How To Franchise Your Business
- Preparing a Business Plan

Establishing a business plan will give you a complete guide on how to develop your franchising program to achieve your objectives. The process includes working with your advisors and the key members of the team. The primary focus of this plan will be to:

• Create a storyboard defining your company’s franchise offering: what markets, what strategy, rate of growth, key issues, costs, etc.
• Establish: mission, core values, strategy positioning statement, value proposition, vision, strategy, systems, internal strengths and external opportunities, internal and external threats, analysis of current systems, identification of operational issues, key result areas, major objectives for each key result area, projects and accountabilities established with time-lines.
• Identify all the critical issues pertaining to the creation of the FDD, single, multi-unit and Area Development strategies.
• Build a financial model showing the investment needed to begin generating positive cash flow.
• Construct a pro forma that reflects staffing needs, i.e. when people are brought on board, at what salary.
• Construct a pro forma that reflects accurate general and administrative expenses for the franchisor.
• Construct a pro forma that accurately reflects development, franchisee and royalty fee revenue based on a projection of when Franchise License Agreements will be granted and when the franchises will open and begin generating royalty revenue.
• Construct a strategic and operating pro forma for a franchise unit.
• Enable you to construct an accurate organization chart.

Going through this process will help you to think the way you must think to be a successful franchisor.

The first step in this process is a Strategic Planning Meeting. During this meeting we will help develop unified thinking about the critical basic concepts Management 2000 has developed over the years. If you wanted to run this meeting yourself you would need to review such items as: history and philosophy of franchising, business, creating a Customer-Centric Culture, marketing, market share, strategic-partners, franchisee/franchisor relations, leadership, recruiting excellent franchisees, new franchisee training, operations manuals. Going through this process you will get a clear overview of the different parts of the “franchising your business” project and what each individual’s responsibilities and accountabilities must be if the project is to be successful. See bullet number two in the above paragraph ("Establish: mission, core values, etc.")

The result of this meeting will be that everyone involved in the preparation to franchise knows what the expected results are for the next 90-120 days. We will also help you work through the operational issues that must be decided upon before launching the [local, regional, or national] franchising initiative.

This project will be divided into two parts: 1) Strategic Planning meeting, and 2) Preparation of the financial model. Management 2000 works with its clients to complete the financial model after the planning meeting. Without the financial component, it is impossible to implement the results of the Strategic-Planning Meeting.

Preparation and construction of the financial model includes research and with your appointed staff. It will include: (a) A franchisor financial model showing the investment needed to begin generating positive cash flow, (b) The franchisor financial model will have a pro forma that reflects staffing needs, i.e. when people are brought on board, how many, at what salary and benefits, (c) The franchisor pro forma will reflect s accurate general and administrative expenses for the franchisor, (d) A pro forma that accurately reflects development, franchisee and royalty fee revenues based on a projection of when Development and single unit Franchise License Agreements will be granted and when the franchises will open and begin generating royalty revenue.

Management 2000 has worked with over 1,300 Franchise Companies in our 29 plus years of operation. Our experience includes working with existing franchise companies as well as companies who are just getting the franchise area up and running. References are available upon request.

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