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Franchise Business Plan Template

Written by Dave Lavinsky

Franchise Business Plan Outline

• Franchise Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Start Your Franchise Plan Here

Franchise Business Plan

You’ve come to the right place to create your business plan.

We have helped over 10,000 entrepreneurs and business owners with how to create a franchise business plan to start or grow their franchises.

How To Write a Franchise Business Plan & Sample

Below is are links to each section of a franchise business plan example to help you start your own franchise business:

• Executive Summary – This section provides a high-level overview of your business plan. It should include your company’s mission statement, as well as information on the products or services you offer, your target market, and your business goals and objectives.
• Company Overview – This section provides an in-depth look at your company, including information on your franchise’s history, franchise business model, ownership structure, and management team. You will also include a copy of your franchise agreement.
• Industry Analysis – In this section, you will provide an overview of the industry in which your franchise will operate.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your franchise from the competition.
• Marketing Plan – In this section, you will detail your marketing strategy, including your marketing initiatives and promotion plans. You will also discuss your pricing strategy and how you intend to position your own business in the market.
• Operations Plan – This section will provide an overview of your store’s operations, including your store layout, staff, and inventory management.
• Management Team – In this section, you will provide information on your management team, their experience, and their roles in the company.
• Financial Plan – This section includes your company’s financial statements (income statement, balance sheet, and cash flow statement). It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is a franchise business plan.

A business plan is a plan to start and/or grow your franchise. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your business plan using our Franchise Business Plan Template here .

What Are the Main Types of a Franchise?

About any type of business can be franchised. Franchises are categorized according to different factors like investment level, franchisor’s strategy, business operations, and marketing and relationship models. The most common types of franchises are job franchise, product or distribution franchise, business format franchise, investment franchise, and conversion franchise.

What Are the Main Sources of Revenues and Expenses for a Franchise?

The main source of revenue for a business franchise are franchise fees and royalty fees. Some also earn from other fees like distribution fees, site assistance fees, training fees, technologies, and rebates.

The key expenses for franchises are inventory, payroll, marketing and advertising, rent and loans.

How Do You Get Funding for Your Franchise?

Among the most common sources of funding for a franchising business are commercial bank loans, Small Business Administration (SBA) loans, personal savings and friends and family loans/gifts. There are also lenders that can supplement other loans with equipment financing and business lines of credit for franchise businesses.

This is true for a business plan for a franchise restaurant, a business plan for franchise store, or any other franchise business plans.

Where Can I Get a Franchise Business Plan PDF?

You can download our free franchise business plan template PDF here . This is a sample franchise business plan template you can use in PDF format.

Franchise Business Plan Template

If you want to start a franchise business or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their franchise businesses.

Below are links to each section of your franchise business plan template:

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is the easiest way to complete my franchise business plan.

Growthink's Ultimate Franchise Business Plan Template allows you to quickly and easily complete your Franchise Business Plan.

Where Can I Download a Franchise Business Plan PDF?

You can download our franchise business plan PDF template here . This is a business plan template that will help you with how to create a franchise business plan in PDF format.

What Is a Franchise Business Plan?

A business plan provides a snapshot of your franchise as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why Do You Need a Business Plan for a Franchise?

If you’re looking to start a franchise or grow your existing franchise you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your franchise in order to improve your chances of success.    Your franchise business plan is a living document that should be updated annually as your business grows and changes.

What Are the Sources of Funding for a Franchise?

Franchises are usually funded through small business loans, personal savings, credit card financing and/or angel investors.

FRANCHISE BUSINESS PLAN OUTLINE

• Franchise Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan
• 10. Appendix
• Franchise Business Plan Summary

Start Your Franchise Plan Here

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Franchise Business Plan: How to Effectively Write One

You’ve probably heard the saying, “If you fail to plan, you plan to fail.” If you are thinking about entering the world of franchising, you first need to craft a solid business plan.

A business plan is a formal written document that outlines your goals and describes how you plan to achieve them, while allowing for potential challenges you may encounter. In other words, your business plan acts as a GPS for your entrepreneurial journey, helping you anticipate roadblocks and detours as you move forward toward your destination.

How is a Franchise Plan Different?

A franchise business plan incorporates elements specific to the franchise model. This includes details about franchise fees, royalty payments, marketing and advertising support from the franchisor, training and operational guidelines provided by the franchisor, and the rights and obligations of both the franchisee and franchisor. Additionally, the franchise plan often references the franchisor’s track record, brand recognition, and established business model, leveraging these as strengths in the plan.

When Should I Write My Franchise Business Plan?

Once you’ve done your research and decided which franchise opportunity you’ve going to pursue, it’s time to write your plan. It’s important to have the plan in place before you sign the franchise agreement. At this stage in the game, a well-crafted plan shows the franchisor that you understand the business and are committed to operating the franchise successfully. If you intend to seek financing to buy your franchise, lenders will want to see the plan to assure them of your profit potential. Your plan needs to include the amount you want to borrow, how you’ll use the funds, and the preferred terms of the loans.

How to Craft an Effective Franchise Business Plan

Here are the elements you should include in your plan:

• Executive summary: Begin with a concise overview of your franchise, including the business concept, financial features, and what sets your franchise apart.
• Business description: Delve deeper into the specifics of the franchise. What services or products will you offer? Who’s your target market?
• Market analysis: Research your industry, market size, and local competition. Understand the trends and growth patterns in your sector.
• Management structure: Detail the organizational structure. Who will manage daily operations? How many employees do you plan to hire?
• Marketing and sales strategies: How will you attract and retain customers? Outline your advertising, promotions, and sales tactics.
• Financial projections: Provide a forecast for the next three to five years. Include projected income statements, balance sheets, cash flow statements, and capital expenditure budgets.

The U.S. Small Business Administration  has a more detailed list of items you might want to consider including in your business plan.

How Franchisors Can Help

Established franchisors can be an invaluable asset when it comes to writing your business plan. You can use them as a resource for data on market trends, customer demographics, and historical financial performance of existing franchise units. The franchisor may even provide you with a plan template tailored to their specific business model.  However, it’s essential to remember that while a franchisor can provide guidance, customizing the plan to your specific location, market conditions, and personal goals is your responsibility.

Franchising with Home Franchise Concepts

In business for more than thirty years, Home Franchise Concepts knows the importance of a robust business plan and can guide you through the intricacies of creating one for any or our ten premier home services brands: Presently, Budget Blinds®, The Tailored Closet®, PremierGarage®, Concrete Craft®, AdvantaClean®, Kitchen Tune-Up®, Bath Tune-Up®, Two Maids®, Aussie Pet Mobile®, and Lightspeed Restoration™

We understand that many potential franchisees are new to the world of business, so we are happy to answer your questions about how to become a franchise owner .

Contact Home Franchise Concepts Today

Writing a business plan might seem daunting, but with the right support, it becomes a rewarding process. And with a partner like Home Franchise Concepts by your side, you’re equipped with the tools and insights to create a plan that not only impresses lenders but also sets you on a path to achieve your entrepreneurial dreams. To get started, simply contact Home Franchise Concepts today.

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Franchise Business Plan

You’ve finally decided to own a franchise business. Excellent. Entering a marketplace full of competitors and big industry names might seem overwhelming. However, a well-crafted business plan can provide a roadmap to success.

Are you looking to start writing a business plan for your franchise business? Creating a business plan is essential to starting, growing, and securing funding for your business. So we have prepared a franchise business plan template to help you start writing yours.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write a Franchise Business plan?

Writing a franchise business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the entire business plan is ready. Here are some components to add to your summary:

Start with a brief introduction:

Market opportunity:, mention your product or services:, management team:, financial highlights:, call to action:.

Ensure you keep your executive summary concise and clear, use simple language, and avoid jargon.

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2. Business Overview

Depending on your business’s details, you’ll need different elements in your business overview. Still, there are some foundational elements like business name, legal structure, location, history, and mission statement that every business overview should include:

About the business:

Provide all the basic information about your business in this section like:

Product distribution franchise

Management franchise, business format franchise.

• Company structure of your business , whether it is a sole proprietorship, partnership or something else.
• Location of your business and why you selected that place.

Mission statement:

Business history:, future goals:.

This section should provide an in-depth understanding of your business. Also, the business overview section should be engaging and precise.

3. Market Analysis

Market analysis provides a clear understanding of the market your business will run along with the target market, competitors, and growth opportunities. Your market analysis should contain the following essential components:

Target market:

Market size and growth potential:, competitive analysis:, market trends:, regulatory environment:.

Some additional tips for writing the market analysis section of your business plan:

• Use various sources to gather data, including industry reports, market research studies, and surveys.
• Be specific and provide detailed information wherever possible.
• Include charts and graphs to help illustrate your key points.
• Keep your target audience in mind while writing the business plan.

4. Products And Services

The product and services section of a franchise business plan should describe the specific services and products that will be offered to customers. To write this section should include the following:

List the services:

• Create a list of the products or services your franchisee will offer. For example, if you own a fast-food franchise, you may include a menu description, pricing strategy, and specific services like takeaway, home delivery, drive-through facility, etc.
• Describe each service: Provide a detailed description of what it entails, the time required, and the qualifications of the professionals who will provide it. For example, a Visual Merchandiser is responsible for creating attractive and effective displays in a clothing franchisee.

Emphasize safety and quality:

Overall, a business plan’s product and services section should be detailed, informative, and customer-focused. By providing a clear and compelling description of your offerings, you can help readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Develop your unique selling proposition (USP):

Marketing strategies:, sales strategies:, customer retention:.

Overall, your business plan’s sales and marketing strategies section should outline your plans to attract and retain customers and generate revenue. Be specific, realistic, and data-driven in your approach, and be prepared to adjust your strategies based on feedback and results.

6. Operations Plan

When writing the operations plan section, it’s important to consider the various aspects of your business processes and procedures involved in operating a business. Here are the components to include in an operations plan:

Hiring plan:

Operational process:.

• For example, McDonald’s has strict SOPs covering everything, including strict procedures for cooking, assembling, and packaging food, handling customers, and maintaining a clean environment.

Equipment & Technology:

By including these key elements in your operations plan section, you can create a comprehensive plan that outlines how you will run your business.

7. Management Team

The management team section provides an overview of the individuals responsible for running the operations. This section should provide a detailed description of the experience and qualifications of each manager, as well as their responsibilities and roles.

Key managers:

Organizational structure:, compensation plan:, board of advisors:.

Describe your franchisee’s key personnel and highlight why your business has the fittest team.

8. Financial Plan

When writing the financial plan section of a business plan, it’s important to provide a comprehensive overview of your financial projections for the first few years of your business.

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:, financing needs:.

Remember to be realistic with your financial projections and provide supporting evidence for your estimates.

9. Appendix

When writing the appendix section, you should include any additional information that supports the main content of your plan. This may include financial statements, market research data, legal documents, and other relevant information.

• Include a table of contents for the appendix section to make it easy for readers to find specific information.
• Include financial statements such as income statements, balance sheets, and cash flow statements. These should be up-to-date and show your financial projections for at least the first three years of your business.
• Provide market research data, such as statistics on the size of the industry, consumer demographics, and trends in the industry.
• Include any legal documents such as permits, licenses, and contracts.
• Provide any additional documentation related to your business plans, such as marketing materials, product brochures, and operational procedures.
• Use clear headings and labels for each section of the appendix so that readers can easily find the information they need.

Remember, the appendix section of your franchise business should only include relevant and essential information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This franchise business plan sample will provide an idea for writing a successful franchise plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready franchise business plan to impress your audience, download our franchise business plan pdf .

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Frequently asked questions, why do you need a franchise business plan.

A business plan is an essential tool for anyone looking to start or run a successful franchise company. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your franchise business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your franchise business.

How to get funding for your franchise business?

There are several ways to get funding for your franchise business, but one of the most efficient and speedy funding options is self-funding. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Angel investors – Getting funds from angel investors is one of the most sought options for startups.
• Small business grants – there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your franchise business?

There are many business plan writers available, but no one knows your business and idea better than you, so we recommend you write your franchise business plan and outline your vision as you have in your mind.

What is the easiest way to write your franchise business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any franchise business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Build a Comprehensive Franchise Business Plan

The franchising industry has never been as diverse and dynamic as it is today. Millennial business leaders have charged into the sector, bringing creativity and strategic integrity along for the ride. While 44% of franchisors are Baby Boomers, innovative business technology has reinvented the way we think about franchising. Automation has not only changed the way franchisors do business with end users, but also the way brands connect with and train their franchisees. E-commerce has leaked into the sector, bringing globalized trade with it. Multi-unit structures still dominate, but fresh approaches to business models are adding some zest to the cocktail. Customer relationship management (CRM) and logistics systems are increasingly being used to streamline everything from marketing to warehousing. In the new decade, every inch of business movement will be measured, analyzed, and streamlined, and that leads to one thing: profits. CRM will get your business moving from the first letter of your franchise business plan until your ultimate exit.

Building a Franchise Business Plan that Assures You of Success

The brave new world of franchising demands more from your business plan than ever before. It’s not easy to set up a franchising model scalable enough to cover international markets and digital demographics. Your franchising model must cater to local and national markets without ruling out global ones. It must trade in the brick and mortar space, yet develop thrust in the digital marketplace as well. Your growth strategy needs to build a detailed route into your future, and your model is the foundation that will keep your path from crumbling as the decades pass. When you take your successful business into the franchising sector, you need to create a completely new business unit and plan.

In essence, franchising is a pivot from selling a product to selling a business concept. Your success no longer ends with you. You can only be profitable if your franchisees are profitable, but your fees, commissions, and structure weigh heavily on your revenue, too. How will you break even? How will you assure your recruits of grand success? How will you ensure that your product and brand remain consistent across thousands of units? Your franchise business plan will answer these questions.

Executive Summary

Your executive summary is a brief overview of your plan that’s intended to captivate funders and lenders. Think of it as a cross between a miniature business plan and a pitch deck. It should outline a clear business strategy through both data and substance.

Franchise Introduction

Your franchise introduction is potentially the last thing your potential investors will read about your franchise, so it needs to be compelling. It’s typically a three-page management overview of your franchise covering your business goals, description, and justifications for franchising your business. Include your profit milestones, competitive differentiation, and geographical considerations. The rest of your franchise business plan will pull apart all of these numbers in greater depth.

Franchise Description

This is your opportunity to express your vision. Your description includes your formation data, founders, markets, and location. If you’re franchising an existing business, your description should also outline your current pre-franchised business’ achievements.

SWOT Analysis

A franchise business plan isn’t just a dedication to everyone who might invest in your vision. It’s also an opportunity to tighten your own intentions. Your SWOT analysis will serve you more than it does your funders, but it’s integral to your competitive edge. It should include your brand’s strengths, weaknesses, opportunities, and threats, both in terms of your brand and whether franchising offers its best chance of success. Your SWOT positions you in the market alongside your rivals, so it will tell you if you need to pivot or diversify yourself before you launch. The market research you collect will unveil the fundamental problems that could annihilate your dream. 

Product or Service Description

While the product your franchise sells matters, don’t neglect your new product: your franchise concept. Your product description should outline your development stage, pricing strategy, and any research and development you intend to do in the near future.

Marketing Plan

Business concepts can’t grow legs without a marketing strategy . Odds are excellent you’ll need to redraft your marketing approach entirely when you franchise an existing business, including key market and industry analysis for both your brand and franchise concept. Automation and machine learning can generate the data that will fuel this part of your franchise business plan. It might be tempting to start fantasizing about grand creative campaigns at this point, but flights of fancy will lack weight if they aren’t hooked into information. Even the most rudimentary research costs an average of $20,000 , but there are two cheaper and more effective solutions: automation and machine learning. An AI-based CRM will send your forecasting to new heights, helping you to draft consumer profiles to fuel your ultimate marketing strategy.

Royalty Fees

Your royalty fee structure determines how sustainable your franchise will be. It covers your running fees while providing one of your core regular income sources. Your choice of fixed or percentage rates can mean the difference between firecracker profits and a monthly slog, but set it too high and you risk chasing away recruits. CRM software will do the number crunching on your behalf, running as many simulations as you need to find a reliable structure.

A Financial Forecast

The quality of your financial projections will determine how seriously your investors will take you, so make it count. Your franchise business plan is nothing more than a concept until you flesh out the forecasted numbers. This is the psychic of your plan, and it doesn’t always bring good news. It might convince you not to go into business at all. The deeper you dive, the more accuracy you’ll gain. Your forecast will include profit and loss, balance, and cash flow sheets, but don’t let those terms trap you in an accounting mentality. It’s intended to tell you where you’re going, not where you’ve been, so your calculations will be quite different. A forward-looking view defines your first and last moments as a franchisor. As such, it helps you to create your exit plan.

Planning for Your Exit

As important as it is, many entrepreneurs don’t have an exit strategy . If your franchise agreement and roll-out plan are the hors dóevres of your franchise business plan, your exit strategy is the dessert. This is your opportunity to reap rewards, but it’s a part of your meal and needs to be planned for from the beginning. No matter how tempting it is to reach beyond the “buy, build, sell” mentality, every investment needs to be parted with. Building in a way that supports an impressive valuation has its own rewards, and they arrive in cold, hard profits. Franchisors sell their franchises for many reasons. Retirement, fresh opportunities, and simple profit drive are three of the most common, and they may ultimately push you into a sale. Even so, it’s unwise to swim out into a lake if you don’t know its length, otherwise you risk drowning.

If you’re ready to leap into a great business opportunity from the beginning, you’ll gain control of the resale process. A formal exit plan is best drafted with the guidance of an attorney or accountant who is qualified to juggle the taxation issues relating to your sale and transfer of ownership. Your strategy should include a primary exit goal detailing who you expect to sell to and when. You needn’t make an absolute exit. Many franchisors take on an advisory role instead. Finally, you’ll need to list the actions you need to take to achieve your exit valuation. 

Building Multiple Franchise Units Simultaneously

When Ray Kroc transformed McDonald’s from a neighborhood store into a global legend, he had a thousand dreams about taking the concept to the entire world, but one dream ruled them all: the desire to create a burger recipe that could be repeated customer after hungry customer without losing any quality. Once he’d struck beefy gold, his next dream was to do it repeatedly across franchises. To achieve that, he decided to start small. He built uniform systems to cover everything from his first unit’s administration to its management style and trademark. Only once he’d achieved that did he roll his business out to franchisees, and his slow, steady work was the reason for its resounding success. Today, it’s also the reason new franchisors use the Ray Kroc roll-out strategy.

Your initial roll-out of franchise units is, in many ways, the toughest educational experience you’ll ever face. Your learning curve will be more of a vertical line than a slope, and no amount of research will teach you all you’ll need to learn. This is something you must learn in practice, and there are a myriad ways to approach the challenge. One of the simplest is to avoid it entirely by building a single flagship unit before attempting a wider roll-out. This way, you can flatten the curve and pay closer attention to the tiny details that will one day characterize your brand. It will also allow you to recruit potential franchisees through a living business concept—and nothing is quite as convincing to recruits as legitimate sales figures and a queue of passionate customers.

A slow network roll-out lets you nurture your first recruits and solidify their success. When you aren’t juggling 20 units at once, you have the time to turn your franchise business plan into a living, breathing organism with its own marketing materials, logistics strategies, and on-boarding tactics. Each of your first franchises will need to be within driving distance to one another, but when you’re working with a new brand, your client base won’t be large enough to warrant a unit on every street corner. Slow market penetration should, however, lead to fast diffusion and adoption, but no strategy is completely airtight. You’ll experience lower profit margins initially but will be less likely to shoot holes in your brand identity.

Synuma can increase your diffusion rates and ramp up your profit margins by automating the rollout process. Why do it the Ray Kroc way when you can enjoy all the benefits without the drawbacks? This intelligent software will improve your decision making and let you shrug off many of your responsibilities by handling repeatable tasks in a standardized way. It will support your initial franchisees and offer you a more hands-free management process.The Development and Operations Modules won’t require you to develop your own systems, but membership gives you access to potent development tools that will support your roll-out where it counts for you. This is, after all, a unique brand that should be guided by your own values and priorities. Nobody ever achieved grand dreams by fitting inside someone else’s cookie cutter. Your roll-out plans will be very different if you’ll be relying on CRM software, so bear it in mind when you write your franchise business plan.

Lead Qualification

Franchising is one of the best growth strategies in the business world, but it’s not fail-proof. Living on the cusp of your own growth curve requires a powerful lead qualification strategy that will identify the recruits who will serve your brand profitably. One bad choice and you can send your business into a PR crisis that travels halfway across the world in a day’s worth of social media posts. Every unit you open requires a considerable investment of time and money, but reps consider lead qualification to be their greatest challenge . CRM software has become innovative enough to tell you which leads are engaged, which are merely curious, and which fit your target market like a second skin. The days when you had to qualify your leads over the phone are over. Machine learning and automation will handle the process while you’re on the road to meet your first franchisee—no independent research necessary. CRM technology generates an average return of $8.71 per $1 spent : a growth rate that increases exponentially when you’re selling franchises rather than products. Factor it into your franchise business plan, and you’ll draw a far more compelling picture for your investors and potential recruits.

Avoiding Fraudulent Business Practices

In 2018, several franchisees took their Vision Express franchise to court for coercion. The claimants felt they had been pushed into signing their franchise agreements—a claim the court found to be credible. The case highlighted the fact that not all contractual exclusions are enforceable. The franchise sector marches in lock-step to a huge array of regulatory confusion, and both franchisors and franchisees must overcome it. Drafting a tight franchise agreement is no solution. Fairness and truth must prevail. Vision Express misrepresented their franchise in three areas :

The likely profits of each store

The ratio of eye tests and glasses sales

The overdraft repayment period

Ignorance is no excuse for misrepresentation, so the drafting of your agreement is one of the most complex tasks you’ll ever complete. In short, your projections, metrics, and other calculations need to be on point from your very first franchise business plan. Any sales process is weighted with risk, but franchising is particularly challenging. You can mitigate your risk through liability exclusions and boilerplate limitations, but inaccurate numbers will leave you floating out in space with no gravity to hold you down.

Not all sales fraud occurs after the point of purchase. Misrepresentation can sneak into the recruiting process as well. All in all, your FDD must cover several core facets under federal law. They are:

Background data about you as a franchisor

History of litigation

Clients and territories

Ongoing costs

Financial statements

Initial and long-term costs

Transparency and honesty are more than mere values. They’re required by law, but cost estimates are difficult to build if you’ve yet to open your first few units. This is where AI and machine learning come in. They can help you to flesh out the bare bones of your future in a transparent and reliable way.

Most businesses wait six years before rolling out their first franchise unit, but with the power of AI and automation, you can leap ahead of your own curve and tweak its growth to your own strategy. Once you’ve perfected your first roll-outs, machine learning will nudge it towards success one improvement at a time. Every franchise launch will be a learning process that makes the next launch smarter and more profitable thanks to data collection and analytics.

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How To's

7 key elements of a good franchise business plan.

Writing a business plan is essential for any entrepreneur. However, creating one for a franchise business is different from another business type. You have to be aware of the needs of the franchisee and the franchisor. Once you have signed the franchise agreement , the franchisor will provide you with a marketing plan and other related materials. Below are the seven essential elements of a successful franchise business plan.

1. Executive Summary

This section summarizes the entire franchise business plan, including the key points and objectives. As it explains your business, the executive summary should answer these questions:

• Which product, service, or need does your business provide? 
• Is your business unique? 
• How will you guarantee your company’s success? 
• What skills do you possess that will help you achieve your objectives?

As the first part of the plan, it should leave a positive impression of you and your business to your readers. In short, it’s a written version of your business pitch. That said, the executive summary section should clearly define your business and lay down everything that makes your business proposition unique. 

2. Franchise Description

The following section presents the description of the franchise business model. This section should contain the following:

• Company Structure
• Mission Statement
• Fiscal Projections

Although you don’t need to provide detailed financial data, you should include an overview of your business, financial projections, and critical business facts. Likewise, you should share the goals and objectives for your business with your readers. Ensure your business goals are quantifiable and avoid vague terms that will only confuse your readers.

3. Market Analysis

The third section provides a detailed analysis of the industry and market trends. To analyze your competitors in the business, you need to do the following steps:

• Select ten direct and indirect competitors for comparison.
• Research their marketing strategies and product features.
• Compare the gathered details to business data. 

4. Marketing Strategy

You should also write a detailed marketing plan that includes market research, marketing goals, pricing strategies, advertising activities, and sales forecasts. This section will discuss your plan for implementing the said strategies and activities. You can use the information from the franchise training or the detailed information stated in Item 11 of the Franchise Disclosure Document .

5. Operations and Management

This section highlights your business’s strategy for maintaining a customer base and demand for your franchise business. You need to explain how you plan to advertise, your current advertising, and the background of your strategy. It also highlights the daily operation of your business. It covers the business operations and emphasizes the franchise owner’s responsibilities and tasks. This section also includes the company’s staffing, logistics, and solutions to potential challenges during the business operation. 

6. Financial Plan

The financial plan includes projected revenue, expenses, profits, and cash flow for the first few years of the franchise operation. If you’re starting your business with a franchisor, you can reference your Franchise Disclosure Document for this information. 

7. Pro Forma

You should also add a pro forma that focuses more on the three main accounting statements, such as the balance sheet, cash flow, and profit of loss. You can create your pro forma by following these steps:

• Create a chart of accounts.
• Calculate your business projected income.
• Project your liabilities and cost.
• Estimate cash flows

Consider talking to an accountant or financial advisor to confirm your estimates and validate your proposal to lenders or investors. 

Appendix (Optional)

Technically, the appendix is separate from the business plan but an additional section to present items that would enhance your document. Include items necessary to give the lender or investor a complete view of your franchise business. For example, you can include the resumes of management team members, tax returns, media clippings, etc.

A franchise business plan is a critical piece in accessing capital. A well-crafted business plan helps the franchise to clearly define the objectives, strategies, and techniques for a successful business operation. Also, this document allows entrepreneurs to identify potential risks and challenges associated with the franchise operation. It provides methods for mitigating or managing those risks. More importantly, this plan helps reduce the possibility of financial losses or other adverse outcomes for the franchisee. We hope this guide will inspire you to start drafting a detailed plan for the franchise business you have in mind now.  

Remember to continually update your business plan to reflect your business’s developing needs. At the minimum, it should be updated when something in your business changes.

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The Rise of Paris Banh Mi Franchise

Are you gearing up for a new business in 2024? Forget the next big tech start-up -the latest trend in town might be a perfectly toasted baguette. Take Paris Banh Mi Cafe and Bakery, for instance. This Vietnamese sandwich shop is rapidly growing, with locations popping up from coast to coast, from California to Florida. 

But what’s the secret behind their success? Explore why the Paris Banh Mi franchise has snowballed in the last two years and be inspired to start your own business .  

About Paris Banh Mi

The French baguette was introduced in Vietnam in the mid-19th century when the country was still a part of French Indochina. In the 1950s, Saigon saw the birth of a unique Vietnamese sandwich, “bánh mì,” which quickly became a favorite food of a large part of the population.

The story of Paris Banh Mi started in Orlando, Florida, at 1021 E Colonial Drive in 2019. Hien Tran and Doan Nguyen , a married couple passionate about food, opened the first Paris Banh Mi location. Their concept was simple: bring the delicious flavors of Vietnamese banh mi sandwiches, traditionally baguettes filled with savory meats and pickled vegetables, to a broader audience. 

The customers quickly fell in love with the fresh ingredients, bold flavors, and convenient fast-casual setting. Now,  Paris Banh Mi Cafe and Bakery promises to bring their customers the best “Baguette Banh Mi” taste.

In just two years, the laid-back cafe and bakery in Florida multiplied into a chain of stores in the  county. Today, Paris Banh Mi is serving customers in 46 locations all across the USA . The company plans to expand to 100+ locations by 2026. 

Each Paris Banh Mi Cafe and Bakery has a clean and spacious dining area, fast service, friendly staff, and a selection of delicious food and pastries. Take a peek at some of their mouth-watering baguette sandwiches filled with authentic Vietnamese ingredients.

Source: Paris Banh Mi website

For those craving something sweet, the bakery indulges you with a variety of French pastries. Check out their sandwiches, pastries, and beverages on the Paris Banh Mi Cafe and Bakery menu page.

Why Own a Paris Banh Mi Franchise

Paris Banh Mi is a franchised quick-service restaurant offering exciting opportunities for aspiring business owners. Many nail salon owners and aspiring entrepreneurs are switching to buying a Paris Banh Mi franchise. The main reasons why they love Paris are:

• It opens a great opportunity and is more profitable. 
• Seamless franchising process and fewer things to worry about
• Required low capital to open
• Higher end-of-year profits

The benefits extend beyond operational efficiency. Paris Banh Mi boasts a surprisingly low-cost entry point compared to other franchises. 

The initial franchise fee is manageable at $60,000. The total investment for opening a Paris Banh Mi can range from $200,000 to $500,000. This amount reflects the option to acquire a pre-existing, equipped location (second generation) for a lower investment cost or a complete build-out from scratch option. 

Regardless of the chosen route, the investment is significantly lower than that of building a business from the ground up, making Paris Banh Mi an attractive option for many entrepreneurs.

Licensing Information

Owning a Paris Banh Mi franchise is not just about delicious food! The company is looking for dedicated individuals who can run their restaurant full-time. They will provide a multi-day training program for new franchisees. In addition, Paris Banh Mi offers ongoing support for franchisees, guiding them to make informed decisions and thrive in this exciting industry.

You’re a good fit for a Paris Banh Mi Cafe Bakery franchise if you are: 

• Passionate about food, especially fresh baguettes and pastries
• A self-starter with a proven track record in business
• Financially responsible with a focus on results
• Ready to fully commit to building the Paris Banh Mi brand

If you have what it takes, don’t hesitate to contact them through the franchise hotlines on their franchise opportunities page . 

Buying a restaurant franchise is one of the most attractive routes in the world of franchising. Paris Banh Mi makes owning your own business a lot easier. Forget the high costs and headaches of starting from scratch. Their low investment and comprehensive training program mean you can be your own boss with a delicious product.  If you are ready to take a bite out of success, contact Paris Banh Mi today!

Chick-fil-A Franchising Opportunities in 2024

Buying a franchise from Chick-fil-A is an excellent money-making and healthy option. The fast-food chain has been serving hungry consumers the most delicious chicken sandwiches unmatched by other fast-food restaurants. Buying a Chick-fil-A franchise means investing in a good business and your future. It also lets you continue the culture behind the popular food chain. Here are Chick-fil-A franchising opportunities that will give you entrepreneurial freedom in 2024. 

Company Overview

Founded in 1946 by Truett Cathy, Chick-fil-A is deemed one of the longest-running chicken sandwich chains in the United States. The founder opened his first chain in Hapeville, Georgia, and has become a favorite soul food for many. Truett had worked in restaurants seven times a week and knew the importance of rest. That’s why he vowed to close Chick-fil-A every Sunday. He values rest and worship, so he sets aside one day of the week for his employees—a practice that Chick-fil-A still upholds today. 

Chick-fil-A also selects franchisees that uphold their values and passion. The company takes great care in selecting who they do business with, which includes getting to know candidates through a lengthy and intensive selection process. The founder’s vision is to influence the people and communities they serve. Chick-fil-A also seeks franchise candidates in Puerto Rico, Canada, and the United States. 

Chick-Fil-A candidates are required to show personal financial integrity and stewardship. They also need to have proven experience in leadership and a strong business acumen. Chick-fil-A ensures that candidates showcase entrepreneurial spirit, a strong character, and a growth mindset. This is to uphold the vision and values that Truett started in 1946. 

Franchise Training Details

• The initial on-site training programs last three to four weeks. However, the duration and actual location of the training will vary. 
• The training program primarily covers operational aspects, such as food preparation, service, customer relations, accounting, communications, purchasing, planning, maintenance, policies, management styles, and marketing. 
• The franchisor may require franchisees to attend various conferences and seminars occasionally. This is on top of the initial training program.
• The franchisor may also offer various programs that operators can use in advertising products or hiring staff, which aren’t stipulated in the Franchise Agreement. 

Franchise Territory

• The franchisor will grant franchisees one Chick-fil-A restaurant at the franchisor’s designated location. 
• Franchisees will not get exclusive or protected territory, so they may face competition from other operators. 

Franchise Obligations and Conditions

• Franchisees must devote their time and effort 100% to operating their Chick-fil-A restaurant. 
• The franchisor only allows franchisees to sell products approved by Chick-fil-A. This also applies to franchisees with a Chick-fil-A-associated food truck. 

Franchise Term and Renewal

The franchise term expires on early December 31, the year the agreement is signed or whatever the lease expiration is. Franchisees may apply for one-year extensions unless written notice is given 30 days before the franchise term expires. 

Financial Assistance

• The franchisor designates locations, leases, and subleases the store’s premises to franchisees. The lease and sublease terms will vary depending on the type of Chick-fil-A restaurant and location. 
• The franchisor also engages in concession agreements that oversee the utilization of non-traditional satellite unit locations with the proprietors or administrators of said satellite unit spaces.
• The franchisor offers extended payment periods for specific pre-opening costs stipulated in the Franchise Agreement. Additionally, the franchisor leases equipment to operators, charging a monthly rental fee based on the fair market rental value established by Chick-fil-A using its singular and exclusive business judgment. It’s important to note that neither the franchisor nor any affiliated entities provide any financing arrangements to operators, either directly or indirectly.

Did You Know?

Here are some fun facts about Chick-fil-A you need to know!

• Did you know that Chick-fil-A only uses peanut oil for frying? That’s what makes the chicken its unique flavor! Chick-fil-A is also the single most significant purchaser of peanut oil in the United States. They also believe peanut oil is a healthier option.
• The best Chick-fil-A promotional gig was the “First 100,” where the first 100 customers inside a new Chick-fil-A restaurant would get free chicken for a year. 
• Did you know that the founder, Truett Cathy, invented the chicken sandwich? He worked for a restaurant in Atlanta, and the newly delivered chicken breasts were too big to serve as airline food. He turned this into a meal for the staff. 
• You can get a free ice cream cone by walking up to the counter and trading your toy when ordering the kid’s meal. 

Franchise Cost

Your investment.

Here are the Chick-fil-A franchise costs:

If you’re looking for another investment opportunity, visit Franchise How’s website for more information. 

Zoom Sewer and Drain Cleaning Franchise Cost

Taking care of your home’s plumbing system is an essential part of being a homeowner. However, not everyone has the skill and patience to do it, and so franchises such as Zoom Sewer and Drain Cleaning are some of the most lucrative. Here’s what you need to know if you’re thinking of getting it:

Franchise Description

Zoom Sewer and Drain Cleaning provides drain cleaning, maintenance, sewer inspections, repair and replacement services for residential and commercial customers. The business began in 1995 and had been franchising since 2013. They have their headquarters in Norristown, Pennsylvania, and Zoom Franchise Company, LLC is the franchisor.

Training for the franchisee’s principal owner and personnel will be provided by the franchisor or its representatives and agents. Before starting your franchise, Zoom Sewer and Drain Cleaning will require you to complete their training program. It comes in two phases:

• Phase 1: 2 to 3 days training at the Franchise Business
• Phase2: 2 to 3 days in Norristown, PA

The franchisor may also require you to attend additional training during the length of your term agreement. The franchisor is planning to hold a 2 to 3-day national Zoom Fest yearly. This will be held in Norristown, PA, or any location it designates. They will require franchisees to attend, but their managers will be welcome.

The franchisor will designate a protected territory where the franchisees will operate their business. Before signing any Franchise Agreement, both the franchisor and the franchisee will agree on a geographic territory. 

The franchisor will base the protected territory on contiguous zip codes that will consist of approximately 500,000 individuals. This will be based on the most recent U.S. Census data at the time of signing the franchise agreement. This means that as long as the deal is taking effect, the franchisor or its affiliates will not locate, operate, or grant a franchise for another Zoom Sewer and Drain Cleaning business within the protected territory.

Obligations

The franchisor requires the franchisee or its principal owner to exert every effort to take responsibility for the management of the business. They will do this on a daily basis unless they agree on an alternate arrangement. With the franchisor’s discretion, the franchisee can hire a manager to handle the operations of the business.

Franchisors will also require you to sell products and services that have their approval. On the other hand, franchisees aren’t allowed to sell unauthorized products or services in compliance with the franchise agreement. Franchisees are also not allowed to solicit business outside of the protected territory. They are, however, permitted to serve customers outside of the protected territory as written in the FDD.

Term of Agreement

The initial franchise will take ten years after the signing of the agreement. You can renew the contract for another ten years, for four times, if you continue to meet the requirements.

Zoom Sewer and Drain Cleaning doesn’t offer direct or indirect financial assistance to its franchisees. In addition, they will not guarantee a franchisee’s note, lease, or obligation.

Get to know more about Zoom Sewer and Drain Cleaning before you get that franchise. Here are some facts about the business:

• They have very little competition in the niche. Most of their competitors are independent plumbers and contractors
• According to the company’s co-founder and COO, Ellen Rohr, this is a recession-resistant business, and the Covid-19 pandemic has proven this
• They have a reported $12 million in revenue with 53 employees and 15 franchisees 

The table below shows the estimated cost of a Zoom Sewer and Drain Cleaning franchise. Take note that these numbers may change without any prior notice.

Other Costs

For other franchising information, check out more articles here at Franchise How !

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How to Start a Franchise

9 min. read

Updated January 5, 2024

Franchising offers a pathway to business ownership that takes advantage of a proven idea and strong brand. You lose some autonomy and control—but get to work from an established playbook, learn from a successful franchisor, and, most notably not have to start a business from scratch .

So, is becoming a franchisee the best way to start a business? 

Learn how to choose and start a franchise that fits your interests.

• What is a franchise?

A franchise is a business owned by an individual (franchisee) but branded and supervised by a larger company (franchisor). Common examples include Subway, 7-11, and Hilton Hotels. 

Purchasing a franchise grants you the right to use a tested business model, pricing, products, and marketing strategies. 

Additionally, franchisees gain access to the company’s trademarked materials like logos and slogans—essential for establishing a brand identity.

• How to start a franchise

While you get to bypass idea creation , customer validation , and brand development —there are still critical steps unique and similar to starting any other business.

1. Know your budget

There is always an upfront franchise fee, and franchisors often have financial requirements for potential franchisees. For example, some franchisors require franchisees to have a particular net worth.

Review your finances and assets to look for opportunities in line with your price range. Determine how you’ll finance the franchise, whether through personal savings, bank loans, or franchisor financing options.

2. Do your research:

You don’t want to waste time dreaming up your plans to open a specific franchise only to look at the fine print and realize it’s not a good fit.

For example: A Cafe Yumm franchisee must have a net worth of $500,000. If that isn’t where you’re at financially, look elsewhere.

Contact a current franchisee to learn more about the business if you can. What are their perceived pros and cons? What’s it like working with this brand? Are there any significant costs associated with this franchise?

Additionally, you need to check if a franchise is already running in your area. If so, the franchiser may be unlikely to approve another location in such close proximity. 

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3. Participate in an interview

A unique aspect of starting a franchise is that it’s not entirely up to you. You have to interview, almost like you’re applying for a job.

The format will depend on which franchiser you choose. The goal will be for you and the franchisor to review the specifics and determine if the franchise is right for you. 

Take note of how much support the franchisors offer during setup and if they provide ongoing training.

4. Write a business plan

A benefit of starting a franchise is that many important aspects are well-established. However, you still need a business plan to cover how you will run your business, forecast sales and expenses, and outline employee needs.

Most importantly, you need a thorough market analysis that shows how this franchise will work in your local market. At a minimum, you need to detail who your target customers are and how they relate to or differ from the current franchise customer base. Luckily, most franchises offer assistance with this part of the process.

Check out our business planning hub to learn more about writing a franchise business plan .

5. Choose a suitable franchise location

Selecting a location can be complicated by specific requirements from the franchise owner. Size, setup, and even the atmosphere surrounding the business may limit your options.

Then, you must consider if the location makes sense from a performance standpoint. 

• Is it going to attract your core customer base? 
• Is there enough foot traffic?
• Is your business easily accessible?

Hopefully, the franchisor will assist in this process. If not, check out our complete guide on selecting a business location for more specific steps.

6. Sign the franchise agreement and review the FDD

Before you sign a binding contract outlining mutual obligations between you and the franchisor—you need to review the Franchise Disclosure Document (FDD) document. 

The FDD contains a wealth of information, including:

• The franchisor’s background: History, business experience, and any litigation or bankruptcy history.
• Financial statements: Provides a clear picture of the franchisor’s financial health.
• Initial and ongoing costs: Details about the initial franchise fee, training costs, grand opening costs, royalty fees, and other related expenses.
• Training and assistance: Information on the training and support the franchisor will provide.
• Franchisee obligations: What is expected of the franchisee in terms of purchasing equipment, maintaining standards, advertising, etc.
• Territory: Whether the franchisee will have exclusive rights to a territory and the specifics of any territorial protection.
• Trademarks: Information about the franchisor’s trademarks, copyrights, and proprietary information.
• Renewal, termination, and transfer: The terms under which the franchise relationship can be renewed, terminated, or transferred.
• List of current and former franchisees: Contact information for current franchisees and those who have left the system recently.
• Earnings claims: If provided, details about the financial performance of existing units, though not all franchisors include this information.
• Restrictions: Details on any restrictions on what can be sold, sourcing and supply, and territory.

Before signing the FDD, review it carefully, preferably with the help of a lawyer . 

7. Make your business legal

Aside from the franchise agreement and FDD, additional legal requirements exist to start your franchise.

• Set up a business structure: The franchisor may specify which business structure you must use.
• Federal and state registrations: At a minimum, you must apply for federal and state tax IDs. However, there may be additional requirements depending on your location.
• Business licenses & permits: Depending on the location and nature of the franchise, various local, state, or federal licenses and permits may be required.
• Tax registrations: Franchisees must register for appropriate federal, state, and local tax identification numbers and comply with tax obligations.
• Insurance requirements: Franchisees often need various insurance coverages, such as liability, property, workers’ compensation, and more, as mandated by law or the franchisor.

8. Stay updated on franchisor policies

Most franchisors provide training programs for new franchisees that cover everything from business operations to customer service.

However, this initial training may not cover everything, and franchisors may update their policies, marketing strategies, or product offerings. 

Staying aligned with these changes ensures brand consistency and can impact the franchise’s success.

Dig deeper:

Should you open a franchise or start a business?

If you’re reading this, you’re likely more interested in opening a franchise than starting a new business. To be sure of your decision, let’s weigh the pros and cons of both options.

Things to consider when comparing franchise opportunities

Choosing the right franchise can be as challenging as developing a good business idea. Simplify the process and use these seven factors to help vet and select the right franchise.

History of franchising

Become familiar with how franchising has evolved into the business model it is today.

• Common types of franchises

Franchising spans a wide range of industries. While there are countless specific franchise concepts—you can group them into several common categories:

Food and beverage 

Establishments that prepare and serve meals and drinks, ranging from quick-service to full-service dining.

• Fast-food restaurants (e.g., McDonald’s, Subway)
• Sit-down restaurants (e.g., Applebee’s, IHOP)
• Coffee shops (e.g., Dunkin’ Donuts)
• Ice cream and dessert parlors (e.g., Baskin-Robbins, Dairy Queen)

Businesses that sell goods directly to consumers from physical locations offering a variety of tangible products.

• Convenience stores (e.g., 7-Eleven)
• Specialty stores (e.g., The UPS Store, GNC)

Franchises providing specialized services to individuals or businesses—emphasizing expertise or personalized care.

• Home services (e.g., Molly Maid, Mr. Handyman)
• Automotive services (e.g., Jiffy Lube, Midas)
• Health and fitness centers (e.g., Anytime Fitness, Gold’s Gym)
• Educational services (e.g., Kumon, Sylvan Learning)

Business-to-Business (B2B)

Franchises that cater to other businesses, offering services that enhance business operations or efficiency.

• Printing and promotional services (e.g., Minuteman Press, FastSigns)
• Professional consulting and coaching (e.g., ActionCOACH)
• Commercial cleaning (e.g., Jan-Pro, Coverall)

Real estate

Operate in the property market, assisting in buying, selling, or leasing properties, with a focus on market expertise.

• Coldwell Banker

Franchises that provide accommodations for travelers, including hotels and motels, emphasizing comfort and amenities.

• Hilton Hotels
• Marriott International
• Holiday Inn

Personal care

Focus on enhancing appearance and well-being, offering services like grooming, beauty treatments, and wellness.

• Hair salons (e.g., Great Clips, Supercuts)
• Spas and beauty treatments (e.g., Massage Envy)

Centered around leisure and entertainment, providing venues or services for relaxation and fitness.

• Children’s entertainment centers (e.g., Chuck E. Cheese’s)
• Fitness and recreational sports centers (e.g., Planet Fitness, Club Pilates)

Cater to niche markets or unique services not covered in other categories, such as specific demographics or specialized needs.

• Pet services (e.g., Petland, Dogtopia)
• Restoration and disaster recovery services (e.g., SERVPRO)
• What franchise should you choose?

It can be quite challenging to choose a franchise since there are over 3,000 different concepts available. 

How do you narrow it down to one? Here are three tips:

1. Figure out what you’re good at

While you’re not coming up with a business idea , you can still use the same tactics to identify a winning franchise opportunity. The easiest place to start is by identifying and listing out your skills, strengths, and passions.

Maybe you’re a relationship-builder, an operations expert, or already have experience working with a franchise. 

If you’re struggling to identify what you’re good at, consider conducting a SWOT analysis on yourself. This will give you a structured way to assess your strengths, weaknesses, opportunities, and threats.

2. Match your skills to franchise opportunities

Use your skills as a reference when exploring franchise opportunities. Remember, you must be a good match for the franchise owner. 

Having industry-specific experience or skills can help sell them on your ability to run their specific type of business.

For instance, if you’re drawn to a commercial cleaning franchise because it’s B2B and aligns with your sales skills. 

3. Keep an eye on market trends

Be vigilant about consumer and business trends to ensure your franchise choice is relevant.

Take note of popular opportunities, but don’t jump on them immediately. Do your due diligence and determine if the franchise trend is sustainable and not a fleeting fad.

As always, fall back on market research to understand consumer spending habits. If the franchise category you’re interested in shows customers straying away from known brands—it may not be the right time to jump in. 

• Start your franchise

Cooking up a brand new business idea has its value, but there’s no reason you can’t piggyback on a time-tested method and reap the benefits—as many franchisees are already doing today. 

If you’re interested in buying a franchise to start or run your own business, learn all you can before you buy.

With planning and thoughtful execution, a franchise business can be just as rewarding as any other startup.

Check out our complete guide on starting a business to ensure you’re prepared to open a successful franchise.

Clarify your ideas and understand how to start your business with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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How to Create a Franchise Business Plan

When you start any business, including a franchise , it is important to think ahead. And, developing a business plan is a crucial part of any venture. Entrepreneurs that want to succeed or secure financing for setting up a franchise have to think about all aspects of future business in order to be ready for any challenges that may come their way. If you outline a franchise business plan, you will be better prepared for operating your enterprise and making it a successful venture with a promising future. With franchising most of the work is laid out for you. Franchisors share a business model and marketing materials with their franchisees, and most financial information is drawn up in the FDD. However, it is still sensible and essential to develop a franchise business plan that is more detailed and well-thought-out. Below you will see some of the most important business aspects that entrepreneurs need to think of in order to create a good franchise business plan.

Market Research

Acquiring a franchise is an investment that comes with some risks. When you consider purchasing a certain franchise, it is essential to research whether its offerings will be in demand in the marketplace you desire to operate in, whether there are competitors with similar offerings, and what reputation the franchisor has in a certain region. Thoroughly analyze the market that you wish to enter, so you know what to expect in terms of demand, customer flow, and possible growth opportunities. When you clearly see the market potential and its possible downsides, you will be prepared for any challenges that you may face.

Franchise Concept

It is important to have a detailed description of a franchise concept. Usually, this kind of data is disclosed in the franchise agreement. It includes the creation story of the company, and its summary, what goods and services it sells, and what its purpose and mission are. It is crucial to learn all about the brand’s agenda and values, so you know whether you share it or not. When you have a clear idea of a franchise concept, you comprehend what potential it has and how you can best leverage it.

Developing a Marketing Strategy

The profitability of an enterprise is greatly influenced by the quantity of sales it makes. So, it is crucial to grasp how the parent company attracts new customers and retains existing ones. Typically, the parent company is in charge of advertising efforts. Entrepreneurs can find out more about promotion means and strategies in the Item 11 of the FDD. There is also information about training that usually includes courses on sales and marketing. If the franchisor takes full responsibility for marketing campaigns, then franchisees usually have to pay an ongoing advertising fee for this service. There are also brands that provide marketing materials and educate franchise owners on how to implement them right.

Creating a Financial Plan

It is one of the most important elements of your business plan, especially if you want to be considered a proper candidate for financing. Typically, financial information is presented in Item 19 of the FDD. Here you find a review of franchise units’ financial performance. However, bear in mind that possible profits range from one unit to another. Thus, you can’t rely only on financial reports in the said document. There exist many variables that can influence the revenue of an enterprise, including the location of a unit, the marketplace, demographic, and management. It helps to contact former and existing franchise owners to get a better notion of what to expect in terms of income.

When you draw up a financial plan, it is important to include not only possible financial prospects, but associated expenses as well. The size of initial investment and a percentage of ongoing fees are usually disclosed by the parent company. Entrepreneurs must be aware of how much funds they have to possess, what possible expenses may occur, and when an enterprise will start making money. All this information needs to be properly researched and analyzed, so you will be confident that you have enough funds to keep your establishment afloat and ensure its success.

Organizational Structure

In order for business to be lucrative and thriving, it is important for it to be properly organized and thought-out. Entrepreneurs must know what their role and duties are, how the enterprise needs to be operated, what processes there are, and how to handle them correctly. There is typically information about obligations imposed on a franchise owner and qualifications and experience that can help franchisees prosper. When you develop a business plan, include all organizational aspects of this or that franchise model, so you know what is expected from you as an owner, and what operations and goals have to be achieved.

Developing a Growth Strategy

When acquiring a franchise, it is crucial to think about the big picture. Ambitious entrepreneurs have to think of possible opportunities and potential of this franchise business. How can you leverage the full potential of this enterprise? What are the means of increasing profits? What extent of freedom will you possess, and how could you utilize it to your advantage? These are just some of the questions that have to be answered when you draw up a business plan. Business growth is a natural thing to worry about for franchisees. Think of possible growth opportunities in advance, so you will be prepared for implementing them in the future.

There is no single layout for drawing up a franchise business plan. We have presented the main aspects that should be taken into consideration. If you have a proper plan of how to achieve success, you can make sure that you’re prepared to follow it and carry out all elements of the plan. It is easier and safer to enter the preferred market by acquiring a franchise unit. A lot of business solutions are ready-made, and you wouldn’t have to worry so much about challenges and dangers associated with opening an independent business. Franchisors offer enormous assistance and guidance, and take care of important organizational and operational aspects.

Written by Vasil Gazizulin Founder of Topfranchise.com CEO Expedition 2009 - 2014 Author of a book «GROW WITH A FRANCHISE»

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How to Write a Franchise Business Plan

Choosing to open a franchise is a proven path to success.  Although the problem most people have is raising the initial capital to buy the franchise, and for the necessary startup costs.  In this article I’ll explain how to write a franchise business plan, and what lenders want addressed in order to have the confidence to loan you money.

Choosing a Franchise

You’ve most likely already chosen a franchise, but if you haven’t this section will point you in the right direction.  When you think about opening a franchise the first thing that probably comes to mind are quick-service food franchises such as McDonalds, Tim Hortons or Subway.  Although, chances are you’ve decided on a more original choice.

Franchises can be in industries including food, retail, cleaning, real estate, travel, automotive, education, hospitality, accounting, fitness, beauty, property services and more.  For more help on choosing the right franchise you can visit this article.

https://www.businessnewsdaily.com/1783-choosing-franchise.html

But remember that investing in franchise is a serious decision, which requires a lot of time and money.  Do your best to choose a franchise that you truly believe in and support.  If you’re passionate about something you are so much more likely to be successful with it, and owning a franchise isn’t any different.

How to Design a Franchise Business Plan

Before we begin I want to talk about how a franchise business plan should look.  Unless there’s any stipulations, you want to utilize the exact logo, branding, colour scheme and font of the franchise you’re looking to purchase.  Some business plans maintain a more conventional look with strictly text, where other plans feature visuals to help the audience digest the content in other ways.  To see how a business plan with graphic design can look, view one of our samples here.

• Executive Summary

Begin your executive summary by explaining the present opportunity in the marketplace.  There should be plenty of data to support this decision.

For example, if you were planning to open a Starbucks at a busy corner in downtown Toronto, and there were five other coffee shops within a fifty metre distance, you would need to provide the market research to prove a demand for your Starbucks franchise.  No matter who you are, or how reputable your franchise is, you should always provide strong market research to support this expansion of the core business.

Next, think of your executive summary as the blurb at the back of a novel.  Providing enough information to hook you into reading the rest of the business plan, but not so much that it tells the entire story.  Utilize key, overriding themes from each segment of your franchise business plan.

This is why most business plan experts recommend writing your executive summary last, to extract a key point from each section.  We say the opposite: write your executive summary first, so you have something to reference to, and when your plan is complete revisit the executive summary to update it.

• Franchise Overview

Immediately after your executive summary it’s time to sell your audience on the franchise itself.   Things you should include in the franchise overview are:

• When it was founded
• A brief history
• Country of origin, and current headquarters
• Gross revenue in the previous year
• Amount of franchises across the world or nation
• Its unique offering or service
• It’s target audience
• Problem and Solution

Is there even a need for this franchise?  There is one way to find out, through market research.  If you want to test your market to ensure there will be a demand for your franchise check out this article.

https://www.bsbcon.com/blog/do-this-before-you-write-your-business-plan/

Once that’s complete state your findings in the problem and solution section.

For example, Angela wants to open a women only bootcamp franchise in downtown Toronto.  The problem she’s identified is “women aged 25 – 50 are looking to exercise in a fun, non-threatening environment for an affordable monthly fee”.

Currently this demographic is left with only a few bleak options: exercising alone by running through public spaces, signing up for gyms that demand long-term contracts, or fitness centres that have an array of personalities and interests, therefore putting women aged 25 – 50 in a slightly uncomfortable position.

The solution is “a women only bootcamp franchise which is welcoming, affordable, fun and effective.  Moreover, this franchise has a history of bringing women together in each community.  Women aged 25 – 50 can become a part of this community that celebrates safe, healthy and rewarding fitness environments”.

• Products and Services

The products and services for a franchise business plan is often the easiest section to write.  There is often a pre-established list of which products and services the franchise offers; therefore, simply carry that information directly to your business plan.  With that being said, it can be helpful to ask whether there’s any leeway in the products or services your location can offer.  Also, make sure to list the respective price of each product or service.

• Market Analysis

There are typically three components of the market analysis:

Market Growth Rate

It’s important to disclose the market size and growth rate of your franchises industry.  This information is usually widely available, but it’s often more a matter of finding the most accurate data.

Three Closest Competitors

For this portion of your franchise business plan you need to identify the prospective franchises three closest competitors within a predetermined distance around the location.

For example, if you were to open a McDonald’s in the Greater Toronto Area you would need to identify all the quick-service restaurants within a square kilometre, and then realize which of those restaurants would be in direct competition with your franchise.  You might find that a Subway, Tim Hortons and A&W restaurant location are in the closest competition.

Market Research

There should also be plenty of additional research conducted by the corporation of the franchise.  Provide any relevant findings that will help support your business case in this section.

Industry Trends

This is research that you, or your business plan writer will have to carry out.  As much as the corporation wants their franchises to be successful, there is still a gap between their interests and yours.  In order to be sure this franchise opportunity is right, you must understand the trends within the industry you’re about to enter.

For example, if you’re planning on opening a boot camp franchise the head office will surely be telling you about every positive to owning one of their locations.  Although, what do the industry trends tell you?  If you carry out your own industry trend analysis and find out that boot camps are losing popularity then you need to make an important decision about the opportunity.

• Operational Plan

Here is one of the many positives to buying into an established franchise model:

Essentially any operation from taking out the garbage, to speaking to customers, to restocking supplies has a tried and tested formula; therefore, the operational plan in your business plan should simply reference this document.

Don’t reference the entire plan, but rather specific sections to help your audience understand the daily functions of your franchise.  It’s also important to ensure the corporation approves your usage of their operational plan.

• Marketing Plan

The marketing of your franchise will likely be done by the corporation.  Which means this is yet another section where you are referencing their process to marketing, and how your franchise will support their efforts.

This is often done by an ongoing royalty fee between the corporation and each franchise.  Royalty fees can range anywhere from 0-20%, and a percentage of those funds are designated to the corporation to advertise for the brand as a whole, internationally, nationally and regionally.

Give your audience a breakdown of the corporation’s success in marketing to consumers.  Let’s take McDonald’s for example: McDonald’s has a prolific history in engaging people from all walks of life to keep them coming back to their restaurants.  That consistent effort to keep their business relevant in an ever changing world has resulted in developing one of the most iconic brands of all time.

• Financial Plan

My honest advice is for you to consult with our team at Bsbcon on your financial plan.  This is a core part of your business plan, which should be completed once every other facet of your plan has been flushed out.

In choosing to invest into a franchise you’re making a serious decision which can affect your financial future, your schedule, and the quality of life for you and your family.  At the end of the day you need to ensure this investment will truly be worth it.

You will want to know how long it will take to begin making a profit, and how long you will be repaying debt for.  Some people try to do this alone, or trust in business plan writing software.  Work with a professional business plan writer, or a registered accountant to provide you with a second opinion on the financials of your franchise business plan.

• Key Personnel

The people that make up your franchise will make or break the location.  It is ultimately your job as the franchise owner to hire the right people to ensure its success.  Therefore, you must understand the roles and responsibilities of each position.

We’ve already mentioned that creating your financial plan should be your last step, and the step just before that will be developing a compensation summary table.  A compensation summary outlines all positions in the first three years, and what the median salary will be.

• Management Team

Your management team will often be the link that decides whether your franchise receives funding, or not.  Lenders and investors must have confidence that the franchise will be led by capable individuals, which are uniquely qualified for the opportunity.

In doing so you’ll need to provide a professional bio for each management team member.  Do your best to have at least two management team members.  The reason being, that lenders will have greater confidence in lending to a company with multiple managers, because in the scenario that the leader is injured or passes away there are others to keep the business functioning.

Franchise Business Plan Format

Should i open a franchise.

There are so many factors to consider like which franchise is best, and whether you’re the right fit.  Lets first discuss how to know if a franchise is right for you.

Investing in a franchise is likely a poor idea if you’re a rebellious, innovative entrepreneur.  The reason being that franchises are best for individuals who can follow directions while being able to manage a team and utilize a pre-established system.

So, who is the right person to open a franchise?

Someone that is self-motivated, enjoys leading a team, and believes deeply in order.  So entrepreneurs can certainly open a franchise, but they would have to understand that there are set rules, offerings and procedures that must be followed.  Owning a franchise is not the place to evolve a company, although some franchise owners might like to think so.  If that’s what you’re interested in doing you should start your own company, or become a director on the board of an established business.

There are immense benefits in hiring an independent consulting firm to help you decide on a franchise and location that is tailored to your interests.

Additional Help

Our team at Bsbcon are here to help you with any of your business plan writing needs.  You can reach out to me personally at [email protected] or +1 (888) 880-1898.

How can we help you?

Get in touch with us or visit our office

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Franchising 101: How to Business Plan a Franchise

Entering the realm of franchising is a significant step for entrepreneurs. Therefore, determining your course of action with a well-constructed business plan is crucial. You’ll need a roadmap to guide you through the franchising process, allowing you to navigate its challenges and enjoy its rewards. Here, we delve into the core aspects of business planning for franchising to equip you for this entrepreneurial journey.

Understanding Franchising: An Overview

Definition of franchising a business.

A franchised business is centered around a partnership where the franchisee operates under an acknowledged brand’s banner. Thus, they benefit from the franchisor’s well-established systems and processes, diminishing the risks of starting anew. For instance, a franchisee of a coffee shop will have access to a tried-and-true menu, operational protocols, and receive marketing and training assistance. Hence, franchising offers a surer path to entrepreneurship backed by a pre-existing business model.

4 Fundamental Categories of Franchises

When drafting a business plan for your franchise, it’s necessary to carefully consider four crucial categories. The franchise’s history and core business activities, its strengths and weaknesses, your abilities and background, and an analysis of the local market and competition should all be addressed. These four categories facilitate the franchise’s growth and progress, enabling well-informed decision-making and laying out a clear path to success.

Franchising versus Licensing: The Main Differences

Franchising and licensing are distinct entities. While franchising revolves around mirroring an established business model and identity, licensing involves receiving the rights to use intellectual property in exchange for royalties.

For example, a franchisor lends support in areas like product development and marketing, thus enabling a franchisee to capitalize on brand recognition. On the other hand, licensing mainly deals with granting permission to utilize specific intellectual property while leaving operational aspects down to the licensee.

The level of control a franchisee or licensee has differs significantly. The former must follow strict guidelines, while the latter can operate more freely within the set parameters. Pinpointing these differences is an essential step when choosing between franchising and licensing as your entrepreneurial path.

Timeline and Costs: Franchising Your Business

Crafting a full-fledged business plan requires analysis and tailoring of the franchisor’s products, services, processes, and financials to the franchise’s specific locale. A comprehensive business plan should include an assessment of the brand’s strengths and weaknesses, the franchisee’s background and experience, the local market analysis and competition, growth aspirations, management, sales and marketing strategies, and financial projections.

Regularly reviewing your business plan ensures continuous updating and keeps you on target for success.

The Anatomy of a Franchise Business Plan

Ensuring your business is franchise-ready.

Formulating a business plan for your franchise can significantly aid in identifying if the franchise investment is the right path and represents a productive exercise. It’s crucial to include inclusions such as: history and core activities of the brand, its strengths and weaknesses, your qualifications and track record, market analysis, the competition, growth plans, management and personnel strategies, sales and marketing procedures, costing factors, and financial projections.

By maintaining your franchise business plan’s accuracy and relevance, it will ensure that you continue steering your franchise towards success.

Safeguarding Your Business’s Intellectual Property Rights

It is crucial for future success to safeguard the intellectual property rights of your business during franchise planning stages. Registering your trademarks, implementing confidentiality agreements, and other pro-active measures guarantee the legal defense of your brand, logo and specific products or services. Vigilance in protecting your intellectual property rights contributes to securing the future of your franchise.

The Legalities of Franchising: Understanding Key Documents

Preparing the franchise disclosure document (fdd).

The preparation of the Franchise Disclosure Document (FDD) plays a significant part in business planning for your franchise. Resourced from the franchisor, the FDD establishes the foundations for creating your business plan, providing vital details for sections such as company description, financials, market analysis, management structures, and marketing strategies. Remember to draw up a confidentiality agreement to protect sensitive information during review procedures.

Creating an Effective Franchise Agreement

An effective franchise agreement is an essential element in business planning for franchising. It ensures a mutual understanding between the franchisor and franchisee, offering protection to both parties. Incorporation of provisions outlining the franchisor’s rights and obligations, such as operational guidelines, training necessities, and marketing support is essential, as well as clauses for territorial exclusivity to prevent intra-brand competition.

Developing an Operations Manual For Franchisees

The development of an operations manual is vital for facilitating franchisees successfully manage the franchise. This guide essentially ensures uniformity across various locations, providing intricate details on daily operations like customer service protocols, inventory management, and opening and closing procedures.

How and When to Register Your FDD

Registering your Franchise Disclosure Document should occur before marketing or selling the franchise in each respective state. This ensures you align with state laws and regulations related to franchising. The registration process typically involves document submission, awaiting approval, and fees, thus adding time to your planning process.

By registering your FDD in a timely manner, you demonstrate transparency and adherence to regulations, heightening the confidence of potential franchisees.

Creating Your Franchise Sales Strategy

An essential aspect of planning your franchise is to devise an effective sales strategy to captivate would-be investors. Understanding the target market, analyzing market and consumer trends, and identifying unique selling points to differentiate the franchise from competitors, helps to devise an effective strategy.

Additionally, analyzing the chosen territory’s demographics and competition, outlining growth objectives, detailing personnel qualifications, drawing up a comprehensive sales and marketing strategy, costing set-up, and making financial projections for the first few years also form part of the strategy. It is essential to keep your sales strategy updated to keep up with changes in the market and to ensure the smooth progress of your venture.

Assessing the Pros and Cons of Franchising Your Business

Advantages of franchising your business.

Franchising as a business model offers substantial merits. Rapid expansion into new markets, steady income from ongoing royalties and franchise fees, the reduced risk factor, and increased brand recognition are some of the key benefits. Thus, franchising remains an appealing option for business owners aiming to maximize their brand’s profitability and expand their reach.

Challenges and Disadvantages of Franchising

Despite the benefits, there are also drawbacks to franchising. Limitations to flexibility, high initial investment, reliance upon the franchisor for branding and marketing, heavy dependency on franchisor’s success, non-exclusivity, and strict terms and conditions set by the franchisor could negatively impact the franchisee.

Frequently Asked Questions about Franchising

The necessity of franchise registration.

Franchise registration is a legal requirement that protects your business while also providing necessary compliance. Registration brings credibility to your franchise and establishes confidence in potential customers and investors, maintaining consistent quality and satisfaction. It helps to uphold the reputation of your business and prevent unethical practices, fostering a fair trading environment.

Considering Licensing as an Alternative to Franchising

Licensing can serve as a less demanding alternative to franchising, offering opportunities to leverage a reputable brand and business model with less commitment. With licensing, there is increased operational autonomy while benefiting from brand recognition and customer loyalty. Licensing can be attractive to entrepreneurs due to its lower upfront costs and operational flexibility compared to franchising.

It allows one to engage with established brands and their customer base while having more control over business operations.

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How to Create a Franchise Business Plan

A business plan is a document that outlines the goals, strategies, and operational plans of a business. In short, it is a roadmap to success . Not only is it an essential tool for an aspiring business owner to get started, but it serves as a benchmark for measuring progress and making adjustments as needed down the road.  

If you are planning to purchase a franchise, creating a thorough and effective business plan is essential to your success. Not only will it help you prepare for what lies ahead, but it is also a requirement if you are looking to secure financing. In fact, a well-written business plan can make the difference in whether a lending company approves your loan.    

Information You Need to Write a Compelling Business Plan  

A business plan is not something you can just jot down in a few minutes. Rather, you will need to spend intentional time compiling information and developing a strategy that will form the blueprint of your business. 

Here are several items you should consider including in your franchise business plan: 

• Relevant work experience
• Insights from existing franchisees 
• Statistics within the industry 
• Current industry news 
• Updated data related to local economy 
• Local marketing tactics  
• Franchise Disclosure Document (FDD) 
• Additional franchisor literature 
• Necessary permits and licenses 
• Market area map that includes all current and potential competitors

What Should Be Included in a Franchise Business Plan?  

Clearly, forming a business plan requires a diligent effort. However, if you are looking to own a franchise business, you won’t need to start from scratch since the franchisor has already compiled much of the information you will need. While you still need to work hard to put together a solid business plan, there are several templates available for guidance. No matter which template you choose, your business plan should include the following sections: 

Executive Summary 

This section will provide a mission statement for the business and then explain how your business will achieve its goals . Someone should be able to read the executive summary and know the purpose of your business and the potential it has in its given market. 

Business Description

The information provided here should be thorough. Fortunately, Item 1 in the Franchise Disclosure Document (FDD) will give an overview and history of the franchise you are seeking to buy . Furthermore, you should include details related to products and services, market and competition, business operations, and the potential challenges your business might face. 

Operations & Management Summary

This section will explain how things will get done in the business . It should outline the structure of the management team and include specific instructions related to the day-to-day operations of the business. Team members should be able to refer to the operations part of the business plan as they aim to implement the business’s strategies. 

Market & Industry Analysis

You will need to provide an analysis on the market that you are entering, which includes: 

• A description of the marketplace
• What your competitors are doing
• Details that support your specific business strategy

Furthermore, you should also understand the industry along with its risks and opportunities, so that you can build strategies that take advantage of the opportunities while mitigating potential risks.

Competitive Analysis

You shouldn’t start a franchise business with your blinders on. It’s important to know what your competitors are doing and how they are performing . Evaluating your competitors is a way to validate the predictions you have for your business’s performance . By this point, you have probably already gathered all the information you need about your competitors. Ensure that you perform a thorough analysis of this information as it will guide you in your business decisions.  

Marketing & Sales Plan

What you include here is dependent on which franchisor you work with since you are obligated to use their sales and marketing tactics. You will want to know the process for targeting new customers and how much flexibility you have to implement your own marketing strategies . You should also provide specific information related to the initial marketing plan and what the ongoing marketing strategy will look like. Finally, it’s important to explain how the franchisor will support you in these efforts .

Financial Plan

This section should thoroughly outline the financial details of your business: where it has been, where it currently is, and where it’s going . The data will include: 

• Business costs 
• Current funding for the business 
• Expected future financial needs  

While the actual financial performance of each franchise unit will vary, the Franchise Disclosure Document (FDD) provides information that is helpful for making financial projections. 

• Item 19 includes the financial performance representations (FPR) for a prospective franchisee 
• Items 5-7 have helpful financial information related to the initial fees and investment needed

Speaking with existing franchisees is also an integral part of this process. 

Pro forma is another part of the financial section, and it includes projections of future expenses and revenues , which you can corroborate with the following business information:  

• Balance sheet
• Profit or loss statement 

Perhaps it goes without saying, but be sure to update your business plan if something changes. It is not a document you should finish and then put away to gather dust. It is a valuable resource, and you should use it at every stage in your business if you want to be successful.  

Ready to Get Started With Your Franchise Business Plan?  

Creating a thoughtful and detailed business plan is key to each step of the franchising process. If you are ready to get started with owning a franchise business, then FranNet is here to help. Our franchise consultants will provide the resources, support, and guidance you need to make an informed buying decision. Schedule a free consultation today! 

Mar 17, 2023

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Creating a business plan for your franchise: what to prepare before asking for money.

🕒 Estimated Reading Time: ~8 minutes

Congratulations! You’ve decided that owning a franchise is the right investment for you. You may have even already decided on the type of franchise, and maybe even the franchise brand you are going to pursue.

What’s next? Financing. Securing the funding needed to make your franchise dreams a reality. And unless you are one of the fortunate people that has enough money saved to cover costs, you will likely be seeking a lender to make up the difference between the amount of money you currently have to invest and amount of money needed to open and maintain your franchised business until you 'break even.' (Breaking even is the point in the lifespan of a business where the operation starts turning a profit.)

To convince lenders that you are worthy of their money, the creation of a business plan is crucial. Lenders use a business plan as a guide to assess whether the prospective franchisee is a on a path towards success and profitability.

To approve loans, lenders want to have a clear, straightforward account of the business to be opened, the principals involved, and—perhaps most importantly—perspective on when the borrowed money will likely be repaid.

It's helpful to prepare for the meeting with the lender like a college graduate student would prepare for a thesis defense presentation. In both instances, it is the goal of the person (or people) going into the meeting to have done the adequate level of research necessary to competently back up the stated claims for the desired result (be it the granting of a master's degree to the student or the gaining of a loan for the prospective franchisee).

Important note: the business plan isn’t just for getting money.

Not only does a business plan help in securing funding, it forces you to take a hard look at the investment you are about to make. It gives you a chance to anticipate the challenges that come with opening a business, and temper unrealistic expectations.

As time passes and you move further into franchise ownership, the business plan you’ve created should be updated and utilized as a guide in helping you reach your franchise goals.

Parts of a Business Plan

Creating a business plan doesn't have to be complicated.

There is no standardized length for a business plan, but no lender wants to read a novel-length presentation. The main thing is that the plan is thorough enough to cover all aspects of your individual franchise. You want to give the lender confidence that you are prepared to take on the managing of a business that will turn a profit in a reasonable amount of time.

The key is compiling the proper information to address the reservations of the lenders you will meet with. This is where opening a franchised business offers a notable advantage over an independent business.

The franchise disclosure document (FDD) provided by the franchisor of the system you are investing in contains a great deal of the information needed to complete a business plan.

This information includes the company’s corporate background, a description of the target market, the competitive advantage of the product/service, marketing initiatives, plus the start-up and ongoing costs. Some franchisors even offer assistance to franchisees in the preparation of the plan.

Common parts of a business plan include the following, according to the Small Business Administration  (a sample business plan is located at the end of this article):

Company description: A good place to look for the information for this section is Item 1 of the FDD. Provide an overview of the franchise and its history to the lender. You will also provide a brief outline of the franchise’s service/product (more detailed information will be given in the next section).

Service/product description: Describe in detail the service and/or product your franchise will provide to customers. This section can be combined with the company description. Again, Item 1 of the FDD is where you will find much of the information you need for this section. Item 16 will also be helpful in discussing what you will and will not be able to sell as a franchisee of a particular franchise system.

Market analysis: Use this section to prove to the potential lender that you are not jumping into a business venture on a whim. Concentrate on the specific area (market) in which the franchised business will be located. The territory description in the FDD (Item 12) will help you to a point.

Give a brief discussion of the following:

• How big is your market?
• What kind of people (demographically and financially) make up this market?
• Is the market under-served in regards to this service/product?
• If there is competition, who are your competitors and what is your competitive advantage?
• Discuss what experts are forecasting for the service/product in terms of trends and growth possibilities for your specific market (can include demographic, legislative or environmental factors).

Management structure: This section provides a look at the people who will be responsible for the day-to-day operation of the franchise, particularly you as the owner. Is this venture going to be a sole proprietorship or will there be multiple owners? Explain if you will be involved day-to-day with business operations, or will be acting as an absentee owner.

For yourself and all of the others with an ownership stake, if applicable, detail all business qualifications. Stress any and all experience (even if volunteer) that is relevant to being successful in the future with the franchise operation. Item 15 of the FDD will help with explaining the managerial obligations of the franchisee.

Marketing plan: 'How are you going to get customers?' is the main question you’re answering in this section. Use FDD Item 11 to your advantage here. It provides an overview of the franchisor’s advertising and marketing efforts. Also, it provides a description of the training you will complete before opening. Often marketing and sales courses are part of required training.

Financials: This is the meat of your business plan. In this section, don’t only ask for the money you need. Give the lender the big picture of your financial situation as well. Detail how you are going to obtain the entire initial investment. Often times, a lender will not be financing all of the franchise investment. Are you using a mix of personal savings, loans, credit, etc.?

In addition to the funding request, you will be doing some financial projection. Give a reasonable time frame when the lender can expect full repayment of the loan, and back up that claim with figures. Include graphs and charts detailing the start-up costs, projected profit and loss and projected sales forecast for the franchise.

The franchisor can be of significant help to you in completing this section (via Items 5 and 19 of the FDD, and in direct conversation). However, keep in mind the franchisor is restricted legally about making certain claims about projected earnings. Be conservative with the projections as unexpected delays and unforeseen circumstances do happen.

Appendix: The appendix technically isn’t a part of the business plan, but an additional section to present items that would enhance your presentation. Include items you feel would be necessary to giving the lender a complete picture of you and the franchise you are seeking financing for. Examples include: the resumes of management figures, tax returns, media clippings, etc.

As previously mentioned, the best outside source of information to complete your business plan is the franchisor. No other outlet is going to know that franchise system better. 

Additional resources include online sites such as Bplans.com, which offers site visitors a substantial library of sample plans to review, as well as general business websites like the Small Business Administration. Prospective franchisees can also use a professional business plan writer, particularly for the review of a plan before sitting down with the lender.

Confidentiality agreement: Because business plans contain sensitive and confidential information, the content needs to be safeguarded against potential leaks. To do this, you will need to enter into a confidentiality agreement with the parties you allow to review your business plan.

The agreement will bind them not to disclose or reveal any confidential information they receive, without your written permission.

Sample Business Plan Confidentiality Agreement Template

Sample franchise business plan: Please note that the example business plan linked below is a sample of one way to format a business plan. There are several different acceptable formats, and the contents of business plan sections will vary significantly due to factors including the franchise system, the type and amount of loan sought, the franchisee’s background, etc.

Sample Business Plan

Suggested reading:

• The Ultimate Guide to Franchising
• What is Franchising?
• The Benefits of Franchising
• Choosing the Most Profitable Franchise for You
• 11 Key Steps in Opening a Franchise
• Franchises vs. Business Opportunities
• The Cost to Start a Franchise and Financing Options
• Basics of the Franchise Disclosure Document (FDD)
• Creating a Business Plan for Your Franchise
• Completing and Signing a Franchise Agreement

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Developing a Business Plan for Your Franchise: When and How to Do it

Creating a business plan is a critical step toward the launch of any new business, including a franchise. It’s a step to take earlier in the process than you may think. Will you be seeking financing from a third party? If so, your business plan should be complete before you even ask. And that’s a good thing, because the process of preparing a business plan is very useful. It forces you to anticipate and answer a number of questions about your expectations for the new business. You’ll identify the challenges ahead and be ready to tackle them.

Developing a business plan for a franchise is much easier than for an independent business start-up. You’ll have a good deal of information already at your fingertips or readily available. You can find much of the verbiage you’ll need for the narrative portions of the business plan within the franchisor’s documents. Look to any earnings representations in the franchisor’s disclosure documents to find the financial information you need.

5 Key Sections to Include in Any Business Plan

Each business plan is unique to the particular business it describes. Nonetheless, there are several sections common to any business plan. Franchise business plans will have an additional section outlining the track record, personnel, and support available from the franchise company. You can also include items like the franchise company’s sales brochure or Franchise Disclosure Document (FDD) as attachments to your business plan. This additional section will give lenders (and others you may be trying to impress) a great degree of confidence going forward.

Five key sections contained in a typical business plan, whether for a franchise or independent business, are:

Introduction

This section describes the business in detail. It specifies the product or service involved, the size and characteristics of the market, and the degree of competition present in the market. It also sets forth the operational approach for taking the business to market, as well as any associated challenges and risks.

This section lists key management roles for the new business. It names the people who will fill each role and provides background information about each one. Each bio should emphasize prior experience that’s relevant to the new business. For a franchise business, this section will also include information about the franchisor’s staff who provide support to franchisees.

This section defines the target market: who is your customer and how will you attract them to to the business? It explains advantages your business will offer over competitors and details marketing and advertising plans.

Pro Forma Financial Projections

This section includes projected income statements, cash flow statements, and balance sheets that show the anticipated financial performance of the business. It discloses all material assumptions that are used to prepare the projections. Make sure to prepare these projections on a very  conservative basis. There will always be delays and challenges that you can’t anticipate.

Financing Needs

Be sure to prepare this section even if all funding is coming from your savings. It includes a complete analysis of all start-up costs, including working capital to cover initial marketing plans and operating losses until the projected breakeven point. Even if you are not borrowing, the process of carefully detailing this information will better prepare you for whatever might happen as you get the business up and running.

Don’t be overwhelmed as you consider the information above. Remember, for a franchise business, most of this information will be readily available from the franchisor. Check out the franchise company’s website for information that will help you complete the Introduction and Marketing sections. The franchisor’s FDD will help you with the section on Financing Needs. And, if the franchisor’s FDD includes Item 19 earnings representations , you’ll be on your way to completing the Pro Forma Financial Projections section.

Preparing a Franchise Business Plan: The Early Bird Gets the Worm

Some franchise companies require franchisee candidates to begin work on (or substantially complete) their business plan before they can be approved as a new franchisee. Even if they have no such requirement, it’s a good idea to prepare your business plan relatively early on. The process will help you identify a number of questions that may not have otherwise occurred to you. You’ll then have a chance to contact the franchise company and get answers. Make certain you have a clear understanding of all aspects of the franchise prior to making your final decision.

Finally, remember to update and finalize your business plan after you complete the franchisor’s initial training for new franchisees. You will have a deeper understanding of operations, marketing plans, and many other aspects of the business after you complete the initial training. And many franchisors will supply pro forma financial models that you can use to double-check or even replace the financial projections in your business plan. Take the time to carefully review your entire business plan based on your new knowledge. That way, you’ll be fully prepared to get your new franchise business successfully up and running.

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What Is Franchisor?

Understanding franchisor, franchisor advantages, franchisor disadvantages.

• Franchisor Example: Dunkin' Donuts

What Franchises Make the Most Money?

What are among the least expensive franchises.

• Types of Corporations

What is a Franchisor? Definition, Pros, Cons, and Example

A franchisor sells the right to open stores and sell products or services using its brand, expertise, and intellectual property . It is the original or existing business that sells the right to use its name and idea. The small business owner who purchases these rights is called a franchisee and the branch business, itself, is called a franchise .

Key Takeaways

• A franchisor sells the right to open stores and sell products or services using its brand, expertise, and intellectual property. 
• A corporation often will use franchising as a way to expand its global presence because it enables them as franchisors to benefit from the local knowledge of their franchisees.
• At a minimum, a franchisor should plan to spend on business development, a flagship store, legal document preparation, marketing, and packaging plans, and recruiting and training franchisees.
• Franchises are regulated by state and federal laws that require a Franchise Disclosure Document (FDD) and other regulatory documents entailing an attorney's services.
• Generally speaking, a franchise agreement usually won't protect franchisees if their franchisor declares bankruptcy.

The franchisor company generally receives an initial start-up fee, an annual fee, and a percentage of the branch’s profits. It may also charge for other services. Well-known corporate franchisors include Hertz ( HTZ ), Marriott International ( MAR ), McDonald's ( MCD ), and Subway ( privately held ).

Becoming a franchisor is generally a good business alternative, especially for large, already successful companies, though there are both advantages and disadvantages.

The relationship between a franchisee and franchisor is inherently one of advisee and advisor. The franchisor provides continual guidance and support concerning general business strategies such as hiring and training staff, setting up shop, advertising its products or services, sourcing its supply, and so on.

The franchisor's advisory role is not free, however; it is part of the entire package that the franchisee purchases. Even when the relationship is solidified, and the two have been working together successfully, the franchisor still acts as a mentor. A franchisor's parental role is an ongoing commitment. In fact, franchisors generally police their franchises constantly—albeit some more than others—to ensure that they are maintaining the parent company's standards, product quality, and brand values.

Some of the more common types of stores that franchisors can offer franchisees are:

• Freestanding store: A retail location or restaurant, either newly constructed or an existing structure that does not share any common walls with a third party
• Shopping center storefront: A retail location or restaurant that shares a common wall, or walls, with third parties
• Gas/convenience restaurants: A gas station, often with a convenience store and restaurant that is a sub- or-shared tenancy within a gas/ convenience host environment
• Special distribution opportunity (SDO): Cart or kiosk locations that are referred to as special distribution opportunities and may be located within another host establishment, such as a stadium or another retail facility
• Online or e-commerce: Licensed branding to an online or e-commerce platform

A chain store is one of a series of stores owned by one company; if Starbucks ( SBUX ), for example, were to franchise some of its stores, then those would be owned by outside investors—not by the original company—and Starbucks would become a franchisor .

Generally speaking, a franchise agreement won't protect franchisees if their franchisor declares bankruptcy. In fact, franchisees are usually obligated to pay royalties and continue operating amid a franchisor's bankruptcy. When a franchisor files for bankruptcy, the court will immediately impose a stay of all actions against the franchisor. In other words, franchisees aren't allowed to take legal action against the franchisor.

The following steps in the process are determined by the type of bankruptcy the franchisor chooses to file for.

• In a Chapter 7 bankruptcy , all of the franchisor's assets are liquidated to pay its creditors. Companies typically go this route because it's flat going out of business. In this situation, it's highly unlikely that the franchisor will be able to meet its franchise agreement obligations. Therefore, it's also unlikely that the franchisee will be able to stay in business.
• In a Chapter 11 bankruptcy , a franchisor reorganizes its debt obligations and continues to operate as a going concern. Under this type of bankruptcy, the franchisor works with its creditors to create a reorganization plan while continuing to meet at least some of its franchise contract obligations. A reorganization plan sometimes takes months or years to complete.

In either case, a franchisor's bankruptcy will likely have a significant impact on its franchisees.

• Expansion Opportunities : A corporation often will use franchising as a way to expand its global presence because it enables them as franchisors to benefit from the local knowledge of its franchisees. The franchisor company grants the franchisee the responsibility of expanding in an area or country and grants them the right to sub-franchise. In exchange, the franchisee assumes the financial burden of building a unit and pays the franchisor royalties for access to its time-tested business model, market power, and brand name.
• Heightened Market Share : In addition to extending its geographical reach, franchising is a good way for a company to increase its market share while minimizing capital expenditures (CapEx) . Franchises can be more profitable than corporate-owned chains, because as business owners franchisees are motivated to maximize their outlets' profitability and are responsible for their own overhead, such as staff. Less overhead can make franchises more profitable than corporations, even when their outlets are less profitable than they would be if they were run as chain stores.
• Scalability : Depending on a franchisor's needs, resources, and production goals, the company can customize its franchise agreement to focus on large-volume national growth or low-volume regional growth.
• Additional Sources of Revenue : A franchisor receives additional income in the form of ongoing royalties paid by its franchisees. Royalties typically include a startup fee, a monthly fee that includes a percentage of the franchisee's gross sales, and may contain other payments depending on the franchise agreement.

Royalties paid to franchisors vary by industry, location, company size, and financial strength. That said, royalties paid to franchisors usually fall in the range of between 4.6% and 12.5%.

Some may think—partly because of the steep cash outlay—that franchisees assume more risk than franchisors. But there are potential disadvantages for franchisors, too.

• Capital Investment : Establishing a franchise requires a large investment of both time and money. At a minimum, a franchisor should plan to spend on business development, a flagship store, legal document preparation, marketing, and packaging plans, and recruiting and training franchisees.
• Franchise Failure : Even with scrupulous vetting on the part of the franchisor, a franchisee could turn out to be a poor choice—irresponsible, difficult to work with, or incapable of running a business for whatever reason. Or the franchise could become unprofitable for other reasons. Even with a proven business plan, there is no guarantee that a franchise will succeed.
• Less Control : At the outset, franchisees will, of course, agree to follow their franchisors' training, deportment, and other instructions. But after the honeymoon is over, that might not be the reality. Franchisees are human beings with their own ideas and temperaments, so disagreements can always occur: a franchisee could become stubborn or difficult, or might not be able to effect changes as easily as the franchisor had hoped.
• Costly Legal and Regulatory Fees : In the event that a franchisee refuses to cooperate, or proves to be a poor choice in other ways, legal action may be necessary; this can be both expensive as well as damaging to a franchisor's reputation among other franchisees. Moreover, franchises are regulated by state and federal laws that require a Franchise Disclosure Document (FDD) and other regulatory documents entailing an attorney's services.

Franchisor Example: Dunkin' Donuts

Dunkin’ Brands Group (DNKN) went private after it was bought out by Inspire Brands Inc. in late 2020. It used to be called Dunkin' Donuts , began operations in 1954, and has been franchising since 1955.

With more than 130 years of franchising experience, Dunkin' is home to two of the world's most recognized franchises: Dunkin' and Baskin-Robbins. According to Inspire Brands Inc.'s website, there are "11,300 Dunkin' restaurants worldwide – that's over 8,500 restaurants in 41 states across the U.S.A. and over 3,200 international restaurants across 36 countries." As a franchisor, Dunkin’ licenses stores and restaurants that sell Dunkin’ coffee, donuts, bagels, muffins, compatible bakery products, sandwiches, and other food items and beverages compatible with the franchisor’s concept.

Most companies that offer franchising opportunities post how-to information for prospective franchisees on their websites. Generally, this is comprehensive, voluminous, and often written in legalese or boilerplate . In its franchisor role, Dunkin's text speaks to its would-be franchisees clearly and understandably, as the following sample shows.

Training Overview

• Franchisees must at all times manage their network with at least two individuals, one of whom must be the franchisee or another partner, shareholder, or a designated representative. But both must successfully complete the required training program.
• It takes a minimum of 20 days to complete the classroom/instructional phases of the Dunkin’ Core Initial Training program—not including online training, in-restaurant practice, or travel time; this is offered a minimum of 25 times a year at Dunkin’ Brands University in Braintree, Massachusetts.
• The classroom and in-restaurant time are based on 10-hour days. Some of the franchisor’s required classes are only offered on the internet and are referred to as online training. These classes will require approximately 65 hours to complete.

Obligations and Restrictions

• Franchisees must devote continuous best efforts to the development, management, and operation of their business. This means devoting sufficient time and resources to ensure full and complete compliance with their obligations to the franchisor, their customers, and to others.
• Franchisees may not conduct any other business or activity at the restaurant without the franchisor’s prior written approval. They may sell only products approved by the franchisor and they must offer for sale the full menu prescribed by the franchisor.
• Franchisees are not permitted to sell or distribute goods or services via the Internet or other electronic communications.

Financial Assistance

Dunkin' typically does not offer to finance its franchisees. However, from time to time, it may, at its discretion, offer voluntary financing to existing franchisees for specific programs such as the purchase of specialized equipment or accelerated development in specified markets. The franchisor may facilitate certain third-party lending arrangements that may provide financing for qualified franchisees. The amount of financing and repayment period varies by program, circumstances, and creditworthiness of the applicant.

Estimated Initial Investment

Dunkin' estimates that the cost to open one of its franchises—not including real estate costs—is approximately $95,700 at the low end and $1,597,200 at the high end. More information, including a complete breakdown of the fee schedule, can be found on the franchisee page of their website .

Here are five of the biggest money-making franchises, and the initial investment required:

• McDonald's ($1M-$2.2M): Iconic symbol of fast-food hamburgers, fries, chicken nuggets, breakfast sandwiches, and a wide variety of other signature food items. Operates more than 36,000 restaurants in more than 100 countries. Founded in 1954.
• Dunkin' ($96K-$1.6M): World's leading baked goods and coffee chain, serving more than 3 million customers each day. Offers more than 50 varieties of donuts. Founded in 1950.
• Sonic Drive-In ($1.2M-$3.5M): Currently owns and operates the largest chain of drive-in restaurants. They are primarily located in the south-central and southeastern United States. Founded in 1990.
• 7-Eleven ($38K-$1.1M): Operators of more than 60,000 convenience stores, mainly in North America and Asia. Founded in 1927.
• Popeyes ($383K-$2.6M): One of the world's largest quick-serve chicken restaurants, operating more than 2,700 restaurants in the United States and around the world.

Here are five lower-cost opportunities with strong brand power, and the initial investment required:

• Kumon Math & Reading Centers: $64K-$140K
• ServiceMaster: $77K-$275K
• uBreakiFix: $98K-$303K
• Jan-Pro: $4K-$56K
• Cruise Planners: $2K-$24K

International Franchise Association. " Royalty Fee Requirement Definitions ," Page 1. Accessed June 4, 2021.

Dunkin'. "Dunkin'|About Us." Accessed Aug. 28, 2021

Hubspot. " The 39 Best Franchise Opportunities to Buy & Own in 2020 ." Accessed June 3, 2021.

McDonald's. " About Us ." Accessed June 4, 2021.

Dunkin'. " About Us ." Accessed June 4, 2021.

Sonic. " The Sonic Franchise Story ." Accessed June 4, 2021.

Britannica. " 7-Eleven ." Accessed June 4, 2021.

Popeyes. " About Popeyes Louisiana Chicken ." Accessed June 4, 2021.

Entrepreneur. " 2021 Franchise 500 Ranking ." Accessed June 3, 2021.

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Five ways to improve struggling franchisee performance.

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Five ways to improve struggling franchisee performance

The success of a franchise brand is dependent on the success of the franchisees within its network. Manging a franchise operation is a demanding and multi-faceted role, and as well as all of the strategic tasks and decision-making involved in keeping the entire business and brand moving forward, it is vital that the franchisor has a constant overview of how the network as a whole is performing as well as what is happening across the individual locations.

The franchise recruitment process marks the start of the franchisor-franchisee relationship, and I've previously written about how crucial it is to get those recruitment decisions right - get it wrong and the implications can be both stressful and costly. However, even if that initial recruitment decision was the right one, in any franchisee's journey as a business owner there are likely to be periods when things aren't going quite as well as planned or the business goes through a bumpy patch As a franchisor, being faced with an underperforming or struggling franchisee can arouse uncomfortable emotions - after all, no one wants to think that they have an unhappy team member in their midst. But taking steps to attempt to address the issue and support the franchisee to turn things around before deeper problems begin to take root is essential, whether or not that means having to open up some difficult conversations along the way.

So when there is a franchisee within their network who appears to be struggling, how can a franchisor look to support them and improve performance?

Identify the root cause of the problem

Open and honest communication is key within any successful franchise network and when the chips are down, just as in any other relationship in life, talking to the individual in question should always be the first step. Identifying the root cause of the franchisee's difficulties is crucial, and that might not always be entirely business related. There could be personal or health issues at play, or geographical or environmental issues affecting the performance of the franchise location. It's impossible to look to implement effective improvement and support strategies without knowing exactly what needs to be remedied. Open lines of communication should also help to ensure a smoother path back towards success - if the franchisee feels that the franchisor is on their side and willing and able to help them to address whatever the problem or problems are, they are far more likely to engage with whatever action may be needed.

Tailor training and support

Once the root cause of the franchisee's issues can be identified, obvious gaps in training and knowledge may become apparent and a training and support plan can be put into place. Ongoing and refresher training, support and development should always form part of the franchisor-franchisee relationship in any event but sometimes a busy franchisee with their head down in the day-to-day running of the business may have neglected to devote the time needed to it and to update themselves with new systems, resources, changes in consumer habits or marketing activity. In scenarios where a deep dive into the business has revealed a number of actionable issues however, its important not to to overload the franchisee with too much at once as this could easily overwhelm the business owner who is already struggling. Prioritise the most urgent points that require remedial action, tick those off and then move onto the next steps.

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Review plans and KPIs

When there are either issues with performance or a general malaise or lack of motivation, revisiting the franchisee's business plan and KPIs can not only help the franchisee to refocus but can also provide an opportunity to reset parameters. Taking time to do this together can help the franchisee to refocus on their goals and ambitions and remember the entire reason why they joined the franchise in the first place. Focusing on the positives and those things that have gone well to date whilst working together to set some achievable short term goals and KPIs should help to motivate the franchisee and get them moving forward. It's human nature to respond positively to praise and appreciation and as the saying goes, celebrate the small wins - doing so might just help a demotivated franchisee to rediscover their mojo! Reversely, a long term franchisee might simply have fallen into a trap of complacency and need some new targets to strive for to keep them hungry for success and ready to move the franchise forward again.

Implement peer support

A franchisee in crisis will of course benefit from the intervention, knowledge, advice and support from the franchisor to help them to tackle the difficulties that they are facing and put strategies in place to get their business back on track. However, what cannot be underestimated is the value of peer support - having the opportunity to be aided, encouraged and inspired by someone else walking the same path as you. Providing opportunities for a struggling franchisee to speak to and learn from other franchisees who may have experienced similar challenges can generate incredibly positive results, and it is very often the case that a franchisee is more likely to follow advice from their fellow franchisees than their franchisor!

Communicate and monitor

Having taken time to identify the cause or causes of the franchisee's difficulties and put a well considered action plan and strategies in place to help tackle them, it is important that the franchisor does not now simply walk away and consider the job done. A franchisee who has been struggling should be considered "at risk" for a period of time and support and monitoring should be ongoing to try to ensure that things do not take a downward turn again. Maintain those lines of communication, check in regularly, have one to one meetings....monitoring the franchisee's progress and pathway back to success will help to quickly identify any additional hiccups that might occur and keep the franchisee engaged, motivated and feeling supported.

Of course, there will be occasions when a situation is not salvageable, where the relationship between franchisor and franchisor has deteriorated to such an extent that it is no longer viable to continue, or where the franchisee's difficulties or actions are so serious that they require the franchise contract to be terminated. In such a scenario the franchisor will need to be ready to take quick and decisive action to protect the franchise brand and the rest of the network and hopefully exit the contractual relationship on as good terms as possible. However, in many more cases an under performing franchisee can be steered back on course, and in showing their willingness to intervene and provide assistance, understanding and support the franchisor will demonstrate to the whole franchise team their commitment to them and their individual businesses. Engaging with and assisting a struggling franchisee should also give the franchisor food for thought going forward - there is always something to learn from each experience and it is an opportunity to review recruitment, training, support and other provision moving forward, to give each franchisee the best possible chance of success.

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Transforming Your Passion Into Impact — Discover the Top 15 Franchises Shaping Children's Futures Looking to make a real impact in kids' lives while running a successful business? Check out the top 15 children's franchises, according to the 2024 Franchise 500.

By Clarissa Buch Zilberman • Apr 23, 2024

Key Takeaways

• These franchises span a wide range of educational services, from tutoring in specific subjects to more comprehensive early childhood education programs.
• Many of these franchises have demonstrated significant growth over the past few years.
• The franchises on this list not only support academic excellence but also foster environments where children can thrive in various aspects of their personal growth.

When it comes to helping kids succeed, some franchises stand out above the rest. From tutoring centers to educational programs, these businesses play a crucial role in shaping young minds. In this article, we'll take a closer look at the top 15 children's franchises, according to the 2024 Franchise 500 Ranking .

These franchises not only provide essential academic support but also foster a supportive environment where children can thrive and grow. So if you're considering buying into a franchise brand that makes a meaningful difference in the lives of children while also offering a promising business opportunity , these top-ranking options may be your key to success.

Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests and budget.

• Overall Franchise 500 rank: 10
• Founded: 1954
• Franchising since: 1958
• Number of units: 26,244
• Change in units: <1.0% decrease over 3 years
• Initial investment: $68K - $147K
• Leadership: Mino Tanabe, CEO
• Parent company: N/A

Operating a Kumon franchise not only allows you to run a business while positively impacting your community, but also offers support for growth through brand managers and field consultants. With a vast global network of over 26,000 franchises, Kumon is a significant player in education, providing parents with solutions to help children excel academically and boost their confidence. The franchise presents rewarding moments, such as witnessing students succeed in their academic endeavors and confidently acing tests, making it a fulfilling venture for franchisees.

Related: See Who Made This Year's Franchise 500 Hall of Fame

2. The Learning Experience Academy of Early Education

• Overall Franchise 500 rank: 32
• Founded: 1979
• Franchising since: 2003
• Number of units: 354
• Change in units: +45.7% over 3 years
• Initial investment: $590K - $5.5M
• Leadership: Richard Weissman, Chairman & CEO

Founded in 1979, The Learning Experience Academy of Early Education has provided innovative early childhood education programs for children aged six weeks to five years. The brand began franchising in 2003 and has since expanded to more than 350 locations across the United States, offering vibrant centers and engaging educational experiences. Founded by Michael Weissman, the academy emphasizes fun and effective learning, positioning itself as a leader in the daycare and early childhood education industry. Franchise opportunities are available for individuals passionate about innovative education and community involvement.

Related: How Immigrating from Argentina to the Bronx Prepared Her for Life as a Franchisee

3. The Goddard School

• Overall Franchise 500 rank: 68
• Founded: 1983
• Franchising since: 1988
• Number of units: 612
• Change in units: +13.8% over 3 years
• Initial investment: $880K - $7.6M
• Leadership: Dennis Maple, Chairman & CEO
• Parent company: Sycamore Partners

Established in 1983 and franchising since 1988, The Goddard School has grown into a leading childcare provider with numerous schools across the country, offering programs for children from six weeks to six years old. Starting a The Goddard School franchise is an appealing option for career-changers passionate about positively impacting children's lives, with no prior childcare or education background required. Franchisees oversee administrative duties on-site while receiving comprehensive support from The Goddard School in various areas such as real estate, operations, marketing and training.

Related: From Coding to Creole Cooking — Here Are 5 Inspiring Success Stories of Black-Owned Businesses

4. Goldfish Swim School

• Overall Franchise 500 rank: 74
• Founded: 2006
• Franchising since: 2008
• Number of units: 151
• Change in units: +39.8% over 3 years
• Initial investment: $1.7M - $3.7M
• Leadership: Chris McCuiston, CEO
• Parent company: Goldfish Swim School Franchising LLC

Goldfish Swim School , founded in 2006 by Jenny and Chris McCuiston, offers swimming lessons for children aged 4 months to 12 years, equipping them with essential life-saving and life-changing skills. Since franchising began in 2008 to meet growing demand, the Goldfish Swim School franchise has expanded to numerous locations across the United States and Canada. Starting a Goldfish Swim School franchise presents an exciting opportunity , particularly for those passionate about making a difference in children's lives and fostering confidence. With a strong brand and a growing network of over 150 locations, franchisees can contribute to meeting the demand for high-quality swimming lessons while embarking on a fulfilling adventure .

Related: Want to Become a Franchisee? Run Through This Checklist First.

5. Mathnasium

• Overall Franchise 500 rank: 97
• Founded: 2002
• Number of units: 1,110
• Change in units: +3.4% over 3 years
• Initial investment: $113K - $149K
• Leadership: Mike Davis, CEO
• Parent company: Roark Capital

Mathnasium is North America's leading math-only supplemental education franchise. Its founder, Larry Martinek, spent three decades developing methods and materials to help give grade-school children a better foundation in math. Since 2002, the Mathnasium Method™ has been transforming the lives of children in grades 2-12, helping them understand, master and love math.

Related: One Factor Is Helping This Entrepreneur Tackle Business Ownership Later in Life. Now, She's Jumping Into a $20 Billion Industry.

6. Huntington Learning Center

• Overall Franchise 500 rank: 113
• Founded: 1977
• Franchising since: 1985
• Number of units: 286
• Change in units: -5.0% over 3 years
• Initial investment: $154K - $264K
• Leadership: Eileen Huntington, Cofounder & CEO
• Parent company: Huntington Learning Centers Inc.

Huntington Learning Center provides personalized tutoring programs for students in grades K-12 across the United States, both in-person and online. Their business model focuses on delivering tailored instruction to help students excel academically, aiming to provide each student with the highest quality education. Huntington Learning Center offers opportunities for franchisees who are passionate about education and driven by growth , emphasizing the goal of making a measurable impact—particularly with students who may be falling behind in their studies.

Related: This Entrepreneur Is on a Mission to Eradicate Generational Poverty in the Black Community — And She's Using Franchising to Do It.

7. Kiddie Academy

• Overall Franchise 500 rank: 116
• Founded: 1981
• Franchising since: 1992
• Number of units: 312
• Change in units: +18.6% over 3 years
• Initial investment: $370K - $6.8M
• Leadership: Joshua Frick, President
• Parent company: Essential Brands Inc.

Kiddie Academy provides a positive, nurturing environment aimed at supporting children during their early developmental stages. Driven by a commitment to preparing children for school and life, Kiddie Academy seeks entrepreneurs who share their passion for serving educational needs. As a franchisee, you'll have the opportunity to impact young lives while enjoying a balanced schedule and contributing to families' personal and professional goals within your community.

Related: Is Franchising Right For You? Ask Yourself These 9 Questions to Find Out.

8. Aqua-Tots Swim Schools

• Overall Franchise 500 rank: 118
• Founded: 1991
• Franchising since: 2007
• Number of units: 138
• Change in units: +24.3% over 3 years
• Initial investment: $984K - $2M
• Leadership: Paul Preston, President & Cofounder
• Parent company: Aqua-Tots Swim School Holding LLC

Established in 1991, Aqua-Tots Swim Schools offers swimming lessons to children globally. The brand began franchising in 2007 and now spans over 130 franchises in the U.S. and internationally. Their proven curriculum, tailored for ages 4 months to 12 years, focuses on water safety and swimming skills. For those passionate about swimming and child safety, joining Aqua-Tots Swim Schools as a franchisee offers a fulfilling opportunity to make a positive impact while growing a business in a vital industry.

Related: Don't Have Time to Start a Business? This Doctor, Lawyer and Now Part-Time Franchisee Would Disagree.

9. Skyhawks & SuperTots Sports Academy

• Overall rank: 136
• Number of units: 247
• Change in units: +44.4% over 3 years
• Initial investment: $30K - $90K
• Leadership: Jason Frazier, President/COO
• Parent company: Stack Sports

Established in 1979, Skyhawks Sports & SuperTots Sports Academy is a sports academy based in Spokane, Washington. Franchising since 2007, the academy boasts nearly 250 locations in the U.S. and internationally, aiming to instill life skills in youth through sports. Joining Skyhawks Sports & Supertots Sports Academy as a franchisee provides an opportunity for children to pursue their sports passion alongside peers, fostering community engagement with church groups, school organizations and families, while growing your franchise. With its national recognition and popularity, franchisees can benefit from a proven business model, enjoying year-long customer engagement through afterschool and weekend activities and multiple income streams from sports activities and merchandise sales.

Related: This Entrepreneur Built and Sold a Franchise for Millions. Now He's Betting Big on a $1.38 Billion — and Growing — Industry.

10. Primrose Schools

• Overall Franchise 500 rank: 141
• Founded: 1982
• Number of units: 507
• Change in units: +11.7% over 3 years
• Initial investment: $652K - $8.5M
• Leadership: Jo Kirchner, CEO

Primrose Schools , a network of accredited early childhood education providers, was founded in 1982 by Paul and Marcy Erwin in Marietta, Georgia, and began franchising in 1988. With a focus on fostering strong relationships and implementing a comprehensive curriculum , Primrose Schools has become a leader in educational childcare, boasting over 500 franchise locations nationwide. For potential franchisees with a passion for early childhood education, starting a Primrose Schools franchise offers a rewarding opportunity to make a difference in their community. Regardless of your background, Primrose Schools provides the resources and support to navigate every step of the way.

Related: She Was Unhappy at Her Engineering Job and Wanted to Help Children. Now She's Tripled Her Household Income Running a Kid-Centric Business.

11. Sylvan Learning

• Overall Franchise 500 rank: 174
• Franchising since: 1980
• Number of units: 552
• Change in units: -3.0% over 3 years
• Initial investment: $98K - $200K
• Leadership: Jeff Stephenson, VP of Franchise Development
• Parent company: Unleashed Brands

Sylvan Learning , founded in 1979 and franchising since 1980, offers customized instructional services, establishing itself as a leader in school-age tutoring across North America and Asia. As a franchisee, you'll join a business with a proven track record spanning over four decades, shaping the lives of young learners and making a significant impact on their futures through tailored learning experiences. The advantage of Sylvan Learning lies in its top-notch programs developed through decades of experience and dedication to innovation, providing franchisees with comprehensive support from both corporate and existing franchisees to address local needs effectively.

12. School of Rock

• Overall Franchise 500 rank: 205
• Founded: 1998
• Franchising since: 2005
• Number of units: 338
• Change in units: +25.7% over 3 years
• Initial investment: $441K - $594K
• Leadership: Rob Price, CEO
• Parent company: School of Rock LLC

Founded in 1998 and now boasting over 330 locations, School of Rock is renowned for its performance-based music education, inspiring children's lives through music. Joining this network allows franchise owners to indulge their musical passion while positively impacting their communities, with creative freedom to customize teaching genres, location aesthetics and staff management. Through School of Rock, franchisees play a crucial role in shaping the musical journeys of countless children, providing them with a safe and enjoyable space to learn, grow, and connect through music.

Related: Jersey Mike's Grew From Hometown Hero to National Powerhouse By Adopting This Mindset

13. Lightbridge Academy

• Overall Franchise 500 rank: 210
• Founded: 1997
• Franchising since: 2011
• Number of units: 69
• Change in units: +46.8% over 3 years
• Initial investment: $621K - $5.2M
• Leadership: Gigi Schweikert, CEO
• Parent company: Lightbridge Franchise Co. LLC

Lightbridge Academy , founded in 1997 and franchising since 2011, offers educational childcare with numerous franchised and company-owned locations across the U.S. Joining Lightbridge Academy as a franchisee means becoming part of a family-oriented culture focused on supporting and encouraging each other. If you're passionate about educating and nurturing children , a Lightbridge Academy franchise offers an opportunity to positively impact the lives of families while benefiting from a proven business model.

Related: She Was Afraid of Her Company Becoming the 'McDonald's of Mental Healthcare' Until She Realized This

14. Once Upon A Child

• Overall Franchise 500 rank: 220
• Founded: 1984
• Number of units: 408
• Change in units: +4.1% over 3 years
• Initial investment: $277K - $418K
• Leadership: Brett Heffes, CEO
• Parent company: Winmark Corp.

Once Upon A Child , franchised by the Winmark Corporation since 1992, is a leading children's resale business established in 1984. As a franchisee, you'll manage all aspects of your store's operations, selling a range of quality new and used children's apparel, equipment, toys, furniture and accessories. Located in strip malls and suburban centers, franchisees benefit from exclusive territories and support in marketing and business planning.

Related: He Opened a Pizza Restaurant to Serve the Native American Community. It Was So Successful He's Opening 20 More.

• Overall Franchise 500 rank: 223
• Number of units: 143
• Change in units: +41.6% over 3 years
• Initial investment: $536K - $1M
• Leadership: Cade Griffis, CEO

D-BAT offers indoor baseball and softball training and merchandise sales across nearly 150 franchise locations. Starting a D-BAT franchise offers an opportunity to be part of the sports community, whether you're a retired athlete or a sports enthusiast, with comprehensive training facilities and equipment provided to serve customers effectively. As a franchisee, you'll focus on enhancing players' skills by providing tailored training programs, supported by ongoing training courses for both you and your staff to maximize teaching techniques and player development.

Entrepreneur Staff

Freelance Writer, Editor & Content Marketing Consultant

Clarissa Buch Zilberman is a writer and editor based in Miami. Specializing in lifestyle, business, and travel, her work has appeared in Food & Wine, Realtor.com, Travel + Leisure, and Bon Appétit, among other print and digital titles. Through her content marketing consultancy, By Clarissa , she leverages her extensive editorial background and unique industry insights to support enterprise organizations and global creative agencies with their B2B, B2C, and B2E content initiatives. 

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Tennessee Lawmakers Back $1.55 Billion in Franchise Tax Refunds

By Michael J. Bologna

Tennessee lawmakers approved a compromise plan Thursday to overhaul the state’s franchise tax and send $1.55 billion back to business taxpayers, resolving significant gaps between House and Senate versions of the controversial tax-cutting plan. In the last hours of Tennessee’s legislative session, both chambers approved a conference committee report modifying features of SB 2103 , which would restructure the franchise tax, costing the state about $400 million annually going forward and insulating the state from a potential avalanche of refund claims from business taxpayers. For several months Gov. Bill Lee (R), the Department of Revenue, and Tennessee’s attorney general ...

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Widowed Before 40 and Coping With the Financial Consequences

People who suddenly lose a spouse while young can feel unprepared for what their future looks like.

When Rachel Brougham’s husband died in a cycling accident, she said, “my future as I imagined was stolen.” Credit... Nate Ryan for The New York Times

Supported by

By Caitlin Kelly

• April 27, 2024 Updated 3:20 p.m. ET

It was April 10, 2018, and Colin Brougham hadn’t sent his usual text to his wife that he was biking home. Instead, he lay dead a few blocks away after a commuter train struck him.

“I knew he was dead before I knew he was dead,” recalled Rachel Brougham, his widow. “My son and I went to the scene, and when I was told it was him, I screamed so loud I think all of Minneapolis heard me.”

Mr. Brougham was only 39.

“My life as I knew it changed in an instant,” Ms. Brougham, now 46, said. “My future as I imagined was stolen. Grief changes your brain chemistry. It changes how you think, how you interact with others, how you work. It literally changes every single thing about your life.”

Those widowed in their 20s and 30s, few of whom may even have a will, can feel even more stunned and unprepared — who expects to die that young?

Ms. Brougham, like anyone whose spouse dies unexpectedly, suddenly faced a variety of complex financial decisions: how to handle mortgage payments, car and student loans, leases, and credit card debts. Blinded by grief, exhausted and overwhelmed, the bereaved must also plan and pay for cremation or funeral costs.

Social Security’s one-time death benefit is only $255 , while the median American funeral in 2021 cost $6,971 (with cremation) or $7,848 (with a viewing and burial), according to the National Funeral Directors Association . Social Security survivor benefits are also available for children. Ms. Brougham’s 15-year-old son, Thomas, receives $2,149 a month until he turns 18 or graduates from high school, whichever is later.

“As a certified financial planner, and someone who specializes in supporting young widows and widowers, I’ve seen firsthand the raw heartache of this unique community,” said Brian K. Seymour II, the founder and chief executive of Prosperitage Wealth in Atlanta. “Losing your partner at a young age, whether to illness or a sudden accident, throws you into a storm of grief and financial upheaval.”

Even if it feels overwhelming, Mr. Seymour recommends getting control of your financial situation immediately.

“Gather all your financial documents — bank statements, investment accounts, life insurance policies, wills — and get yourself organized,” he said. “If you feel lost, seek professional help from a fee-only fiduciary financial adviser who specializes in young widows and widowers. We understand your unique challenges and can tailor a plan that considers your income, debt, benefits and goals.”

Those who have more time to prepare — the spouse is dying of a terminal disease, for example — also face making difficult decisions amid emotional distress.

Sarah Seib, 39, whose husband, Jason Markle, died in 2022 of amyotrophic lateral sclerosis, commonly known as A.L.S. or Lou Gehrig’s disease, had a steady job with a local technology company. Mr. Markle worked for many years at Syracuse University as an undergraduate administrator, but the demands of his disease quickly turned Ms. Seib into his full-time caregiver, costing her that income even as she owed $50,000 in student debt.

As her husband’s health deteriorated, he kept working to the very end because the couple desperately needed his income and health insurance. He communicated through a Tobii Dynavox tablet, which he used by blinking. A GoFundMe campaign provided $20,000 to help with growing costs.

Mr. Markle had a 401(k) plan, but tapping into it early would have meant paying a penalty and taxes. The day he died, Ms. Seib lost access to his health insurance. Her mother, who had moved in to help Ms. Seib financially and emotionally as her husband’s health declined, still lives in Syracuse, N.Y., with her and now pays half the mortgage.

“You need help from all sides,” Ms. Seib said. “A widow’s head is not right and won’t be right for a long time.”

Francisco Rosado, a barber and D.J. who goes by Frank Rose in Orlando, Fla., lost his wife, Rebekkah Rosado, when he was 34 and she was 33. He had been her caretaker for three years as she fought a form of Hodgkin’s lymphoma, a form of blood cancer. Ms. Rosado had run a thriving wedding planning business and kept working as much as she could, but the couple sold their house to cut expenses and pay medical bills. They also received $10,000 from a GoFundMe campaign that allowed Mr. Rosado to stop working and spend time with his wife before she died.

For many people whose spouse is from another country, communicating with family abroad can add complications or welcome support — or both, as it did for Robin Truiett-Theodorson, who, in 2008, became a widow at 36 after five and a half years of marriage to Mark Theodorson, a British man.

Her father assumed her late husband’s car payments, and her family “helped me quite a bit,” she said. Her mother-in-law in Britain sent some money, and Ms. Truiett-Theodorson was grateful their home in Baltimore had no mortgage. She deferred her student debt for 18 months and consolidated her credit card debt.

Many young widows and widowers will also have to face their spouse’s debts, which can add an enormous burden if they are not discharged by creditors.

Jeanette Koncikowski was separated from her husband, Mark, when he died two years after completing chiropractic school. Both were 36, with children 5 and 9 years old. He died of a rare condition, sudden unexplained death in epilepsy, owing about $150,000 on student loans.

“In order to finance that amount, we did a mix of private and federal loans, and he was the sole signatory, later consolidated,” said Ms. Koncikowski, now 45 and living in Eden, N.Y. “At the time of his death, I was originally told by the lender that I would have to pay them back even though I did not co-sign. They said since we were married when the debt was accrued, I was responsible for the debt.”

But once she shared her separation agreement and her husband’s death certificate with the lender, the entire debt was forgiven. “It was a small saving grace in an otherwise horrific experience,” Ms. Koncikowski said.

Daniel Kopp, a certified financial planner in Sarasota, Fla., who lost a spouse when he was 31, said it mattered when the debt was taken on.

“If it was before the marriage and the couple does not live in a community property state — there are nine — then the surviving spouse would generally not be responsible for the student loans,” he said. “Community property states can make the surviving spouse be held liable for paying the private loans if they were taken on after the marriage even if the spouse did not co-sign. It’s the classic financial planning answer: It depends.”

“Student loan borrowers who die will have their federal student loans discharged by providing documentation like a death certificate,” Mr. Kopp added. “However, when it comes to private student loans, it will depend on if there was a co-signer and terms of the loan. Some private lenders will also discharge the debt, but others may attempt to get the surviving spouse to pay.”

Personal, unsecured debts like those from credit cards are generally written off by the issuing companies, Mr. Kopp said.

“I even had a widowed client that tried to pay off the $5,000 balance, and Chase sent her back the check,” he said. “Auto loans typically stay with the vehicle, so if the spouse receives the vehicle through the will, the loan would then go to the spouse.”

Everyone who has received life insurance funds after a spouse’s death knows the mixed emotions they bring.

“It was a great sense of relief — and guilt,” Ms. Brougham said. “I thought, ‘Oh, my God, my husband’s dead and now I have one million dollars.’” In fact, she received $1.575 million from both term and whole life policies, which she invested for future needs.

Mr. Rosado received $250,000 in an insurance payout, and Mr. Kopp said he had received about $300,000. This money helped free them from financial panic at the worst moment of their young lives. In addition, life insurance proceeds are not considered taxable income .

The Broughams had bought life insurance when they were 24 and 25 and Ms. Brougham was freelancing full time for a small newspaper, even though they felt the cost was unaffordable — $1,308 a year.

Being prepared, financially and emotionally, means having difficult conversations even if you feel you’re way too young to have them. The spouses of Ms. Brougham, Ms. Truiett-Theodorson, Ms. Seib and Ms. Koncikowski didn’t have a will or do advance estate planning. But Mr. Rosado’s did.

“I didn’t think death would come in my 30s,” he said. “Maybe in my 70s or 90s.”

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