chapter 3 - the franchisor business plan

5/20/2018 Chapter 3 - The Franchisor Business Plan

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Mojado, Hazelle Anne M.


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Franchisors Business Plan

Franchisee Recruitment Package

Franchisee Operations Manual And SuccessPackage.


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Management, organization, and administrative policy Managing the marketing process Sales and marketing research

Managing the operations process Location and site selection Accounting practices and fiscal responsibilities deemed

appropriate, along with the realistic financial projections Based on the strategy to be followed and the market

conditions anticipated; management information systems And legal documentation for determining the franchisor-

franchisee relationship and anticipated activities of eachparty


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Includes disclosure documents, recruitment andadvertising brochures, and franchising agreements andcontracts.

The business logical flow of topics:

The objectives of the franchisor firm The initial capital and expected investment required of a

potential franchisee Personal and other qualifications a potential franchisee must

have Training provided by the franchisor to the franchisee Anticipated benefits and responsibilities of becoming a

franchisee


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Contains elements of the following items:

Operations manual

Financial and bookkeeping systems

Advertising and promotional packages

Sales manual

The franchisor or franchisee support package Training manual


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Contain sufficient information to enable either afranchisor or a franchisee to make a goor no godecision.

The six content sections of a feasibility study:

Executive summary

Marketing segment

Management segment

Finance, accounting, and taxes Legal requirements

Appendix


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Executive summary

It tells the story of the franchise venture and sparks theinterest of any outsiders. This summary must not bemore than three (3) pages. Attached to it is the

complete business plan or proposal. It consistcompany name, type of business, companydescription, key personnel, start-up schedule andcompetition, funds requested, funds use statements,

and fund repayment ability.


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Marketing

It concerns the distribution of goods and services toexisting and potential customers to satisfy some wantor need.


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Elements of Marketing to be analysed:

Major marketing objectives

Marketing plan and pricing strategyTarget market analysisPricing strategyMark up pricingFranchisee recruitment plan and flowchartFranchisee prospectusFranchisee sales and advertisingFranchisee location criteria selectionSite location

Grand opening planPromotion and advertisingMarketing to the franchisee


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Management

It is simply defined as getting things done throughpeople. The two main reasons for failure in businessare poor management and lack of capital.

Elements:

Headquarters organization

Franchisee organization

Operations manual Training manual

PERT chart


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Finance and Accounting

The major accounting records to be kept by a franchisor and afranchisee would at the very least include the following:

Start-up or turnkey costs (itemized)

Financial position for starting franchisors system Pro forma balance sheet

Pro forma income statement

Pro forma cash flow statement

Breakeven analysis Ratio analysis

Provision for taxation


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Financial records for the franchisee

The important financial records or position statementsfor a franchisee would include:

Start-up or turnkey costs (itemized)

Financial position for starting franchisors system Pro forma balance sheet

Pro forma income statement

Pro forma cash flow statement

Breakeven analysis Ratio analysis

Provision for taxation


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Legal Requirements

It must be Satisfied, such requirements usually rest on legal

opinion versed in franchising law. Typical factors coveredin the legal agreement include:

Business structure License, contracts, and permits Types and anticipated cost of insurance Disclosure documents (uniform franchise offering circular

UFOC) The franchising agreement itself

Conditions integral to the franchisor-franchiseerelationship Possible termination


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Appendix

It is an important visual aid containing illustrations,diagrams, analysis, and exhibits referenced throughout thefranchise feasibility study. An expanded appendix wouldinclude the complete training manual, operations manual,

advertising and promotion packages, sales manual, site andstore layouts, franchisee recruitment presentations, charts,graphs, diagrams, layouts, and other materials which mayenhance the franchise activities.


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The Franchise Pert Chart

It presents a visual sequence illustrating each developmentstep and function to be completed before a franchisorshould open a franchised business. A complete franchisePERT chart would include the following phases:

PHASE1 RESEARCH AND ANALYSIS PHASE2 ORGANIZATIONAL DEVELOPMENT

(EXTERNAL AND INTERNAL)

PHASE3 MARKETING TO FRANCHISEES

PHASE4 FRANCHISEES SELECTION PHASE5 SITE (BUILDING) AND TRAINING

PHASE6 START-UP AND FEEDBACK

chapter 3 - the franchisor business plan

Documents

franchisor business

thecomplete business

franchisor firm

type of business

afranchisee5202018 chapter

elements of marketing

apotential franchisee

marketing process sales