Franchise Business Plans

Posted on June 15, 2015 By

LauraDodsonCPA Franchise Busienss Plans

Franchise Business plans are used for a variety of purposes.

Convince the franchisor that you are up to the challenge

Many franchises pick and choose between applicants.  The business plan quality is one of the sorting mechanisms.  A good quality plan will show that you have a capable team, understand how the business operates, and have a great location choice.  They are looking for people to own and operate the franchise as well repay the loan.  A professional plan goes a whole long way to establishing those credentials.

Secure Funding

Most franchises have large cash requirements in the first year.  Building a location to established standards, advertising, and operating pre-profit for a while.  Each franchise is different, however, rarely are they profitable from day one.  Do you have enough cash on hand?  Or will you need to borrow or secure the funding.  Along with a great credit score, a persuasive plan will help ensure a bank loan or funding from the franchisor.

Your lender might be the franchise owner, so they might be evaluating your net worth and your credit risk.

Feasability Study

Perhaps you are interested in learning more about how it would work before committing to buying the franchise.  Learning how those pieces go together can make the decision easier.  After all, if you are committed to spending $500K or more in the next year, it might be judicious to do so.

Operational Business Plan

Perhaps you have an existing franchise and need help creating a yearly budget and management plan.  Knowing how advertising and franchise fees affect your bottom line is essential.  An operational plan can help with that.  The Item 7’s for the FDD (Franchise Disclosure Document) statement are for three months of operating capital.  It might take longer for your franchise to reach profitability.  A critical eye looking at the statement and estimating your own startup costs might be a useful investment.

We help you craft an actionable and attainable business plan.

Note may not qualify for an SBA loan if:

  • Franchises are eligible except when a franchiser retains power to control operations to such an extent as to equate to an employment contract; the franchisee must have the right to profit from efforts commensurate with ownership
Laura Dodson
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Laura Dodson

Laura Dodson, CPA is a Seattle Financial Planning & Analysis consultant.She has attended Western Washington University, Pierce College and Bates Technical College. She has written four accounting instructional books. She has worked for small family businesses, mid-sized businesses and a Fortune 500 company.She founded and operated Blue Stone Accounting LLC for five years.She currently runs Paper Butterfly Forge LLC.
Laura Dodson
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