Creating a franchise business plan is a must for both franchisees and franchisors looking to grow. Think of it as your roadmap – it outlines your goals, strategies, financials and how your business will run day-to-day.
For franchisees, a business plan is an essential tool not just for launching a successful business but also for securing funding, attracting potential franchisees, and staying on track for long-term success.
In this guide, we’ll go through what a franchise business plan is, why it’s important, and the 7 key sections every business owner should include. Whether you’re an experienced entrepreneur or new to franchising, this guide will give you the tools to create a winning business plan for your franchise.
FAQs
This is the blueprint for making your specific franchise unit a success. It’s how you’ll run your business, grow it, and keep on the right side of the franchise’s rules and regulations.
Well to be honest, it keeps you grounded – forces you to think seriously about the money you’re putting in, what you think will happen, and what might go wrong – and helps you identify trouble spots before they cost you a small fortune.
Your day-to-day operations, that’s what. This is your playbook: it needs to cover workflow, managing your stock levels, getting hold of the supplies you need, keeping quality high, and all of it locked in tightly with the franchise’s brand guidelines.
Well you’re going to want to look at the local population, what they’re like and what they need, the competition in your area, and exactly what rights you have in terms of who you can serve – so you know who your target audience is and what you’re up against.
Why a Franchise Business Plan Matters
A franchise business plan is your roadmap for success. It outlines what you want to achieve, how you’re going to get there, and how your franchise will operate. You’ll take bits from the Franchise Disclosure Document (FDD) to fill in the key details – things like what your company’s all about, what the market looks like, and where you see your finances going.
Making sense of the numbers – and knowing when you’ll actually be breaking even – is crucial for making smart decisions. That, in turn, lets you adjust your strategy and make sure your franchise is on track for success.
Here’s a few reasons why a business plan is a big deal:
- Getting investors on board: before they hand over any cash, they need to see a clear plan for how their money is going to be used.
- Luring in new franchisees: it shows them that your business is growing and has a future.
- Keeping your team focused: it gives them a clear set of goals to work towards.
- Staying ahead of the game: a good plan lets you adapt to changing market conditions and stay competitive.
- Getting a loan approved: lenders need a solid plan to work out whether your franchise has a good chance of success before they'll even consider saying yes.
7 Key Elements of a Successful Franchise Business Plan
A business plan is basically your game plan. It keeps you focused, shows how you’ll run the business day-to-day, and helps lenders or partners feel confident that you’ve thought things through. If you use a franchise business plan template, it’s even easier to stay organized and cover the essentials.
1. Executive Summary
The executive summary is your franchise’s “elevator pitch”—a high-level overview designed to capture attention. It should clearly highlight the essence of your business, your unique value, and why it’s poised for success.
What to include:
- Franchise name and location
- What you’re selling (products/services)
- Mission statement and vision
- Target market (who you’ll serve)
- Your unique selling proposition (USP) and competitive advantage
Tip: Keep it short but strong—just enough to make someone want to keep reading.
2. Business Description
This section paints the whole picture of your franchise. It explains how your business operates and outlines the operations, structure, and long-term goals. This is your chance to give readers a sense of the business behind the brand, not just the logo and tagline.
What you need to cover:
- A brief backstory on the franchise - how it started, what it's known for and all that
- A little info on the legal side of things - do you operate as an LLC or are you flying solo?
- A brief rundown on the industry and where things are at right now
- What are your long-term goals? Are you looking to grow, open new locations, or offer more services?
- Why this particular franchise brand makes sense for your market - not just some generic pitch
The Tip: Keep it grounded, but don’t be afraid to throw in a bit of personality – why did you choose this brand, and why do you think it’ll be a hit in your local area?
3. Competitive Analysis
This section shows potential investors that you actually know what you’re getting into. You’re showing them that you’ve got a handle on the local competition and you’ve got a solid plan in place for standing out from the crowd – not just winging it and hoping for the best.
What to include:
- The names of your direct and indirect competitors - all the other franchises and businesses in your area that offer similar goods or services
- How you measure up against the competition in terms of price, service and customer experience
- What your competitors do well - and where they fall down
- Your strategy for winning over customers - how you'll offer a better service, market more effectively, or differentiate yourself from the pack
- Any local factors that you need to take into account that might change your strategy - neighbourhood quirks, demographics, seasonal swings, and so on.
The Tip: Don’t just say “they exist”, be specific about how you’re going to compete – your customer service is faster, your marketing is more targeted, or your customer experience is way better for example.
4. Marketing and Sales Plan
This section is all about your marketing plan and sales strategy plan, detailing how you’re going to draw in customers, build your brand, and ultimately bring in the revenue.
What to Include:
- Get a handle on your target market - a profile of who they are and what they're looking for.
- Decide who your target audience really is - and give them a clear description.
- Think about what marketing strategies will work best for you - that might mean social media, partnerships or maybe something else.
- Lay out your sales tactics, pricing models and any promotions you might have in store.
- Figure out what marketing materials will reflect your franchise's brand identity and look good in the process.
Tip: Remember, your marketing plan needs to be tailored to what your target market actually needs. Think about specific strategies that will really capture your customers’ interest and bring them back for more.
5. Business Operations and Management
In the operations and management section, you’ll be explaining how your franchise will day-to-day run from minute to minute. It’s pretty crucial to set out in detail the systems that keep everything ticking over smoothly.
What to Include:
- Take a close look at operational processes - from getting stock in to customer service and everything in between.
- Say who’s running the show - including your management team and their roles.
- Decide how many staff you'll need and come up with a plan for training them.
- Think about any potential challenges that might come up and how you'll handle them.
Tip: Be clear about how the business ticks over on a daily basis. This section should give a sense of how your franchise operates and runs efficiently without a hitch.
6. Financial Plan – A Key Part of Your Business Plan
The financial plan is a super important part of your business plan because it spells out all the financial basics : startup costs, revenue projections, key expenses, and the nuts and bolts of your franchise agreement to show off the true financial health of your franchise.
What You Need to Include:
- Your startup costs : this includes franchise fees, equipment, and inventory - you get the idea.
- Revenue projections for the next 3-5 years - try to be as accurate as possible.
- Your expected expenses - this includes things like rent, salaries, and marketing.
- Make sure you have profit and loss statements, balance sheets, and cash flow projections - these will give a clear view of your financial situation.
- Do a break even analysis to figure out how long it will take to start making a profit and recover your initial investment - this is key to understanding if your franchise is viable.
Tip: Don’t be afraid to bring in some experts to make sure your projections are realistic – this section should leave no doubt that your franchise can make it financially.
7. Pro Forma Financial Statements – A Look into Your Franchise’s Financial Future
Pro forma financial statements give a glimpse of what your franchise’s financial situation will look like in the future – this will show your potential to generate revenue and keep operational costs under control. And these statements are absolutely crucial for getting funding and showing that your franchise is a long-term viable business.
What You Need to Include:
- Income statements to show your revenue and expenses over a set period.
- Balanced Sheets to give a clear picture of your assets, liabilities, and the owner's stake in the business.
Projected Balance Sheet:
This outlines what you own (assets), what you owe (liabilities), and the owner’s stake in the business.
Cash Flow Statement:
This tracks money coming in and going out of your business – it shows whether you can meet your financial obligations and keep operations running.
Income Statement (Profit & Loss):
This shows your projected revenue, operating costs, and expenses over a set period to give an idea of your profitability.
Use industry benchmarks and whatever data you have available to make sure your projections are realistic. These statements will not only help you plan for success but also give investors the confidence they need to believe in your franchise’s potential.
How to Keep Your Franchise Business Plan Current
Your own business plan shouldn’t be a “write it once and forget it” thing. For franchise businesses, it needs regular check-ins so it stays useful as market trends shift, costs change, and your goals evolve—especially once you’re in the thick of franchise ownership.
Here’s a simple way to keep it updated:
- Check your numbers every month
Compare real results to your financial projections. Update the financial details—including how much revenue you’re actually bringing in and what your expenses look like now. - Adjust your marketing strategy and sales approach
If certain channels are bringing in customers, double down. If they’re not, cut them. Keep your marketing strategies and sales strategies aligned with what’s working in the real world. - Revisit pricing
Your pricing strategy should move with the market. If costs go up or competitors shift, update your pricing so you stay profitable without scaring customers off. - Keep your operations plan real
Anytime you change staffing, suppliers, hours, or systems, update your operations plan. And don’t ignore inventory management—it’s one of the fastest ways to protect your margins. - Make sure your competitive advantage still holds
Your competitive advantage can change as new players enter the market. Re-check what makes you different and make sure your plan reflects it. - Update your people and paperwork
If roles change, update your management team section. And keep key legal documents (agreements, permits, lease basics) organized in the appendix so everything’s easy to reference.
If you do quick updates like this, your plan stays practical—and you’ll make better decisions faster.
Summary
A franchise business plan is your road map to success. By including market analysis, financial projections, and operational strategies, you’ll be able to secure funding, attract franchisees and build a sustainable business.
Whether you’re just starting out or looking to grow your franchise opportunity, this guide is a framework to help you build a clear plan that stands out. To take it to the next level, consider working with a franchise consultant who can refine your approach and open up new growth opportunities.
Also download free sample franchise business plans here.
