Feasibility Study of the Franchise

364 words | 2 page(s)

The typical content of a franchiser’s business plan is centered on keeping track of the finances involved in the process. For example, in cases where the potential franchise owner does not have the individual capital to finance the beginning of operations, investment will have to be balanced with borrowing money to develop cash reserves.

The business plan keeps track of the movement from the initial investments and tries to establish when profit will be realizable: this is not only crucial for the franchiser, but the potential investors or lenders in the project will also be potentially swayed by the viability of the plan. Accordingly, the business plan is a valuable document to multiple parties involved in the franchising process.

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In general, a business plan consists of the following categories: executive summary, company summary, mission statement, business description, market analysis, strategy and implementation summary, management summary, and financial plan. Hence, the business plan is a diverse document, containing everything from a summary of the company’s goals to its financial situation to who will be in control of day-to-day operations at the franchise. Whereas a business plan does not have to contain all these elements, in so far as it covers all these points the plan can be said to specify the degree to which the franchise’s future plans have been well thought out.

The franchising business plan clearly differs from other business plans to the extent that it is obviously rooted in franchising. Accordingly, such an approach essentially builds upon the notion that franchising is a viable business approach. Franchising provides an established brand name with which to enter the market. Furthermore, the extent to which the franchiser assists the franchisee means that an experienced perspective is given to the franchisee. The stability of the brand may thus be also accompanied by the stability of the franchiser’s approach to business, for example, helping the prospective franchisee in a diverse number of areas from ‘system sized based on number of units’ to ‘acquir(ing) linguistic capabilities while combining them with cultural sensitivities’, a crucial point in the contemporary globalized economy, where ‘the dismantling of trade barriers’ (www.franchisedirect.com) have led to new possibilities for business.

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