Write a Franchise Business Plan in 7 Steps

Writing a franchise business plan follows many of the same steps as writing a traditional business plan, but with a few unique elements specific to franchising. Follow our step-by-step guide to learn more.

Why Do I Need to Write a Franchise Business Plan?

A franchise business plan is crucial for several reasons.:

Financing: Most likely, you’ll need funding to purchase the franchise, cover initial costs, or secure working capital. If you’re looking to secure financing from banks or investors, or an sba loan for franchising, they will likely request a detailed business plan. Lenders want to see that you have a clear strategy for making the business profitable and repaying any loans.

Guidance and strategy: Your business plan is a blueprint for your operations. It helps outline your goals, strategy, marketing plan, and how you plan to meet the franchisor’s requirements, ensuring you are on the right path from the start.

Goal setting: Writing a business plan forces you to think critically about your goals and how you will achieve them. This helps hold you accountable and set benchmarks for growth and profitability.

Risk management: The business plan reduces risks by helping to identify potential challenges and how you plan to address them. This allows you to spot any weak points and adjust before they impact your business.

The Steps

Now that you understand why a thoughtful, well-researched plan is important, let’s break down the process into manageable steps to create a meaningful and effective document.

1. Executive Summary: This section serves as a brief introduction that provides a high-level overview of your business. It should include:

• Your business concept and mission statement
• A concise description of the specific franchise you wish to invest in
• Key objectives (e.g., market penetration, profitability timelines)
• An overview of financial expectations, a summary of your funding needs, and your strategy for success

This section is important because it’s the first thing potential investors or lenders will read. Keep it clear, concise, and compelling. Note: while it appears first, it may be easier to write after you have completed the rest of your plan.

2. Franchise Description

While briefly introduced in the executive summary, this section should go into further detail about what your franchise does, the products or services offered, and the needs it will meet in your local market. Highlight the franchise’s established brand and reputation and explain why this brand will succeed in your specific location.

3. Market Research and Analysis

Understanding your market is essential to the success of any business. It also shows potential investors that you’ve really done your homework. This section should include:

• Target audience: Define your customer base, including demographics and buying behaviors.
• Competitive analysis: Research your competitors. Who are they, and how will you differentiate your franchise?
• Local market conditions: Assess local economic conditions, trends, and challenges, and how they might affect your business.

This part of the business plan will often require independent research, although your franchisor might provide some market insights.

4. Marketing and Sales Strategy

Explain how you intend to attract customers, promote your specific location(s), and build your business. This section should include:

• Marketing channels: How will you advertise—online, through social media, direct mail, or local events?
• Sales strategy: How will you convert leads into customers? Include promotional tactics and pricing strategies.

Many franchisors offer marketing support, so be sure to outline the resources they’ll provide and how you will leverage them.

5. Management and Operations Structure

Describe your franchise’s organizational structure and the team that will manage day-to-day operations. The operations plan provides a clear outline of the day-to-day activities involved in running your franchise. Key elements contain:

• Location and facility plan
• Staffing requirements and organizational structure
• Equipment and inventory needs
• Hours of operation

Franchisors often provide standard operating procedures (SOPs), so much of this section may come from the franchisor’s guidelines.

6. Products or Services

Reel investors in by describing the products or services offered by the franchise, which also includes:

• Supplier relationships: List key suppliers (this may already be defined by the franchisor). Does your franchise have exclusive or franchise-wide relationships with certain premium providers?
• Franchise products: Explain what differentiates your products from those of competitors. For a fast casual franchise like Teriyaki Madness, for example, highlight the superior ingredients you use that outmatch competitors.
• Pricing strategy: Include how you’ll price your products or services based on the franchisor’s guidelines and local market factors.

7. Financial Plan

This is arguably the most critical and scrutinized section of your business plan, particularly if you’re seeking financing. The financial plan should include:

• Start-up costs: List franchise fees, equipment, inventory, and other initial expenses.
• Revenue projections: Estimate your revenue based on realistic market data.
• Break-even analysis: Calculate when your franchise is likely to become profitable.
• Cash flow forecast: Provide an estimate of cash inflows and outflows for the first year.

Get the Support You Need with Teriyaki Madness

Like many successful franchises, Teriyaki Madness understands the challenges that new franchisees face when starting a business. We offer tailored support to help you create a winning business plan. From a detailed franchise disclosure document (FDD) to market analysis support, to proven operational guidelines, top-tier training and ongoing support plus much more, we know that our success is dependent on YOUR success, and we are here to be your biggest cheerleaders.

Learn more about what Teriyaki Madness has to offer, and why people across the country want to get in on the Madness. Download our franchise report.