How Franchising Works

Creating a Plan

Most likely, when you set out to buy a franchise you will need a business loan of some sort. To get a business loan, you will also need a business plan. Writing a business plan for a franchise, however, is slightly different from writing one for your own new business startup. Not only do you have to detail the business strategy and projections of the franchise, you also have to detail the reasons why you are qualified to run the business.

While the franchisors may provide some assistance in helping you get the financing you need, they probably won't provide much in the way of helping to write a business plan. This is because they can't take the liability risk of helping you make projections on sales. If those projections fall short, there is the chance of a lawsuit. You may be provided with a template for a business plan, but this is usually provided after you have signed the agreement and gone into their training program. The template will still not provide any information about projected financial information.

That leaves you doing as much research into the market, and particularly the competition, as you can. Visit How Business Plans Work for some advice and assistance in writing a complete business plan.

Some of the differences you'll have to adjust for include building the franchise fee, royalties, advertising fees, and other franchise-related payments into the financial documents. Your accountant should be able to provide valuable assistance in this area.