimented by natural, low-fat, and organic foods.

The Company plans to expand its restaurant locations into San Antonio and Fort Worth, TX next year. From there, management is seeking to open [Company Name] in eight more regions over the next five years.

The ultimate goal for the Company will be to manage 15 restaurants over the next five years. This includes domestic growth in the U.S. as outlined above, as well the development of new locations in Canada and Mexico.

The restaurant’s business model-menu, decor and service – will be replicated in each location to ensure consistency across the brand.

Products Served

[Company Name] will offer a concise, but varied menu of salads and sandwiches. All products will use 100% all natural and organic ingredients. Several products on the menu will be highlighted as being lower in fat, cholesterol, or sodium.

In addition to food items, [Company Name] will offer beer, wine, coffee, tea, and soft drinks.

Customer Focus

[Company Name] will primarily serve the residents within a 15-mile radius of our fast food restaurant. The demographics of these customers are as follows:

• 27,827 residents
• Average income of $74,700
• 58.9% married
• 49.6% in Management/Professional occupations
• Median age: 38 years

In addition to this prime adult demographic for an upscale and healthy fast food restaurant, there are five elementary school, a middle school, and a high school. This will make [Company Name] an ideal location for parents to spend time while waiting for their children or to bring their children to after school.

Management Team

[Company Name] is led by [Founder’s Name] who has been in the fast food restaurant business for 20 years. While [Founder] has never run a fast food restaurant himself, he has taught cooking classes at the local culinary institute for 20 years and has worked as a sous-chef at some of the most upscale fast food restaurants in the community over the past 10 years. As such [Founder] has an in-depth knowledge of the fast food restaurant business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• There is currently no upscale and healthy fast food restaurant in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.

• Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passerby’s each day

• The management team has a track record of success in the fast food restaurant business.

• The upscale and healthy fast food restaurant business is a proven business and has succeeded in communities throughout the United States.

• Market trends such as healthy and organic living support our business opportunity as well as growing awareness about the obesity epidemic and repercussions of non-nutritious eating

Financial Highlights

[Company Name] is currently seeking $370,000 to launch. Specifically, these funds will be used as follows:

• Store design/build: $250,000

• Working capital: $120,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

 

II. Company Overview

Who is [Company Name]?

[Company Name], located at [insert location here] is a new, upscale and healthy fast food restaurant focusing on providing organic and delicious foods to the local community.

[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the fast food restaurant business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented a fast food restaurant that enjoyed tremendous success. After several discussions with the owner of the fast food restaurant, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.

Specifically the customer demographics and competitive situations in the Fort Lauderdale location and in [insert location here] were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.

The Company plans to expand its restaurant locations into San Antonio and Fort Worth, TX next year. From there, management is seeking to open [Company Name] in eight more regions over the next five years.
The ultimate goal for the Company will be to manage 15 restaurants over the next five years. This includes domestic growth in the U.S. as outlined above, as well the development of new locations in Canada and Mexico.

The restaurant’s business model-menu, decor and service – will be replicated in each location to ensure consistency across the brand.

[Company Name]’s History

Upon returning from Fort Lauderdale, surveying the local customer base, and finding potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

[Founder’s Name] has selected three initial locations and is currently undergoing due diligence on each property and the local market to assess which will be the most desirable location for the fast food restaurant.

Since incorporation, the company has achieved the following milestones:

• Developed the company’s name, logo and website located at www…

• Created the menu

• Determined equipment and inventory requirements

• Began recruiting key employees with experience in the fast food restaurant industry

[Company Name]’s Products

Below is [Company Name]’s initial menu. All items will be 100% natural and organic. As you can see all items are classified under the following two main categories – Salads and Sandwiches

[Company Name] Initial Menu

Store Design

[Company Name] will develop a 5,000 square foot fast food restaurant whose key elements will include the following:

• Kitchen area
• Ordering counter
• Waiting area
• Tables to comfortably seat 50 customers
• Restrooms

The location has 40 dedicated parking spots which should suffice even in peak hours.

[Company Name] plans to be open 7 days a week, from 12PM to11PM. As demand dictates, we may extend or reduce our hours. Likewise, as demand dictates, we may offer delivery service.

 

III. Industry Analysis

The following industry size facts and statistics bode well for [Company Name].

The Chain Restaurants industry has experienced steady growth over the past five years. During the five-year period, as per capita income increased and unemployment declined, consumer confidence improved, giving rise to greater spending on sit-down meals. Although the average industry profit margin remains slim, profit margins at most chains have increased over the past five years, as revenue has grown and costs have been kept under control. As such, industry revenue is expected to increase at an annualized rate of 4.3% to $107.6 billion.

Full-service chain restaurants operate within the increasingly competitive food service sector. Major chains, such as Dine Equity Inc. (which operates Applebee’s and IHOP) and Cracker Barrel Old Country Store, compete against independent full-service restaurants, major fast food chains and a range of other eat-in or take-out establishments. Over the past five years, consumers have sought greater convenience at a lower cost, to the detriment of full-service establishments that serve sit-down meals. In response to greater competition, full-service restaurant chains have invested in labor-saving technology to cut down costs and have redesigned restaurant layouts to create a more modern ambiance.

Over the next five years, consumers will increase their spending at restaurants as the economy continues to improve and unemployment dissipates. However, increasing competition from a growing number of fast casual restaurants that serve high-quality food at reasonable prices and have business models that are not reliant on large overheads will continue to threaten industry profit margins. For this reason, major full-service restaurant chains will increasingly push operations abroad to emerging economies for growth.

 

IV. Customer Analysis

Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].

The area we serve is affluent and has an affinity to healthy and organic foods and beverages like we will be offering.

Customer Segmentation

We will primarily target the following four customer segments:

1. Soccer/stay-at-home moms: the town has a large population of stay-at-home moms who are active in the school and community. These moms often meet for lunch or coffee and [Company name] will provide a perfect place for them to congregate.
   1. We also expect mothers to take their children to [Company name] after school and for weekend snacks and meals.

2. Local office workers: approximately 5,000 individuals work in offices within a quarter mile of our location, and we expect a fair portion of these individuals to frequent us during lunch hours.

3. Students: there is a middle school and a high school in the town and the high school are within one half mile. Students from these schools will be targeted to frequent [Company Name].

4. Families and Couples: We expect couples and families to frequent our fast food restaurant and enjoy our dinner atmosphere.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following retailers are located within a 2-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Joe’s Tavern

Joe’s Tavern is the town’s leading local fast food restaurant and has been in business for 32 years. Joe’s offers a wide array of foods, with local bands as entertainment, and is a highly family friendly environment. .

Joe’s has an extensive menu, with some healthy options and some fried foods and bar favorites. While it has an established clientele, Joe’s Tavern does not differentiate itself as a healthy food choice.

Old Time Organics

Old Time Organics has been in business for 5 years. It offers a variety of baked goods, organic teas and coffees, and sandwiches served to-go.

While Old Time Organics’ food is entirely organic, they have a very limited selection of items and are not open for dinner. The location only has four sit down tables and is thus targeting to-go customers that are either stopping for a quick breakfast or picking up baked goods and coffee for work.

Freddy’s Deli

Freddy’s Deli is a recently opened fast food restaurant. It offers breakfast, lunch, and dinner and is open until 1am nightly.

[Company Name] has several advantages over Freddy’s Deli including:

• Freddy’s Deli does not offer products, including pastries, sandwiches, soups and more, made with organic ingredients

• Freddy’s has very little ambience and due to enormous portion sizes and low quality ingredients, the food is largely unhealthy

While we expect that Freddy’s Deli will continue to thrive based on its location and excitement about a new fast food restaurant, we expect that more and more customers will frequent [Company Name] based on the high-quality and organic ingredients we use and product selection.

Competitive Pricing

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• 100% Natural/Organic/High-Quality Ingredients: getting 100% Natural/Organic baked goods, soups, sandwiches and more in the local market is challenging and is being increasingly demanded by the local community

• Management: Our management team has years of business and marketing experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.

• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers and other influences. As such, it will be relatively easy for us to build branding and awareness of our fast food restaurant.

 

VI. Marketing Plan

You can download our franchise business plan template (including a full, customizable financial model) to your computer here.

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Offering organic, high-quality food items including baked goods, sandwiches, soups, salads and more

• Offering a convenient location that offers both eat-in or take-out options

• Providing excellent customer service

Promotions Strategy

[Company Name] expects its target market to be individuals working and/or living within a 15-mile radius of each of its store. The Company’s promotions strategy to reach these individuals includes:

Direct Mail

[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to frequent the fast food restaurant.

Public Relations

We will contact all local and area newspapers and television stations to tell them about the opening and unique value proposition of [Company Name].

Advertising

[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.

Sampling

[Company Name] employees will initially give free food samples to passerby’s to enable them to taste the quality of our products and learn about us.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.

Pre-Opening Events

Before opening the store, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.

Pricing Strategy

[Company Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the stores.

 

VII. Operations Plan

Functional Roles

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

• General & administrative functions including legal, marketing, bookkeeping, etc.

• Sourcing and storing ingredients

• Hiring and training staff

Kitchen Functions

• Food preparation

• Ongoing menu creation and modification

Fast food restaurant/Retail Functions

• Order taking and fulfillment (for take-out and dine-in)

• Customer service

• Janitor/maintenance personnel to keep the fast food restaurant clean

Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

 

VIII. Management Team

Management Team Members

[Company Name] is led by [Founder’s Name] who has been in the fast food restaurant business for 20 years.

While [Founder] has never run a fast food restaurant himself, he has taught cooking classes as the local culinary institute for 20 years. Two courses that he taught included:

1. How To Cook for Everyday Eating
   • This course was designed to give students an overall understanding of basic dishes that could be cooked for everyday healthy home-style meals

2. Vegetarian Cooking
   • This course was designed to give students an overall understanding of how to cook with the necessary vitamins and proteins needed to enrich a vegetarian diet without compromising on taste.

[Founder] has also worked part-time at fast food restaurants throughout the region. Specifically, he has worked for Giana’s Pâtisserie and Mike’s Place, where he was responsible for overseeing kitchen quality.

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Founder] will serve as the fast food restaurant manager. In order to launch the fast food restaurant, we need to hire the following personnel:

• Wait staff (4 full-time equivalents to start)
• Chefs (3 to start)
• Sous-chefs (2 to start)
• Assistant Fast food restaurant Manager (will manage cash register and other administrative functions)

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of natural and organic food products to its customers.

The Company will have dine-in, takeout, and possibly delivery systems to cater to a broad spectrum of customers in its target market.

The major costs for the company will be food production costs and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $370,000 to launch its fast food restaurant. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Store design/build: $250,000

• Working capital: $120,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement