A franchisee can cover all parts of their business plan by examining the Franchise Disclosure Document (FDD) provided by the franchisor: company description, service/product description, market analysis, management structure, marketing plan, and financials.
The fundamental purpose of the franchise business plan is to be detailed and cover all parts of the business so that the potential lender understands the whole picture and is at rest with the business’s capacity to produce a profit.
Description of the Business
In this section, a franchisee gives an overview of the company and its history. Item 1 of the FDD typically contains the information needed to develop this component of the business plan.
Product or Service Description
Customers need to know what they may expect from the franchise in terms of service or product. Item 1 of the FDD normally contains this information. As a franchisee, you’ll be able to find out what products you can and can’t offer on Item 16.
Current Market Analysis
A franchise business plan must show a solid business strategy to profit within a realistic time frame with a focus on a niche market. The FDD’s territorial description in Item 12 provides additional guidance for the franchisee.
The Organizational Structure
The “day-to-day” operations of this franchise site are covered in this section of the plan. Specifying whether the business is a sole proprietorship or a partnership will be necessary to avoid confusion. This section of the FDD describes the responsibilities of the franchise owner, which may be found in Item 15.
Plan for Marketing
How will this company be able to reach its target audience? Marketing strategy lays out just how this is going to happen. Item 11 of the FDD includes an overview of the franchisor’s advertising and marketing initiatives and a description of the training the franchisee will undergo before the business is operational.
Financial Disclosure
As a franchisee, you’ll need to provide an overview of your financial status, ask for any money that’s needed, and provide a financial prediction of how long it will take the firm to pay back the loan. Items 5 and 19 of the FDD can help with this area of the business plan.
The FDD is a critical piece of information that the franchisee will need to create their business plan (FDD). It offers all the information you need to build a business plan from the franchisor.
