Use a Business Plan Format to Analyze and Improve Your Franchise Operation
by Ed Teixeira
Franchisors and franchisees can use a business plan as a way to evaluate
and measure the performance of their franchise operation.
Traditionally a business plan is constructed for a multitude of reasons
including starting up a new business, raising capital or using the plan as a
basis for operating the new business. The components of a well written business
plan require that key information be gathered and specific questions be
answered. As a result, the business plan can be an excellent way to evaluate the
performance of a exiting business and establish an operating plan for the
future. In this case the future could be from one to two years.
By its very nature the construction of a business plan drives the need to gather
critical information The activities associated with the construction of a
business plan can provide a franchisor and franchisee an operating tool that
touches all bases. Consider an analogy to getting a comprehensive physical exam
that includes all aspects of personal physical health including lifestyle and
The basics of a business plan will drive the entire process. The larger and
complex the franchise operation obviously the more detailed and comprehensive
the plan. Following is a suggested format to follow.
- Summarize the business and keep it short and concise: Start
with a brief overview of your franchise business strategy. Are
you in a high growth market or are you providing a product or
service that distinguishes your business from existing
- Describe the stage your business is in: How is sales
performance? Is the business meeting its sales and financial
goals? If not where is it falling short?
- Competition: Market conditions and the competition should be
included. How large is the potential market? How many franchises
or businesses are the same or similar to the one you offer?
Is the market growing, shrinking going flat?
- Consumer analysis: Which marketing promotions offer the best
vehicles for reaching your customers? Do a cost benefit analysis
of promotional programs.
- Franchise Competition: Include an overview of those firms
and their products and/or services that you are in direct
competition with. Identify the market leader and define what
makes it a leader. Emphasize those characteristics of the firm
or offerings that are different than yours. What makes your
product or service significantly better than competitive
- Operations: Review any important operational aspects of the
business. Are there any operational weaknesses? Are the
operating systems fully in place and functioning effectively?
- Staff: Focus on key people and positions. Any weaknesses in
the staff? Are changes needed?
Recap the results of the responses to provide an overview of your franchise
performance and the current position of the company. Based upon the results you
can identify areas that may require attention and focus.
© 2013 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at firstname.lastname@example.org