How to Create a Successful Franchise Business Plan

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Franchise businesses are more notable, as they have a much higher success rate than setting up a business from scratch. Developing a solid business plan for your franchise is one of the essential tasks that you must complete. This plan will assist you in thinking about and preparing for any obstacles that may come. It will also help in drafting out your expectations for your new business. Moreover, it is mandatory to show your business plan to most lenders if you plan to secure a loan. So, you should have a franchise business plan that is detailed and one that tackles all parts of the business.

If you have ever thought that developing a business plan is complicated, know that your franchisor has done a lot of the job in creating a business plan for your franchise. Franchisors can assist you in finding all the necessary financial data in their Franchise Disclosure Document (FDD)

However, there are still tasks that you should carry out. Hence, finding out how to make a franchise business plan is essential. 

Here’s a guide to making a business plan:


Executive Summary

Within the entire outline of the business plan, the executive summary will immediately come after the title page. An executive summary includes the introduction to your franchise business plan. It consists of a business summary that will attract funders and lenders. Not only that, but it also explains the vision of your goal for the franchise, alongside how you want to attain it.  

Furthermore, in an executive summary, you will have to add the following:

  • Details on the franchise’s growth potential
  • Information on how your franchise will become distinct from other businesses in the competition 
  • Risks and problems that could possibly come when beginning a franchise  
  • Details on how you will fill a gap inside the marketplace

All in all, you should demonstrate in the summary that you have a solid grasp of the business essentials.

Business Description

Having a business description of your franchise is the next part of having a simple business plan. Here, you can refer to Item 1 of the FDD to create an overview and history of the franchise. In terms of the franchise’s history that needs to be written in this section, you can inform and convince your lenders that the franchise has a history of financial success, and they can trust the franchise to fulfill its vow. Aside from this, you can include past events that support the franchise’s perception.

Other things that should be part of the section are:

  • Location of your franchise business in terms of availability and profitability
  • Outline of your target customers and how your franchise will assist them
  • Short overview of the franchise’s products and services that it will supply on the market (more details about this will be discussed in the next section)
  • The franchise’s unique selling point, which is the key feature that separates the business from others
  • Conditions of your entire relationship with the franchisor
  • Your best practices on how you will develop brand awareness once your business begins and starts running
  • Your plan on how you will promote and advertise the business’s products and services


Product/Service Description

This section explains the products and services that the business provides in full detail. You must discuss the section well to avoid confusion on the part of lenders regarding the nature of business. The section must also explain how the franchise can improve its product and service in a changing market. Note that others often incorporate this topic into the business description on other business plans. However, if you want to focus more on your products and services, you can create a section specifically for them. 

Item 1 of the FDD is a good source for the information needed in this section. Next, item 16 can be beneficial too in explaining what you as a franchisee of a specific franchise system will and will not be capable of selling. Lastly, item 16 is needed because there are usually limitations in terms of the products a franchise can sell and what it is not allowed to supply. Likewise, if your business monopolizes on a specifically popular product, then you must discuss just how extensive your selling point is.


Management Section

Your franchise business needs to discuss its management structure and any related core philosophies or values. You should identify who will take charge of the day-to-day operations, particularly you as an owner. You should also ask if the franchise is a sole proprietorship or if many owners will manage it. In terms of you being an owner, will you become an absentee owner, or will you be present in the day-to-day operation of the business? 

For you and others with an ownership stake, this section must cover, if possible, all the business qualifications that you or that other people need. You can determine all the explanations concerning the franchisee’s managerial obligations by getting the assistance of Item 15 of the FDD.

You must take note of who will fill the management positions as well. Second, know what qualifications and skills are needed for each management position. The third step is to determine the salaries and benefits you will provide the management staff. Lastly, decide how you will appoint and train the management staff needed.


Running a franchise business will be worthwhile, as it has a greater chance of succeeding than starting a business from nothing. One way to start handling a franchise is to have a business plan. A plan is an essential part of this type of business since it will help you think about and prepare for whatever issues arise. Additionally, it will help you solidify your expectations for your new franchise and receive the necessary financial help from would-be lenders who require it.

The franchisor will have already prepared the way for you by taking charge of the rest of the tasks in creating a business plan. They can support you by giving you the helpful financial information your franchise business needs. 

However, there’s still some work for you to do, so being knowledgeable about creating a business plan is crucial.