Franchise Application Business Plans

August 21, 2015

Franchise applications are a separate and fascinating topic that deserves our undivided attention. In this chapter we will try to give you as much information as possible about this type of application, so as to better prepare you for the process itself.


Franchising buisness plan


Definitions – Franchise Applications


The main question is, then, what is the application package that a franchisee has to prepare and submit to a franchisor? What does it have to include and what is it dictated by? What is the business plan for and how can it serve you, the entrepreneur?


Before answering this set of questions, let’s examine the four situations that you may need a business plan for in the context of franchise business operation.


Here they are:


  1. A bank or government loan application for the start of the new franchise business.
  2. In order to be able to rent a space in a prime location for the franchise operation.
  3. A bank or government loan application for the purchase of an existing franchise.
  4. In order to introduce a new franchise that is not currently operating in the country.


When you decide to buy into a franchise company and run a business under their concept and model, you will need to put together a business plan for two different purposes.


One purpose of your business plan is to apply for a government loan of the type that helps sponsor and finance small businesses. Very much like with other financing applications, this will require you to showcase that your business will be successful and you will be able to repay the loan. The plan will have to be adjusted towards the franchise business model and have all the necessary research and information included to prove that the enterprise has financial merit.


The second purpose of the business plan will be needed for is in case you will want to find a prime location to open your business, the landlord will always ask to see a business plan. This is because they will want to know exactly in what manner the space will be used, and how it will allow you, the operator, to successfully pay the rent.


Buying out an Existing Franchise


In addition to those two reasons why you will need a business plan in a franchising situation, there is a third similar scenario when you might want to do the same. When you approach an existing franchise location in order to purchase it, you can choose to use the government loan for this purpose. This will also require a business plan to be written, and it will be used to get the loan.


“Importing” a Franchise


The franchisor will not normally require a business plan from the entrepreneur, since their business model is already known and tested. The only exception to this will be if you intend to open a franchise that is not currently operating in Canada. If you are bringing a new franchise to Canada, the franchisor will definitely expect to see a business plan so as to see how you intend to run the business in this country. This will help establish that the operation will have a successful market penetration and predictable revenues.


This was an overview of the main purposes of the franchise application business plan. The next chapter will deal with the technicalities of the matter, mainly explaining about the hidden undercurrents and pitfalls that you should avoid when composing the business plan for your franchise.


If you have any specific questions, or want to schedule a free consultation with our business plan writing experts, just give us a call. We are here for you!



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