The importance of your Franchise Development Business Plan
Professor Roy Seaman CFE explains the importance of developing a Franchise Development Business Plan and how it is essential to your business
Whether you are considering expansion of your business by franchising, have started to franchise your business or are an established franchisor, producing a Franchise Development Business Plan is essential. Not having such a document is like piloting an aircraft with no flightplan! An outline Franchise Development Business Plan will support your ideas for franchising and provide a clear idea of the infrastructure requirements that you will need to have in place before you bring on board new franchise owners.
Franchisors that have produced a Franchise Development Business Plan find that it helps them more than anything else to crystallise their thinking, so that they know exactly what they need to do on a week-by-week, month-by-month basis.
The first analysis that need to be performed in producing the document relates to discussing the best way to franchise your business. I have found that all businesses have two or even three different ways in which they can be franchised - when analysing why franchisors fail, it is often not because their particular product or service was not in demand, but simply that they chose the wrong method to offer the franchise to the market.
Once you have settled on the format of your franchise, it should be possible to map out the Franchise Development growth strategy and engage a team of professional advisors to ensure that you keep heading in the right direction.
Creating a franchise offer is entirely different to a normal trading activity in relation to your original business. Presenting your Franchise Development Business Plan will help you to explain this to your bank and other sources of funding. You may also need to consider setting up a separate company to mastermind your Franchise Development rather than place the responsibilities of developing a franchise within your existing company.
Time also needs to be taken to look closely at the financials and project the revenue streams for you as a franchisor, as well as for your franchise owners. It should detail a worthwhile reward for you in return for all of your activities as well as providing your franchise owners with an excellent return on their investment of time, ability and money. This analysis should also indicate if there is any risk of failure for you or for your franchise owners. There are considerable risks in expanding any business and in franchising your responsibility is to create a win-win strategy so that both you and the franchise owners succeed.
Should you decide that you would like to create your own Franchise Development Business Plan, there is a considerable danger that you will not only overestimate, but not understand all of the areas that need to be addressed. In reality it takes about three years for a franchisor to fully understand everything about creating and operating a successful Franchise Development programme. There is no substitute for real experience so I would always advocate calling in professional advisors who with at least 10 years of practical experience of helping companies to succeed as a franchisor.
Creating an outline Franchise Development Business Plan takes around four weeks to complete. This is a speciality of Franchise Development Services and we would be pleased to discuss how we can best assist.