what is franchise business plan

How to Write a Franchise Business Plan + Template

A collage of burgers, fries, soda, and coffee cups laid out in multiple rows.

Elon Glucklich

8 min. read

Updated February 7, 2024

Free Download: Sample Franchise Sandwich Shop Business Plan Template

Owning a franchise is an excellent way for business owners to gain instant brand recognition.

By paying a franchise fee, you can own a fast-food restaurant like McDonald’s, Subway, or Kentucky Fried Chicken, a 7-Eleven convenience store, a gym chain, or even a hotel like a Marriott or Hilton.

For franchises with fees between $25,000 and $100,000, recent research indicates that the 5-year business failure rate is about 5 percent , just one-tenth of the overall business failure rate. Put simply, you have a much higher chance of success opening a franchise than a traditional business.

But getting a proven brand name doesn’t guarantee success. You’ll need to ensure you understand the franchise’s business model and expectations.

Plus, you need to determine if there’s a big enough market for your business to be successful, what potential customers expect from businesses like yours, and how many competitors you’ll face.

Fortunately, answering these questions are all part of writing a comprehensive business plan . Here are the steps to writing a franchise business plan that shows your business’s unique value—while answering critical financial and operational questions your franchisor or lender will want to know.

Ready to write your plan? Check out our selection of franchise business plan examples to inspire your own.

Why you need a business plan for your franchise business

Writing a detailed business plan is crucial for two reasons.

First , it demonstrates to the franchisor that you understand how their business operates.

Since the company sets your prices , controls your product inventory, and will likely tell you what marketing tactics you can use—the business plan puts in writing that you understand how their rules and guidelines affect your business.

Second , the plan also organizes all of your expectations, assumptions, and research about your business into one document that serves as a roadmap for success:

Business objectives
Franchisor requirements
Funding needs
Financial goals
Growth strategies

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How to write a business plan for your franchise

1. understand your franchise business model.

Since the franchisor has already established the company’s business model, your business plan should focus on how you can adapt it to be successful in your chosen location .

Imagine you’re planning to open a fast food restaurant, chain hotel, or convenience store. How do these kinds of businesses operate successfully? Consider the business models of each:

Fast food restaurant: Standard menu, streamlined kitchen operations, marketing strategy leaning heavily on national advertising campaigns.

Hotel: Efficient room turnovers, maintaining cleanliness and amenities that the brand promises.

Convenience store: High foot traffic, quick inventory turnover, and flexible operating hours.

Each case presents different business dynamics – and considerations for your business plan. You should be able to show in your plan that you understand the revenue streams and direct costs of running this type of business, and what your customer acquisition costs might be.

2. Conduct a market and location analysis

Buying into a franchise gives you some marketing advantages. You have a widely recognized brand to attract customers, access to promotional materials, and maybe even some information about customer buying patterns from your franchisor.

But operating a franchise doesn’t take away the heavy lifting of market research . Each franchise has to consider local factors that could affect its profitability.

A good starting point is to conduct a SWOT analysis , documenting the strengths, weaknesses, opportunities, and threats facing your business. Here are some other key elements to consider:

Demographic study

Employment status

Understanding the demographics of the people most likely to visit your business could help you set operating hours or decide who to target with promotions.

Competitor analysis

Identify your competitors
Compare your product or service offerings with theirs
Compare price points
Compare marketing strategies
Define the competitive advantage of your business

Don’t just look at direct competitors that are similar to your franchise. If you’re opening a 24-hour 7-Eleven, you should also look at supermarkets, drugstores, or food delivery services in your area.

Geographic analysis

Neighborhood characteristics
Population trends

A chain restaurant in a busy downtown probably has different customers and peak times than the same restaurant in a shopping center near a residential area. So it’s essential to understand the characteristics of the neighborhood you’re operating in.

Consumer behavior patterns

Technology use

Understand what drives consumers interested in your business to make the choices they do. This is where you will want to do online research and, ideally, go out and talk to potential customers.

Franchise-specific research

You should also answer questions about the competitive positioning of the franchise – and franchises as a whole – in your area.

How do similar franchises perform in your area?
What is the brand perception of the franchise you intend to start?
Is there a large enough market in the area for your franchise?
What non-franchise options are available? What are the advantages or disadvantages for customers who shop there instead?

Be sure to examine what potential customers discuss on social media platforms and online message boards like Reddit to understand what they expect from businesses like yours.

3. Highlight your unique value proposition within the franchise

Even though you’re buying into a proven business model , you’ll still face competition. Your business plan gives you a chance to put on paper what gives you a competitive advantage.

In the case of a franchise business , your franchisor may be the most important stakeholder to read your business plan. So the plan is to show them you can run a successful business under their name.

Maybe the 7-Eleven convenience store you want to open is in a location with a lot of foot traffic and no larger grocery stores nearby. Or maybe your restaurant offers late-night delivery in an area with few alternatives.

By outlining your unique value proposition in your business plan—you can align your individual strengths and market opportunities with your franchisor’s proven business model.

Backing up your unique value proposition with any data or information about customers will be especially important if you’re operating in a crowded market with lots of competition.

4. Do your own financial projections and scenarios

The franchisor may provide some guidance, but this is your business.

That means your business plan should include the same financial details and projections as if you were starting a business from scratch. Your financial plan should include:

Start-up costs : The initial investment required to get your franchise off the ground. This should include the franchise fee, the cost of equipment, initial inventory, license fees, and any expenses related to your location.

Ongoing fees and operational costs: These are costs that recur monthly or annually. They include fixed costs like franchise royalties, lease payments, and staff salaries, and variable costs like utilities, inventory, maintenance costs, and marketing expenses.

Revenue projections : Detail how much revenue you expect to bring in monthly. Forecast revenues out into the future, and don’t be afraid to make projections several years out.

Remember, good financial forecasts are meant to be adjusted as real numbers come in, and comparing your projections with actuals over time can help you make better business decisions.

Break-even analysis : This is where you calculate how long it will take for your franchise unit to cover its initial investment and start making a profit. Knowing your break-even point is essential not just for you but also for lenders.

5. Create an operational plan

Even though the franchise provides the business model, you must ensure it runs smoothly daily. Your business plan should provide a clear operational plan that outlines :

Staffing needs

You should be specific about the staffing level your business needs . You’ll need cashiers, cooks, and delivery drivers if you’re running a fast-food franchise. List the skills and experience needed for each role, and outline your plans for training new hires.

Inventory management

While a franchise agreement might take some of the pressure off of sourcing your inventory, it’s still your responsibility to develop processes for managing it.

You’ll need to understand if there are seasonal trends in your business, how often various products are returned, how long an item can sit on your shelves, and a variety of other factors that affect how much of a product you should order and when you should order it.

Quality control

Since you’re operating under a franchise agreement, you must comply with the standards the franchisor sets out for operating their business. Detail the quality control procedures you’ll put in place to meet those standards.

Also, take some time in the business plan to address how you’ll stay compliant with local, state, and federal laws and the franchise’s policies.

6. Review and adjust your business plan

The business plan for your franchise should not be a static document . Market conditions evolve, consumer demands change, and new competitors emerge. Additionally, Franchisors often update their business models, add new products, or change their marketing strategies.

You may also be expected to periodically share financial reports or general updates about your business with the franchisor. (LivePlan lets you create and share visually engaging, professional reports using information from your business plan.)

Either way, your plan should outline how you’ll account for market shifts or franchise changes in your operations. Just as important, you should make it a habit to review your business plan periodically – many business owners review their plans quarterly or even monthly, especially when starting out.

That way, they can adapt the plan as their business evolves.

Download your free sample business plan for a franchise business

If you need help getting your franchise business started, check out one of our free sample franchise business plans . You can download this document in Word form and customize it to get you started on your own business plan.

It’s just one of 550+ sample business plans we’ve made available to download.

You can also review our step-by-step guide on how to write a business plan for a detailed look at how to write specific sections of a traditional business plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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Franchise Business Plan Template

Written by Dave Lavinsky

Franchise Business Plan Outline

Franchise Business Plan Home
1. Executive Summary
2. Company Overview
3. Industry Analysis
4. Customer Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
8. Management Team
9. Financial Plan

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Franchise Business Plan

You’ve come to the right place to create your business plan.

We have helped over 10,000 entrepreneurs and business owners with how to create a franchise business plan to start or grow their franchises.

How To Write a Franchise Business Plan & Sample

Below is are links to each section of a franchise business plan example to help you start your own franchise business:

Executive Summary – This section provides a high-level overview of your business plan. It should include your company’s mission statement, as well as information on the products or services you offer, your target market, and your business goals and objectives.
Company Overview – This section provides an in-depth look at your company, including information on your franchise’s history, franchise business model, ownership structure, and management team. You will also include a copy of your franchise agreement.
Industry Analysis – In this section, you will provide an overview of the industry in which your franchise will operate.
Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your franchise from the competition.
Marketing Plan – In this section, you will detail your marketing strategy, including your marketing initiatives and promotion plans. You will also discuss your pricing strategy and how you intend to position your own business in the market.
Operations Plan – This section will provide an overview of your store’s operations, including your store layout, staff, and inventory management.
Management Team – In this section, you will provide information on your management team, their experience, and their roles in the company.
Financial Plan – This section includes your company’s financial statements (income statement, balance sheet, and cash flow statement). It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is a franchise business plan.

A business plan is a plan to start and/or grow your franchise. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your business plan using our Franchise Business Plan Template here .

What Are the Main Types of a Franchise?

About any type of business can be franchised. Franchises are categorized according to different factors like investment level, franchisor’s strategy, business operations, and marketing and relationship models. The most common types of franchises are job franchise, product or distribution franchise, business format franchise, investment franchise, and conversion franchise.

What Are the Main Sources of Revenues and Expenses for a Franchise?

The main source of revenue for a business franchise are franchise fees and royalty fees. Some also earn from other fees like distribution fees, site assistance fees, training fees, technologies, and rebates.

The key expenses for franchises are inventory, payroll, marketing and advertising, rent and loans.

How Do You Get Funding for Your Franchise?

Among the most common sources of funding for a franchising business are commercial bank loans, Small Business Administration (SBA) loans, personal savings and friends and family loans/gifts. There are also lenders that can supplement other loans with equipment financing and business lines of credit for franchise businesses.

This is true for a business plan for a franchise restaurant, a business plan for franchise store, or any other franchise business plans.

Where Can I Get a Franchise Business Plan PDF?

You can download our free franchise business plan template PDF here . This is a sample franchise business plan template you can use in PDF format.

The 7 Key Elements Of An Effective Franchise Business Plan

Adam Goldman
May 12, 2020

Franchise Business Plan | Franchise Coach

Whether you are purchasing a franchise business or expanding your current one, finances will always play a major role. To secure financing from lenders, it is necessary to prepare a franchise business plan .

However, it’s essential to have a solid understanding of the seven key elements in order to create effective franchise business plans.

A franchise business plan is not only a written document that narrates the core details of your independent business but also has a list of your objectives. It also includes the operations, the marketing strategy for growing your business, as well as the financial projections, including franchise fees. It’s crucial to address any pending request, ensuring a smooth and transparent process in the development and execution of your franchise strategy in your business plan.

For you to learn more, this post will discuss each of the seven elements needed when writing franchise business plans. So even without a business degree, you can write a convincing one.

Next Section, let’s get started by knowing these 7 franchise business plan elements.

What are the 7 Elements of a Successful Franchise Business Plan

After signing the franchise agreement , your franchisor will give you the marketing plan and other start-up information . The materials provided to you can help you start writing your franchise business plan outline. In many cases, franchisors will guide their franchisees in the writing process.

Next section, when you create a concise franchise business plan template could lead to getting a financial source to start a franchise or grow your existing franchise. So, let’s begin by knowing the elements you’ll need.

Ready to Be Your Own Boss?

1. franchise business plan: executive summary.

Which service, product, or need, does your business serve?
Is your business unique?
How will you ensure your company’s success?
Is your personal savings enough to invest a business?
What skills do you possess that will help the business excel?

The first part of your franchise business plan outline is the overview or summary of the essential information you are providing in your new franchise business or current one.

As it will explain your business, the executive summary section should answer the following questions about your franchises:

Business plans’ executive summary is the readers’ first impression of your franchises. It is a written version of your business pitch. It should clearly define your franchises and everything it has to offer in a way that distinguishes your concept.

The executive summary should read as a separate document to introduce your business plan template. It should only reference material that you’ve provided and use appropriate language for your target audience.

2. Franchise Business Plan: Business Description

The business description section of the franchise business plan template summarizes your business. This section should contain your:

company’s structure,
mission statement,
and future projections.

While you don’t need to provide detailed financial data, you should include an overview of your industry, financial projections, personal savings, tax returns, and relevant business facts in your business plan.

Next section, you should include company goals in the business description of your franchise business plan. The business description is your opportunity to share short and long-term objectives for your business with your reader.

Make sure your business goals are reasonable and quantifiable . Learn from other franchisees, and avoid ambiguous terms on your franchise business plan template. Use specific language and time frames to precisely explain what you plan to achieve.

3 . Franchise Business Plan: Competitive Analysis

Franchise Business Plan (Competitive Analysis) | FranchiseCoach

A competitive analysis section is also included in any franchise business plans. It involves determining your competitors, both direct and indirect, and your deep research will help you understand your weaknesses and strengths vs. them.

To have a handful analysis of your competitors in the business in your business plan, you need to do the following:

Select ten direct and indirect competitors to compare.
Conduct research about their marketing efforts and product features.
Then compare the gathered details to yours.

Gaining an understanding of your competitors through your competitive analysis helps you develop an effective strategy for the success of your franchise business plan and helps you get potential funders.

4 . Marketing Plan and Sales Plan

This section of your franchise business plan highlights your business’s strategy for building and maintaining a customer base and demand for your business. Thoroughly explain how you plan to advertise, your current advertising, and the research behind your strategy.

Next section, you can use the information from the required franchise training, which is the detailed information stated in Item 11 of the FDD or Franchise Disclosure Document .

So how to write a marketing plan and sales plan or your franchise business plan outline? Here are some steps to follow when creating these plans:

1. Define your target audience

Perform a market analysis to identify the specific demographic or customer segment that you should focus on with your marketing and sales plans. This will help you tailor your messaging and tactics to appeal to your ideal customer in your business plan.

2. Set marketing goals

Establish specific, measurable marketing goals that align with your franchise business plan template objectives. For example, you might set a goal to increase website traffic by a certain percentage or generate a certain number of leads through a marketing campaign.

3. Develop a marketing strategy

Outline the tactics you’ll use in your business plan to reach your target audience and achieve your marketing goals. This might include digital marketing, social media advertising, email marketing, content marketing, or other tactics.

4. Create a sales strategy

Determine how you’ll sell your franchise product or service to your target audience in your business plan. This includes setting up a sales team, developing a sales process, or leveraging existing relationships to generate leads.

5. Identify key performance indicators (KPIs)

Define the metrics you’ll use in your business plan to measure the success of your marketing and sales efforts. This includes metrics such as conversion rates, cost per lead, or revenue generated from marketing campaigns.

6. Set a budget

Determine the personal savings you’ll need or plan to execute for the marketing and sales of your franchise businesses in your business plan. This might include allocating funds for advertising, marketing technology, or sales personnel.

Take the time to develop a thoughtful and comprehensive franchise business plan template that reflects your unique business and target audience.

5. Franchise Business Plan: Operations and Management

The operation and management section of your franchise business plan template focuses on the daily operations and activities of your existing franchise businesses.

It encompasses not only the core business operations but also highlights the specific responsibilities and tasks, with a particular emphasis on your role as the owner in your business plan.

As you consider the ownership structure for this venture in your business plan, it is important to determine whether it will be a sole proprietorship with you as the sole owner, or if there will be multiple owners involved.

This section of your franchise business plan also includes the company’s staffing, logistics, and solutions to potential problems that could occur in the operation of your business. To know further details about your obligation as manager of your franchise businesses, Item 15 of the FDD will explain more.

6 . Financial Plan

The financial data portion of your franchise business plan should reflect and expand upon any facts. Also, the figures previously mentioned in your business plan template, including your executive summary. This section provides:

hard numbers for your business costs, including your franchise fees, initial costs, etc.
current funding,
and expected funding necessary in the future.

To obtain more information when starting a franchise business plan template with a franchisor, you may refer to the Franchise Disclosure Document ( FDD ).

7. Franchise Business Plan: Pro Forma

The pro forma is similar to the financial data section. But this part of the franchise business plan template focuses more on the three main accounting statements, which are:

the balance sheet
the cash flow
and the profit or loss

You can create your pro forma in four steps in your business plan:

1. Create a chart of accounts.

2. Calculate your business projected earnings.

3. Create financial projections

4. Estimate cash flows

Consider speaking with the right person, such as an accountant or financial advisor to verify your estimates and validate your proposal to lenders.

Keep your Franchise Business Plan Updated!

Keeping franchise business plans updated is essential to ensure that they remain relevant and effective in guiding your franchise businesses’ growth and success.

Here are some steps to help you keep your franchise business plan up to date:

Regularly Review Financial Performance

Continuously monitor and analyze your franchise businesses’ financial performance. Compare actual financial results with the projections outlined in your business plan. Identify any discrepancies and assess the reasons behind them. Adjust your financial projection and strategy accordingly.

Customer Feedback and Market Research

Collect and analyze customer feedback through surveys, reviews, and direct interactions in your business plan. Use this feedback to improve franchise businesses’ products, services, and customer experience. Incorporate the insights gained from market research into your business plan to refine your strategies.

Assess and Adapt Marketing Strategies

Review your marketing and advertising strategies regularly in your business plan. Evaluate the effectiveness of different marketing channels and campaigns. Adjust your marketing plan based on what is working best to reach your target audience and achieve your goals.

Evaluate Operational Efficiency

Continuously assess your franchise’s operational processes and efficiency. Look for ways to streamline operations, reduce costs, and improve productivity. Update your operations plan in the franchise business plan to reflect any changes or enhancements.

Revisit and Revise Goals

Periodically review and reassess your short-term and long-term goals. Are they still aligned with your vision for the franchise? Adjust your goals as necessary and update your business plan with these revisions.

Seek Professional Assistance

Consider working with a franchise consultant or business advisor who specializes in franchise operations. They can provide expert insights and help you update your business plan outline effectively.

In conclusion, beyond relying solely on your personal savings, there exist multiple avenues to secure funding, such as bank financing, Small Business Administration (SBA) loans, franchise fees, franchisor programs, and various lending sources in your business plan.

To furnish lenders with a comprehensive understanding of both yourself and the franchise opportunity you aim to finance in your business plan, it is imperative to include essential elements such as management resumes, tax returns, media clippings, and other pertinent documentation.

By addressing these requirements proactively of your franchise business plan , you can expedite the financing process, minimizing delays in launching your franchise.

It’s worth noting that many franchisors mandate prospective franchisees to submit a franchise-specific business plan template as part of their application process. Therefore, it is advisable to ensure your plan aligns seamlessly with their stipulated requirements and guidelines.

To learn more about franchise businesses, talk to a franchise consultant .

How to Write a Franchise Business Plan

Entrepreneurs who have decided to franchise their business owing to its past success and ability to replicate the business idea will need to write a business plan for a franchise. In many cases, this business plan will share many similarities with business plans for start-ups. However, a fundamental difference is that a franchise business plan must cover two types of target audiences: prospective franchisees as well as their customers.

In a sense, this is what sets a franchise business plan apart from other business plans that may apply to sole proprietors, limited liability companies, partnerships and others. In this article, we explore what a franchise business plan is, why it is important for your franchise business and how to write a business plan for a franchise.

Table of contents:

What is a franchise business plan?

Why you need to create a business plan, why franchisors are looking for business plans from their franchisees, important elements you need to include in your franchise business plan, how to create a franchise business plan, concluding remarks.

A franchise business plan is a document that is prepared by the entrepreneur in question when they wish to franchise a business. This document is extensive and plays an essential role in the business’ future development.

A franchise business plan is a living document that will require input from management and team members and which will be adjusted over time to meet the goals and aspirations of the business owner.

However, in short, a franchise business plan is a “roadmap” which methodically sets out how business objectives will be achieved. It can be used both internally and externally.

Internally, it can be used by management teams to check whether the business is on track with its predetermined objectives.

Externally, it is presented to lenders for financial assistance. Such lenders will then evaluate the depth, complexity and potential for profitability and returns of the business in question. They will then decide whether or not to award a prospective franchisor the necessary capital to proceed with the next step towards franchising their business and the likelihood and time frame for such capital to be repaid.

a group of colleagues creating a business plan

As a “roadmap” to a franchise business’ future structure, operations, organisational team, marketing strategy , financial projections and more, the importance of a business plan cannot be overstated.

There are several crucial reasons that you should consider when it comes to the question: why write a business plan in the first place?

Here are some of them:

Clarify and evaluate your franchise business idea from multiple angles for more certainty and higher chances of success.
Helps with goal setting and expansion/growth plans including sales, marketing and business operations.
Enables you to identify potential problems that could arise and how you can circumvent them.
It acts as a way of tracking your progress.
Gives you more clarity about your financial needs and the projected financial returns you can expect.
Assists with strategic planning over the short, medium and long term as it involves detailed research into a wide number of stakeholders.
Communicates your vision to prospective employees and investors, giving them more confidence in your franchise venture.
Attract funding from investors, banks and lenders.

When a franchisee expresses interest in a franchise opportunity , franchisors may require that these franchisees prepare a business plan.

This business plan is presented to lenders to enable them to assess whether the prospective franchisee is as thoroughly prepared for the business journey ahead to make it as successful as possible.

The primary purpose of determining this is through a detailed business plan that sets out the franchisee’s organisational structure, operations, market research, marketing plans, financial projections and more.

Whereas a franchisor can often offer help to a franchisee in developing their business plan, financial projections are typically not included by the franchisor because this could have important legal ramifications.

A further reason why a franchisor requires a business plan from their franchisees is to determine whether the franchisee is able to handle and abide by the franchise business model whilst serving the franchisor’s customers in a manner that ensures consistency across the brand.

Your franchise business plan should contain several important elements. Although these may differ from one franchisor to the next, some of the sections are standard and uniform across the board.

These may include:

An executive summary: this is the first page of the franchise business plan and contains a concise summary of everything that is contained in the remainder of the document. As such, it is usually written last. It can be divided into three sections: a business summary, business aims and a financial summary.
Company description: the company description contains information about the type of business in question, who it is led by, the background, education and previous experience of the owner and what value they bring to the business.
Mission and vision statement : the mission statement is generally expressed as a sentiment that is about one sentence long. It indicates what purpose the business seeks to achieve. The vision statement on the other hand is what the business’ meaning and purpose is for each of your stakeholders.
Business structure : since your focus is on creating a franchise business, the business structure to be clarified here is a franchise business.
Products and services : other aspects that need to be clarified are what products and/or services your business will be providing to its customers. If you are offering a variety of these, consider grouping similar ones together and describing them briefly. If you are only going to offer one product/service or a handful, you can spend more time describing each one in detail.
Industry analysis : studying the industry in which your franchise business will operate is also important to show lenders that your business idea is viable and replicable. Industry analysis will start with what other companies (i.e. your competitors) are offering the market, what prices they are asking for their products/services, where they are located and how you plan to strategically position your franchise business so that you outperform them.
Market analysis : as part of the market analysis, you will need to conduct customer segmentation. This will necessarily involve identifying your target market and their needs as well as determining strategies of reaching them and winning them over to your franchise product or service offering.
Logistics and operations: logistics and operations refer to the actual production or service delivery activities that you will be carrying out, how you will do so, at what cost, where and when, as well as how frequently these logistical aspects will need to be employed.
Marketing plan: a detailed marketing plan is created after conducting market research and analysis. The plan will contain the strategy through which customers will be marketed to in terms of new promotions/discounts, special offers, company news, raising brand awareness, boosting sales, measuring key performance indicators (KPIs), refining the strategy and measuring its success.
Franchise Marketing Plan Download
Business management and organisational structure: this section will contain details of the leadership and management of your franchise business as well as a brief outline of what skills, knowledge and experience each person brings to the table.
Financing projections/financial plan: this is possibly the hardest but most important section to prepare because it will undertake number crunching, forecasting and analysis.
Appendix: use the appendix to attach any relevant documents to support any preceding section of your franchise business plan.

Knowing more about the various elements that go into a franchise business plan, you can now proceed. Below are some steps to follow in the process of how to write a business plan for a franchise.

Step 1: Present your business and your business idea

Since you already have a successful business behind you and you are seeking to branch out into franchising, you need to indicate why your idea can be replicated successfully in different territories.

Talk about the history of the business, the ownership structure, when it started trading and its progress to date.

Discuss your products and/or services mentioning what sets them apart and what benefits they offer. Are you planning on introducing an entirely new concept to the industry? Are there any disadvantages that you foresee and how will you deal with these?

Step 2: Highlight the key features of the industry

Mention any industry regulations that must be abided by, what types of companies dominate the industry and who the major players are, what key features of the industry need to be known, etc.

Step 3: Specify your target market and competitors

Your target market and competitors should be clearly identified as should the market in which you will be operating.

Target markets and ideal customer personas should be identified including their key demographic information and what influences their purchasing decisions.

Clarify what size of market share you aim to acquire and the steps for doing so.

Outline your primary competitors. Pay special attention to emphasising what their advantages and disadvantages are compared to your franchise business offering.

It’s important to never openly criticise your competition. Instead, approach any references to them with due respect.

Step 4: Outline your marketing and sales strategy

What price will you charge for your products or services – low, mid-range or high? What is the unique selling point that you will seek to emphasise? Do your products or services have unique features and how will these be set apart from competitors? Which marketing channels or combinations thereof will you use? What are your monthly, quarterly and annual sales KPIs and how will your marketing strategy help you reach these?

What will your marketing budget be? What measures will you put in place to test, refine and measure the success of your marketing and sales efforts? How will sales be conducted – online, over the phone, or over the counter at a retail outlet? What is your anticipated cost per acquisition? How will you seek to reduce this? How will you differentiate between marketing for franchisees and marketing for your customers?

Step 5: Note your organisational structure and staffing needs

Who will sit on your management team and what skill set do they bring to the table? Who will be responsible for what department in your franchise business?

How many staff members will you start out with? What will their key roles and responsibilities be? How much will it cost you to retain your staff on a monthly basis?

Also important is the recruitment of franchisees. Will you have a dedicated team to train and support these and what kind of support will you offer? What will be the defining characteristics of your franchise offering and unique selling points?

Step 6: Clarify the intricacies of your business operations

Where will the franchise business headquarters be located? In which territories will future franchisees operate? How will the division of territories be undertaken (if any)?

Do you make use of production facilities? If so, how will you streamline your logistics processes to ensure that your franchisees benefit from these operations?

Will you need to make new investments in equipment? How is your existing infrastructure able to support future growth and further expansion?

What are the relationships with your suppliers like and who are they? What sort of pricing structure can they offer your future franchisees to enable them to optimise their investment?

Step 7: Prepare your financial forecasts

Start out by presenting your sales, income, turnover, profit and other historical figures to provide proof of your current business’ success before you turn to franchising. Going back between three to five years should be sufficient.

What is the gross margin on each product? How does capital flow in your business in terms of stock, debtors, creditors, etc.

What major financial investments have you made and what have been the results of these? Offer an updated balance sheet including a profit and loss account. Provide comparisons with industry norms.

Once the historical aspect has been taken care of, it’s also advisable to create forecasts for the next few years. If you make any assumptions for any of your forecasts, each of these should be explained and supported in full.

How realistic are your forecasts? Never try to inflate projected income, sales, profit, turnover or other amounts. Be as realistic as possible. Factor into account that payment delays may occur. How do you plan on dealing with these?

Specify the type and amount of financing you are looking for. Is it a medium- or long-term loan or an increased overdraft facility? What interest rates and instalment amounts can you afford to pay over the loan period?

Franchising your business will require a franchise business plan to put your goals into perspective and to help lenders back your business idea. And although it can be quite a detailed process, there are several key steps you can take to prepare a thorough and detailed business plan to convince lenders to support your franchise business.

In the beginning of the journey to franchising, many franchisors struggle to implement effective strategies and plans to set them up for success. But there is help at hand. Join our How to Grow Your Franchise Sustainably Without Costing Your Personal Life masterclass to find out about how the 5Fs Franchising Model has been implemented successfully across multiple global franchises and how you can achieve a greater work-life balance by prioritising better and making the most of your existing infrastructure and network.

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Franchising - main terms you must know.

Confused by the very specific terminology that’s used with regard to franchising? Don’t worry, we’re here to help you! Below, you’ll find the answers to frequently asked questions such as “what does franchising mean?”, and so many others.

Is my Business Suitable for Franchising?

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Should You Use a Franchise Consultant

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How To's

7 key elements of a good franchise business plan.

Writing a business plan is essential for any entrepreneur. However, creating one for a franchise business is different from another business type. You have to be aware of the needs of the franchisee and the franchisor. Once you have signed the franchise agreement , the franchisor will provide you with a marketing plan and other related materials. Below are the seven essential elements of a successful franchise business plan.

1. Executive Summary

This section summarizes the entire franchise business plan, including the key points and objectives. As it explains your business, the executive summary should answer these questions:

Which product, service, or need does your business provide?
Is your business unique?
How will you guarantee your company’s success?
What skills do you possess that will help you achieve your objectives?

As the first part of the plan, it should leave a positive impression of you and your business to your readers. In short, it’s a written version of your business pitch. That said, the executive summary section should clearly define your business and lay down everything that makes your business proposition unique.

2. Franchise Description

The following section presents the description of the franchise business model. This section should contain the following:

Company Structure
Mission Statement
Fiscal Projections

Although you don’t need to provide detailed financial data, you should include an overview of your business, financial projections, and critical business facts. Likewise, you should share the goals and objectives for your business with your readers. Ensure your business goals are quantifiable and avoid vague terms that will only confuse your readers.

3. Market Analysis

The third section provides a detailed analysis of the industry and market trends. To analyze your competitors in the business, you need to do the following steps:

Select ten direct and indirect competitors for comparison.
Research their marketing strategies and product features.
Compare the gathered details to business data.

4. Marketing Strategy

You should also write a detailed marketing plan that includes market research, marketing goals, pricing strategies, advertising activities, and sales forecasts. This section will discuss your plan for implementing the said strategies and activities. You can use the information from the franchise training or the detailed information stated in Item 11 of the Franchise Disclosure Document .

5. Operations and Management

This section highlights your business’s strategy for maintaining a customer base and demand for your franchise business. You need to explain how you plan to advertise, your current advertising, and the background of your strategy. It also highlights the daily operation of your business. It covers the business operations and emphasizes the franchise owner’s responsibilities and tasks. This section also includes the company’s staffing, logistics, and solutions to potential challenges during the business operation.

6. Financial Plan

The financial plan includes projected revenue, expenses, profits, and cash flow for the first few years of the franchise operation. If you’re starting your business with a franchisor, you can reference your Franchise Disclosure Document for this information.

7. Pro Forma

You should also add a pro forma that focuses more on the three main accounting statements, such as the balance sheet, cash flow, and profit of loss. You can create your pro forma by following these steps:

Create a chart of accounts.
Calculate your business projected income.
Project your liabilities and cost.
Estimate cash flows

Consider talking to an accountant or financial advisor to confirm your estimates and validate your proposal to lenders or investors.

Appendix (Optional)

Technically, the appendix is separate from the business plan but an additional section to present items that would enhance your document. Include items necessary to give the lender or investor a complete view of your franchise business. For example, you can include the resumes of management team members, tax returns, media clippings, etc.

A franchise business plan is a critical piece in accessing capital. A well-crafted business plan helps the franchise to clearly define the objectives, strategies, and techniques for a successful business operation. Also, this document allows entrepreneurs to identify potential risks and challenges associated with the franchise operation. It provides methods for mitigating or managing those risks. More importantly, this plan helps reduce the possibility of financial losses or other adverse outcomes for the franchisee. We hope this guide will inspire you to start drafting a detailed plan for the franchise business you have in mind now.

Remember to continually update your business plan to reflect your business’s developing needs. At the minimum, it should be updated when something in your business changes.

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The Rise of Paris Banh Mi Franchise

Are you gearing up for a new business in 2024? Forget the next big tech start-up -the latest trend in town might be a perfectly toasted baguette. Take Paris Banh Mi Cafe and Bakery, for instance. This Vietnamese sandwich shop is rapidly growing, with locations popping up from coast to coast, from California to Florida.

But what’s the secret behind their success? Explore why the Paris Banh Mi franchise has snowballed in the last two years and be inspired to start your own business .

About Paris Banh Mi

The French baguette was introduced in Vietnam in the mid-19th century when the country was still a part of French Indochina. In the 1950s, Saigon saw the birth of a unique Vietnamese sandwich, “bánh mì,” which quickly became a favorite food of a large part of the population.

The story of Paris Banh Mi started in Orlando, Florida, at 1021 E Colonial Drive in 2019. Hien Tran and Doan Nguyen , a married couple passionate about food, opened the first Paris Banh Mi location. Their concept was simple: bring the delicious flavors of Vietnamese banh mi sandwiches, traditionally baguettes filled with savory meats and pickled vegetables, to a broader audience.

The customers quickly fell in love with the fresh ingredients, bold flavors, and convenient fast-casual setting. Now, Paris Banh Mi Cafe and Bakery promises to bring their customers the best “Baguette Banh Mi” taste.

In just two years, the laid-back cafe and bakery in Florida multiplied into a chain of stores in the county. Today, Paris Banh Mi is serving customers in 46 locations all across the USA . The company plans to expand to 100+ locations by 2026.

Each Paris Banh Mi Cafe and Bakery has a clean and spacious dining area, fast service, friendly staff, and a selection of delicious food and pastries. Take a peek at some of their mouth-watering baguette sandwiches filled with authentic Vietnamese ingredients.

Source: Paris Banh Mi website

For those craving something sweet, the bakery indulges you with a variety of French pastries. Check out their sandwiches, pastries, and beverages on the Paris Banh Mi Cafe and Bakery menu page.

Why Own a Paris Banh Mi Franchise

Paris Banh Mi is a franchised quick-service restaurant offering exciting opportunities for aspiring business owners. Many nail salon owners and aspiring entrepreneurs are switching to buying a Paris Banh Mi franchise. The main reasons why they love Paris are:

It opens a great opportunity and is more profitable.
Seamless franchising process and fewer things to worry about
Required low capital to open
Higher end-of-year profits

The benefits extend beyond operational efficiency. Paris Banh Mi boasts a surprisingly low-cost entry point compared to other franchises.

The initial franchise fee is manageable at $60,000. The total investment for opening a Paris Banh Mi can range from $200,000 to $500,000. This amount reflects the option to acquire a pre-existing, equipped location (second generation) for a lower investment cost or a complete build-out from scratch option.

Regardless of the chosen route, the investment is significantly lower than that of building a business from the ground up, making Paris Banh Mi an attractive option for many entrepreneurs.

Licensing Information

Owning a Paris Banh Mi franchise is not just about delicious food! The company is looking for dedicated individuals who can run their restaurant full-time. They will provide a multi-day training program for new franchisees. In addition, Paris Banh Mi offers ongoing support for franchisees, guiding them to make informed decisions and thrive in this exciting industry.

You’re a good fit for a Paris Banh Mi Cafe Bakery franchise if you are:

Passionate about food, especially fresh baguettes and pastries
A self-starter with a proven track record in business
Financially responsible with a focus on results
Ready to fully commit to building the Paris Banh Mi brand

If you have what it takes, don’t hesitate to contact them through the franchise hotlines on their franchise opportunities page .

Buying a restaurant franchise is one of the most attractive routes in the world of franchising. Paris Banh Mi makes owning your own business a lot easier. Forget the high costs and headaches of starting from scratch. Their low investment and comprehensive training program mean you can be your own boss with a delicious product. If you are ready to take a bite out of success, contact Paris Banh Mi today!

Chick-fil-A Franchising Opportunities in 2024

Buying a franchise from Chick-fil-A is an excellent money-making and healthy option. The fast-food chain has been serving hungry consumers the most delicious chicken sandwiches unmatched by other fast-food restaurants. Buying a Chick-fil-A franchise means investing in a good business and your future. It also lets you continue the culture behind the popular food chain. Here are Chick-fil-A franchising opportunities that will give you entrepreneurial freedom in 2024.

Company Overview

Founded in 1946 by Truett Cathy, Chick-fil-A is deemed one of the longest-running chicken sandwich chains in the United States. The founder opened his first chain in Hapeville, Georgia, and has become a favorite soul food for many. Truett had worked in restaurants seven times a week and knew the importance of rest. That’s why he vowed to close Chick-fil-A every Sunday. He values rest and worship, so he sets aside one day of the week for his employees—a practice that Chick-fil-A still upholds today.

Chick-fil-A also selects franchisees that uphold their values and passion. The company takes great care in selecting who they do business with, which includes getting to know candidates through a lengthy and intensive selection process. The founder’s vision is to influence the people and communities they serve. Chick-fil-A also seeks franchise candidates in Puerto Rico, Canada, and the United States.

Chick-Fil-A candidates are required to show personal financial integrity and stewardship. They also need to have proven experience in leadership and a strong business acumen. Chick-fil-A ensures that candidates showcase entrepreneurial spirit, a strong character, and a growth mindset. This is to uphold the vision and values that Truett started in 1946.

Franchise Training Details

The initial on-site training programs last three to four weeks. However, the duration and actual location of the training will vary.
The training program primarily covers operational aspects, such as food preparation, service, customer relations, accounting, communications, purchasing, planning, maintenance, policies, management styles, and marketing.
The franchisor may require franchisees to attend various conferences and seminars occasionally. This is on top of the initial training program.
The franchisor may also offer various programs that operators can use in advertising products or hiring staff, which aren’t stipulated in the Franchise Agreement.

Franchise Territory

The franchisor will grant franchisees one Chick-fil-A restaurant at the franchisor’s designated location.
Franchisees will not get exclusive or protected territory, so they may face competition from other operators.

Franchise Obligations and Conditions

Franchisees must devote their time and effort 100% to operating their Chick-fil-A restaurant.
The franchisor only allows franchisees to sell products approved by Chick-fil-A. This also applies to franchisees with a Chick-fil-A-associated food truck.

Franchise Term and Renewal

The franchise term expires on early December 31, the year the agreement is signed or whatever the lease expiration is. Franchisees may apply for one-year extensions unless written notice is given 30 days before the franchise term expires.

Financial Assistance

The franchisor designates locations, leases, and subleases the store’s premises to franchisees. The lease and sublease terms will vary depending on the type of Chick-fil-A restaurant and location.
The franchisor also engages in concession agreements that oversee the utilization of non-traditional satellite unit locations with the proprietors or administrators of said satellite unit spaces.
The franchisor offers extended payment periods for specific pre-opening costs stipulated in the Franchise Agreement. Additionally, the franchisor leases equipment to operators, charging a monthly rental fee based on the fair market rental value established by Chick-fil-A using its singular and exclusive business judgment. It’s important to note that neither the franchisor nor any affiliated entities provide any financing arrangements to operators, either directly or indirectly.

Did You Know?

Here are some fun facts about Chick-fil-A you need to know!

Did you know that Chick-fil-A only uses peanut oil for frying? That’s what makes the chicken its unique flavor! Chick-fil-A is also the single most significant purchaser of peanut oil in the United States. They also believe peanut oil is a healthier option.
The best Chick-fil-A promotional gig was the “First 100,” where the first 100 customers inside a new Chick-fil-A restaurant would get free chicken for a year.
Did you know that the founder, Truett Cathy, invented the chicken sandwich? He worked for a restaurant in Atlanta, and the newly delivered chicken breasts were too big to serve as airline food. He turned this into a meal for the staff.
You can get a free ice cream cone by walking up to the counter and trading your toy when ordering the kid’s meal.

Franchise Cost

Your investment.

Here are the Chick-fil-A franchise costs:

If you’re looking for another investment opportunity, visit Franchise How’s website for more information.

Zoom Sewer and Drain Cleaning Franchise Cost

Taking care of your home’s plumbing system is an essential part of being a homeowner. However, not everyone has the skill and patience to do it, and so franchises such as Zoom Sewer and Drain Cleaning are some of the most lucrative. Here’s what you need to know if you’re thinking of getting it:

Franchise Description

Zoom Sewer and Drain Cleaning provides drain cleaning, maintenance, sewer inspections, repair and replacement services for residential and commercial customers. The business began in 1995 and had been franchising since 2013. They have their headquarters in Norristown, Pennsylvania, and Zoom Franchise Company, LLC is the franchisor.

Training for the franchisee’s principal owner and personnel will be provided by the franchisor or its representatives and agents. Before starting your franchise, Zoom Sewer and Drain Cleaning will require you to complete their training program. It comes in two phases:

Phase 1: 2 to 3 days training at the Franchise Business
Phase2: 2 to 3 days in Norristown, PA

The franchisor may also require you to attend additional training during the length of your term agreement. The franchisor is planning to hold a 2 to 3-day national Zoom Fest yearly. This will be held in Norristown, PA, or any location it designates. They will require franchisees to attend, but their managers will be welcome.

The franchisor will designate a protected territory where the franchisees will operate their business. Before signing any Franchise Agreement, both the franchisor and the franchisee will agree on a geographic territory.

The franchisor will base the protected territory on contiguous zip codes that will consist of approximately 500,000 individuals. This will be based on the most recent U.S. Census data at the time of signing the franchise agreement. This means that as long as the deal is taking effect, the franchisor or its affiliates will not locate, operate, or grant a franchise for another Zoom Sewer and Drain Cleaning business within the protected territory.

Obligations

The franchisor requires the franchisee or its principal owner to exert every effort to take responsibility for the management of the business. They will do this on a daily basis unless they agree on an alternate arrangement. With the franchisor’s discretion, the franchisee can hire a manager to handle the operations of the business.

Franchisors will also require you to sell products and services that have their approval. On the other hand, franchisees aren’t allowed to sell unauthorized products or services in compliance with the franchise agreement. Franchisees are also not allowed to solicit business outside of the protected territory. They are, however, permitted to serve customers outside of the protected territory as written in the FDD.

Term of Agreement

The initial franchise will take ten years after the signing of the agreement. You can renew the contract for another ten years, for four times, if you continue to meet the requirements.

Zoom Sewer and Drain Cleaning doesn’t offer direct or indirect financial assistance to its franchisees. In addition, they will not guarantee a franchisee’s note, lease, or obligation.

Get to know more about Zoom Sewer and Drain Cleaning before you get that franchise. Here are some facts about the business:

They have very little competition in the niche. Most of their competitors are independent plumbers and contractors
According to the company’s co-founder and COO, Ellen Rohr, this is a recession-resistant business, and the Covid-19 pandemic has proven this
They have a reported $12 million in revenue with 53 employees and 15 franchisees

The table below shows the estimated cost of a Zoom Sewer and Drain Cleaning franchise. Take note that these numbers may change without any prior notice.

Other Costs

For other franchising information, check out more articles here at Franchise How !

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Franchise Business Plan Template

If you want to start a franchise business or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their franchise businesses.

Below are links to each section of your franchise business plan template:

Next Section: Executive Summary >

Franchise Business Plan FAQs

What is the easiest way to complete my franchise business plan.

Growthink's Ultimate Franchise Business Plan Template allows you to quickly and easily complete your Franchise Business Plan.

Where Can I Download a Franchise Business Plan PDF?

You can download our franchise business plan PDF template here . This is a business plan template that will help you with how to create a franchise business plan in PDF format.

What Is a Franchise Business Plan?

A business plan provides a snapshot of your franchise as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why Do You Need a Business Plan for a Franchise?

If you’re looking to start a franchise or grow your existing franchise you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your franchise in order to improve your chances of success. Your franchise business plan is a living document that should be updated annually as your business grows and changes.

What Are the Sources of Funding for a Franchise?

Franchises are usually funded through small business loans, personal savings, credit card financing and/or angel investors.

FRANCHISE BUSINESS PLAN OUTLINE

Franchise Business Plan Home
1. Executive Summary
2. Company Overview
3. Industry Analysis
4. Customer Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
8. Management Team
9. Financial Plan
10. Appendix
Franchise Business Plan Summary

Start Your Franchise Plan Here

Start Your Search For A Franchise...

Creating a business plan for your franchise: what to prepare before asking for money.

🕒 Estimated Reading Time: ~8 minutes

Congratulations! You’ve decided that owning a franchise is the right investment for you. You may have even already decided on the type of franchise, and maybe even the franchise brand you are going to pursue.

What’s next? Financing. Securing the funding needed to make your franchise dreams a reality. And unless you are one of the fortunate people that has enough money saved to cover costs, you will likely be seeking a lender to make up the difference between the amount of money you currently have to invest and amount of money needed to open and maintain your franchised business until you 'break even.' (Breaking even is the point in the lifespan of a business where the operation starts turning a profit.)

To convince lenders that you are worthy of their money, the creation of a business plan is crucial. Lenders use a business plan as a guide to assess whether the prospective franchisee is a on a path towards success and profitability.

To approve loans, lenders want to have a clear, straightforward account of the business to be opened, the principals involved, and—perhaps most importantly—perspective on when the borrowed money will likely be repaid.

It's helpful to prepare for the meeting with the lender like a college graduate student would prepare for a thesis defense presentation. In both instances, it is the goal of the person (or people) going into the meeting to have done the adequate level of research necessary to competently back up the stated claims for the desired result (be it the granting of a master's degree to the student or the gaining of a loan for the prospective franchisee).

Important note: the business plan isn’t just for getting money.

Not only does a business plan help in securing funding, it forces you to take a hard look at the investment you are about to make. It gives you a chance to anticipate the challenges that come with opening a business, and temper unrealistic expectations.

As time passes and you move further into franchise ownership, the business plan you’ve created should be updated and utilized as a guide in helping you reach your franchise goals.

Parts of a Business Plan

Creating a business plan doesn't have to be complicated.

There is no standardized length for a business plan, but no lender wants to read a novel-length presentation. The main thing is that the plan is thorough enough to cover all aspects of your individual franchise. You want to give the lender confidence that you are prepared to take on the managing of a business that will turn a profit in a reasonable amount of time.

The key is compiling the proper information to address the reservations of the lenders you will meet with. This is where opening a franchised business offers a notable advantage over an independent business.

The franchise disclosure document (FDD) provided by the franchisor of the system you are investing in contains a great deal of the information needed to complete a business plan.

This information includes the company’s corporate background, a description of the target market, the competitive advantage of the product/service, marketing initiatives, plus the start-up and ongoing costs. Some franchisors even offer assistance to franchisees in the preparation of the plan.

Common parts of a business plan include the following, according to the Small Business Administration (a sample business plan is located at the end of this article):

Company description: A good place to look for the information for this section is Item 1 of the FDD. Provide an overview of the franchise and its history to the lender. You will also provide a brief outline of the franchise’s service/product (more detailed information will be given in the next section).

Service/product description: Describe in detail the service and/or product your franchise will provide to customers. This section can be combined with the company description. Again, Item 1 of the FDD is where you will find much of the information you need for this section. Item 16 will also be helpful in discussing what you will and will not be able to sell as a franchisee of a particular franchise system.

Market analysis: Use this section to prove to the potential lender that you are not jumping into a business venture on a whim. Concentrate on the specific area (market) in which the franchised business will be located. The territory description in the FDD (Item 12) will help you to a point.

Give a brief discussion of the following:

How big is your market?
What kind of people (demographically and financially) make up this market?
Is the market under-served in regards to this service/product?
If there is competition, who are your competitors and what is your competitive advantage?
Discuss what experts are forecasting for the service/product in terms of trends and growth possibilities for your specific market (can include demographic, legislative or environmental factors).

Management structure: This section provides a look at the people who will be responsible for the day-to-day operation of the franchise, particularly you as the owner. Is this venture going to be a sole proprietorship or will there be multiple owners? Explain if you will be involved day-to-day with business operations, or will be acting as an absentee owner.

For yourself and all of the others with an ownership stake, if applicable, detail all business qualifications. Stress any and all experience (even if volunteer) that is relevant to being successful in the future with the franchise operation. Item 15 of the FDD will help with explaining the managerial obligations of the franchisee.

Marketing plan: 'How are you going to get customers?' is the main question you’re answering in this section. Use FDD Item 11 to your advantage here. It provides an overview of the franchisor’s advertising and marketing efforts. Also, it provides a description of the training you will complete before opening. Often marketing and sales courses are part of required training.

Financials: This is the meat of your business plan. In this section, don’t only ask for the money you need. Give the lender the big picture of your financial situation as well. Detail how you are going to obtain the entire initial investment. Often times, a lender will not be financing all of the franchise investment. Are you using a mix of personal savings, loans, credit, etc.?

In addition to the funding request, you will be doing some financial projection. Give a reasonable time frame when the lender can expect full repayment of the loan, and back up that claim with figures. Include graphs and charts detailing the start-up costs, projected profit and loss and projected sales forecast for the franchise.

The franchisor can be of significant help to you in completing this section (via Items 5 and 19 of the FDD, and in direct conversation). However, keep in mind the franchisor is restricted legally about making certain claims about projected earnings. Be conservative with the projections as unexpected delays and unforeseen circumstances do happen.

Appendix: The appendix technically isn’t a part of the business plan, but an additional section to present items that would enhance your presentation. Include items you feel would be necessary to giving the lender a complete picture of you and the franchise you are seeking financing for. Examples include: the resumes of management figures, tax returns, media clippings, etc.

As previously mentioned, the best outside source of information to complete your business plan is the franchisor. No other outlet is going to know that franchise system better.

Additional resources include online sites such as Bplans.com, which offers site visitors a substantial library of sample plans to review, as well as general business websites like the Small Business Administration. Prospective franchisees can also use a professional business plan writer, particularly for the review of a plan before sitting down with the lender.

Confidentiality agreement: Because business plans contain sensitive and confidential information, the content needs to be safeguarded against potential leaks. To do this, you will need to enter into a confidentiality agreement with the parties you allow to review your business plan.

The agreement will bind them not to disclose or reveal any confidential information they receive, without your written permission.

Sample Business Plan Confidentiality Agreement Template

Sample franchise business plan: Please note that the example business plan linked below is a sample of one way to format a business plan. There are several different acceptable formats, and the contents of business plan sections will vary significantly due to factors including the franchise system, the type and amount of loan sought, the franchisee’s background, etc.

Sample Business Plan

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How to create a franchise business plan

If you’re considering the purchase of a franchise, you’re probably exploring financing options. And an essential part of that process is the preparation of a franchise business plan. It’s likely the first thing a lender will ask you for. Take note that even if you’re not seeking outside funding, developing a plan is worthwhile. Here’s a look at what’s involved.

Readily available information and data

Preparing a franchise business plan is a lot easier than preparing a plan for an independent startup business. This is because you have easy access to much of the necessary information. During the sales process, the franchisor typically provides a great deal of verbiage you can use for the narrative sections of the plan. And you can find much of the required financial information in the earnings section of the Franchise Disclosure Document (FDD) .

In addition to the typical sections in any business plan, a franchise business plan will include a section outlining the track record of and support available from the franchise company. You may include items like the franchise company’s sales brochure or FDD as attachments to your plan. This additional information can give lenders a higher degree of confidence in your likelihood of success.

5 sections of the business plan

The format of a typical business plan, whether it’s for an independent business or franchise, usually includes the following 5 sections:

Introduction

This describes the business, including the products or services the business offers, the size and competitive aspect of the market, the operational approach that will be used, and the challenges and risks associated with start-up.

Management section

This section identifies and provides background information about the people in management roles. It might include their resumes or descriptions of relevant prior experience. A franchise business plan also provides information about the franchisor’s direct support staff.

Marketing section

Here you define your target customers and how you plan to attract them to your business. This section explains the business’s competitive advantages and details marketing and advertising plans.

Pro forma financial projections

This section includes income statements, cash flow statements, and balance sheets that project the anticipated financial performance of the business. The statements should specify all material assumptions used to prepare the projections. Prepare these projections on a very conservative basis in case unexpected delays or challenges arise.

Financing needs

Even if you are self-funding the business, always prepare a section related to financing needs. This should include an analysis of all startup costs, including working capital to cover initial marketing plans and operating losses until you reach the projected break-even point. Even if you’re not borrowing from an outside source, the process of developing this section will prepare you for what’s to come in starting up the business.

You should be able to find much of the information you’ll need for the Introduction and Marketing sections on the franchisor’s website. The FDD will help you complete the Financing Needs portion of the report and, if the franchisor publishes a representation of earnings in Item 19 of the FDD , you may be well on your way to completing the Financial Projections section as well.

A helpful and worthwhile process

Some franchise companies require prospective franchisees to start and/or complete their franchise business plan prior to being approved. In any event, it’s a good idea to start thinking about your business plan early on. The process of preparing the plan is helpful in many ways. It forces you to consider options and formalize your projected course of action in the new business. You’ll typically identify questions during this process that may not have otherwise occurred to you. Contact the franchise company to get answers and make sure you have a clear understanding of the franchise prior to making a final decision to proceed.

Remember to update and finalize your business plan after completing the franchisor’s initial training. After training, you’ll have a far greater understanding of aspects like operational and marketing plans for the business. Most franchisors will also provide financial data that you can use to double-check, or even replace, the Financial Projections section of your business plan. Review your entire business plan based on your new knowledge, and you’ll be as prepared as possible to get your new franchise business up and running.

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Franchise Business Plan

You’ve finally decided to own a franchise business. Excellent. Entering a marketplace full of competitors and big industry names might seem overwhelming. However, a well-crafted business plan can provide a roadmap to success.

Are you looking to start writing a business plan for your franchise business? Creating a business plan is essential to starting, growing, and securing funding for your business. So we have prepared a franchise business plan template to help you start writing yours.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

Fill in the blanks – Outline
Financial Tables

How to Write a Franchise Business plan?

Writing a franchise business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the entire business plan is ready. Here are some components to add to your summary:

Start with a brief introduction:

Market opportunity:, mention your product or services:, management team:, financial highlights:, call to action:.

Ensure you keep your executive summary concise and clear, use simple language, and avoid jargon.

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2. Business Overview

Depending on your business’s details, you’ll need different elements in your business overview. Still, there are some foundational elements like business name, legal structure, location, history, and mission statement that every business overview should include:

About the business:

Provide all the basic information about your business in this section like:

Product distribution franchise

Management franchise, business format franchise.

Company structure of your business , whether it is a sole proprietorship, partnership or something else.
Location of your business and why you selected that place.

Mission statement:

Business history:, future goals:.

This section should provide an in-depth understanding of your business. Also, the business overview section should be engaging and precise.

3. Market Analysis

Market analysis provides a clear understanding of the market your business will run along with the target market, competitors, and growth opportunities. Your market analysis should contain the following essential components:

Target market:

Market size and growth potential:, competitive analysis:, market trends:, regulatory environment:.

Some additional tips for writing the market analysis section of your business plan:

Use various sources to gather data, including industry reports, market research studies, and surveys.
Be specific and provide detailed information wherever possible.
Include charts and graphs to help illustrate your key points.
Keep your target audience in mind while writing the business plan.

4. Products And Services

The product and services section of a franchise business plan should describe the specific services and products that will be offered to customers. To write this section should include the following:

List the services:

Create a list of the products or services your franchisee will offer. For example, if you own a fast-food franchise, you may include a menu description, pricing strategy, and specific services like takeaway, home delivery, drive-through facility, etc.
Describe each service: Provide a detailed description of what it entails, the time required, and the qualifications of the professionals who will provide it. For example, a Visual Merchandiser is responsible for creating attractive and effective displays in a clothing franchisee.

Emphasize safety and quality:

Overall, a business plan’s product and services section should be detailed, informative, and customer-focused. By providing a clear and compelling description of your offerings, you can help readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Develop your unique selling proposition (USP):

Marketing strategies:, sales strategies:, customer retention:.

Overall, your business plan’s sales and marketing strategies section should outline your plans to attract and retain customers and generate revenue. Be specific, realistic, and data-driven in your approach, and be prepared to adjust your strategies based on feedback and results.

6. Operations Plan

When writing the operations plan section, it’s important to consider the various aspects of your business processes and procedures involved in operating a business. Here are the components to include in an operations plan:

Hiring plan:

Operational process:.

For example, McDonald’s has strict SOPs covering everything, including strict procedures for cooking, assembling, and packaging food, handling customers, and maintaining a clean environment.

Equipment & Technology:

By including these key elements in your operations plan section, you can create a comprehensive plan that outlines how you will run your business.

7. Management Team

The management team section provides an overview of the individuals responsible for running the operations. This section should provide a detailed description of the experience and qualifications of each manager, as well as their responsibilities and roles.

Key managers:

Organizational structure:, compensation plan:, board of advisors:.

Describe your franchisee’s key personnel and highlight why your business has the fittest team.

8. Financial Plan

When writing the financial plan section of a business plan, it’s important to provide a comprehensive overview of your financial projections for the first few years of your business.

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:, financing needs:.

Remember to be realistic with your financial projections and provide supporting evidence for your estimates.

9. Appendix

When writing the appendix section, you should include any additional information that supports the main content of your plan. This may include financial statements, market research data, legal documents, and other relevant information.

Include a table of contents for the appendix section to make it easy for readers to find specific information.
Include financial statements such as income statements, balance sheets, and cash flow statements. These should be up-to-date and show your financial projections for at least the first three years of your business.
Provide market research data, such as statistics on the size of the industry, consumer demographics, and trends in the industry.
Include any legal documents such as permits, licenses, and contracts.
Provide any additional documentation related to your business plans, such as marketing materials, product brochures, and operational procedures.
Use clear headings and labels for each section of the appendix so that readers can easily find the information they need.

Remember, the appendix section of your franchise business should only include relevant and essential information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This franchise business plan sample will provide an idea for writing a successful franchise plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready franchise business plan to impress your audience, download our franchise business plan pdf .

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Frequently asked questions, why do you need a franchise business plan.

A business plan is an essential tool for anyone looking to start or run a successful franchise company. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your franchise business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your franchise business.

How to get funding for your franchise business?

There are several ways to get funding for your franchise business, but one of the most efficient and speedy funding options is self-funding. Other options for funding are:

Bank loan – You may apply for a loan in government or private banks.
Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
Angel investors – Getting funds from angel investors is one of the most sought options for startups.
Small business grants – there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your franchise business?

There are many business plan writers available, but no one knows your business and idea better than you, so we recommend you write your franchise business plan and outline your vision as you have in your mind.

What is the easiest way to write your franchise business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any franchise business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Franchise a Business: The Definitive Guide

March 30, 2022

There comes a time in every entrepreneur’s life where they have to decide “am I content or do I want to continue growing my business?” If you’ve reached that point, you’re probably looking for new ways to increase your business and have wondered how to franchise a business.

Mike Andes, the founder of Augusta Lawn Care , started a franchise model two years ago and now supports over 60 franchises. Next year, he plans to reach 150 franchises and he has joined us to help you prepare your own franchise business model.

Mike shared tips with us on everything from how he prepared and set up his franchise to hiring consultants, creating his franchise model, systemizing the proper support, and ongoing operations. We’ll share concepts from him and other resources to help you franchise a business.

What is a franchise business?

A franchise business is a business structure in which the owner (a franchisor) creates the legal path to allow other people to use the company’s brand name and processes to offer products or services to customers in their area.

Often, a franchise business model is used with local businesses that are confined by geographical constraints. For instance, an Augusta Lawn Care in Georgia would not do work in California, nor could the business owner be at both locations on a daily basis.

There are thousands of different franchised businesses, many of which you can find on the International Franchise Association website . Reviewing how franchises operate in your industry is probably a good first step, but Mike told us:

If there’s a franchise in another industry that you would love to have in your location, it might be a great way to get hands-on experience with a franchise. Let’s look at some other questions you might want to answer before going through the process.

How much does it cost to franchise a business?

Mike told us:

He also mentioned that most people would disagree with him and say that you should expect two to three years and $500K, but he’s always liked moving faster than other people.

How to franchise a business with no money

If you are thinking about franchising an existing business but don’t have the $100K+ to start it, there are some options. The most common ways are:

Get a loan. (Check out our preferred lenders for loans up to $5M.)
Get a partner.
Convert to a C-Corp with a retirement plan, and buy your shares with the retirement plan. (This strategy is a legal strategy called ROBS. Learn more about ROBS .)
Wait until your business has been successful enough to self-fund franchising.

He went on to explain that many franchisors never get to ten franchise locations. Instead, they go bankrupt and take down the franchisees with them.

That’s why I suggest waiting until you can independently fund franchising a business before attempting to do so. If you are barely meeting day-to-day operations, a loan and the extra work will not make it easier.

Do franchise owners make money?

Yes, but not at first. You have to spend the start-up costs to create the franchise system. You’ll need new systems in place to support your franchise program, and then you’ll need a marketing strategy that may require $10 to 20K in commissions for a franchise broker to help you find new franchisees.

Mike told us,

He also told us:

He explained how his company earns money instead. His franchise fees are:

$4K initial fee plus $699 per month for a solo operator with no protected territory
$15K initial fee plus $1,200 per month for a franchise with a five-mile protected territory

This varies from most franchise agreements that take between 5 and 10% of revenue. He feels it adds a level of trust within his franchise network to charge a flat franchise fee because the business model shows that the franchising process helps them make more money with no additional gain for him.

Listen to the podcast below to hear the entire discussion with Mike:

How profitable is owning a franchise?

I crunched some numbers based on conversations with Mike and found his business model brings in 25 to 50% of the revenue that they would if he were charging a percentage of revenue. He’s still making $2 million a year and growing though

I also took the time to see how one of the most profitable franchising businesses, McDonald’s, performs. We’ll look at the different business models below.

Analyzing Mike vs. Percentage Models

I took the statements from Mike and combined them with information from his website. Then, I compared the first three years of his franchise revenue model including a 5% royalty and a 10% royalty. I used the assumption that in all scenarios, the revenue was $39,000 per month.

As you can see, his model makes 1/4 to 1/2 as much as the revenue share business model.

Mikes franchise business model breakdown

Comparing Franchisor Profits with Corporate Store Profits: A Look at a McDonald’s Annual Report

McDonald’s had 36,521 franchise stores, and 2,677 corporate-owned stores according to their 2020 Annual Report . Their net income percentage was 24.63% overall, but I wanted to see what the differences were between running your own stores and selling franchises.

I used operating margin to establish this. When there were revenue or expenses on the Net Income Statement that were not directly attributed to franchises or corporate stores, I attributed 93% to the franchises and 7% to the corporate stores.

As you can see, if a franchise can scale globally, it is nearly five times more profitable to sell franchises and support business owners than it is to open more corporate stores.

I hope these figures help you understand the potential difference in profitability between opening more corporate stores and selling a proven business concept to a prospective franchisee. Despite McDonald’s great performance, not every franchise opportunity can grow to its size.

Like Mike said, most franchise companies don’t reach 10 locations.

Keep reading to learn more about how to start a franchising business.

Requirements to start a franchise

Selling franchises is a lengthy process that can take about a year of planning and paying franchise consultants, a franchise attorney, and potentially franchise brokers. After franchising your business, you’ll also need to find new franchisees and support their operations by giving business advice and creating new business practices.

Let’s look at 10 steps on how to franchise your business:

Prepare for franchising your business
Create a Franchise Disclosure Document
Create a franchise agreement
Establish the initial franchise fee
Establish the royalties
Establish the training program
Market your new franchise
Screen potential franchisees
Onboard each franchise owner
Ongoing support

Ready to learn how to start a franchise?

Step 1. Prepare for franchising your business

The first step of how to become a franchise owner is preparing your organization for the franchise journey. In this step you will:

A notebook and a black eyeglasses on a desk

Write a business plan focused on the franchise relationship. It should include all the normal parts of a business plan but focus on a solid expansion strategy, brand recognition, marketing tools, business systems, and supporting franchisees. Learn more about business plans .
Hire an experienced franchise consultant and franchise attorney.
If you aren’t already a limited liability company or corporation, change your business licensing to the standard for the franchise industry. Use Better Legal Services and the code UpFlip for $30 off.
Get funding, which we discussed earlier.

Once you’ve done all this, it’s time to create a Franchise Disclosure Document. Let’s discuss it now.

Step 2. Create a Franchise Disclosure Document

When you franchise your business, the Federal Trade Commission (FTC) requires you to provide a Franchise Disclosure Document (FDD) to qualified franchisees. You can find the full laws on the FTC website, but in general, an FDD needs to include:

Cover page with specific requirements
Table of contents, which is found on the same link as the cover page
Franchisor and any parents, predecessors, and affiliates
Business experience
Initial fees
Estimated initial investment
Restrictions on sources of products and services
Franchisee’s obligations
Franchisor’s assistance, advertising, computer systems, and training
Patents, copyrights, and proprietary information
Obligation to participate in the actual operation of the franchise business
Restrictions on what the franchisee may sell
Renewal, termination, transfer, and dispute resolution
Public figures
Financial performance representations
Outlets and franchisee information
Financial statements
Franchise Agreement
Any additional references not included in the previous section

This will need to be created with a franchising consultant and a licensed attorney well-versed in both federal and state laws because there may be specific requirements in each state. According to the Franchise & Business Law Group , most states have some requirements.

In addition, you are required to update the FDD for material changes quarterly, and after your annual report.

Step 3. Create a franchise agreement

A man at his desk holding a mobile phone

A franchise agreement is a legally binding contract that a prospective franchisee will sign before the franchise relationship is in place. This document will include many of the parts from the FDD including:

Your responsibilities in the franchise business operations
Any other terms that are deemed necessary by a lawyer to protect the franchisor

The signing of the franchise agreement, combined with the payment of franchise fees is the point at which prospective franchisees become a franchise location.

Step 4. Establish the initial franchise fee

A new franchisee is required to pay upfront for the rights to operate their own business using the company’s intellectual property and business processes as outlined in the FDD.

Most successful franchises will be charging enough to cover the onboarding costs and the additional system resources that will be needed during the first year.

While you can find some companies that sell franchises for as low as $3,000, most will sell franchise opportunities for amounts between $10K and $100K. 7-eleven upfront fees are $1M, but they also provide all the equipment and finance up to 65% of the fees.

When structuring your franchise fees and royalties, consider the following:

What is my revenue and profit at my location(s)?
What is the maximum fee where the new franchisee can still make a 15% net income during the first year based on company-owned units’ performance?
What is my estimated cost of recruiting a new franchise location? Mike suggests assuming $40K for each of the first 10 new locations.
What is the level of investment that will encourage only truly committed business owners to apply?
What level of investment will encourage the growth of new locations?

After you answer these questions, you should have a nice range of values for what the combined cost of the initial fee, royalty fees, and marketing fees should be. Then, it’s just a matter of how to distribute it amongst the three concepts.

Mike’s structure for his franchise system is a good way to go when you consider how to start a franchise business. He gave examples of others like Jimmy John’s and Anytime Fitness that have been successful using a similar strategy.

Step 5. Establish the royalties

Royalties are monthly fees that the franchisor charges the franchisee for using their intellectual property, vendors list, and processes. But how much money should you charge?

As mentioned before, don’t focus solely on how much you make, but also on how it will impact prospective franchisees when they are considering your franchise opportunity.

He went on to tell us about problems that can occur when you run nationwide promotions and use monthly royalty fees:

That’s bad for the FDD, bad for Subway, and bad for the franchises. If you want to have any specials that might impact profitability negatively, you probably want to consider how to open a franchise with flat monthly fees.

Step 6. Establish the training program

A laptop and a black lamp on a white desk

You’ll want to start getting the training program and business systems ready for new franchisees to be onboarded. Whether this is having them come to your location or later having them go work with a top-performing franchisee, you’ll want to have everything well documented.

Knowledge Anywhere has a great article on how to create a great franchisee training program.

Keep reading to learn about marketing your new franchise.

Step 7. Market your new franchise

Mike told us that there are three methods of marketing to get people to reach out about how to buy into a franchise:

Spend lots of money on online marketing. He warned us to expect spending of $40K per franchise for the first 10 franchisees.
Hire a broker with big commissions. He warned that broker commissions can be up to $20K, which would make it where Augusta Lawn Care didn’t make a profit on a franchise until year three.
Start building a network from the start so that you have a built-in audience from the start.

He told us:

Selling his first franchises to high-performing employees helped him get past the hardest part (the first franchise) because there were already multiple units by the time he was searching for franchisees.

Mike also told us that marketing support for new franchisees must be considered when you are learning how to own a franchise. He told us:

He went on to explain why he doesn’t run a nationwide marketing budget:

He pointed out that, for most businesses, good market data would include some nationwide market data, but with the lawn care industry, it doesn’t work. It would be too generic.

Step 8. Screen potential franchisees

Screening is another important aspect of building your franchise network. The process will normally follow this process:

Entrepreneur finds information about your franchise opportunity from a broker or online.
The person submits information and schedules a consultation.
The franchisor (or their representative) has a call with the interested party.
If both parties are interested in working together, the franchisor sends the qualified franchisee the FDD and franchise agreement.
Some do training first, then sign the agreement. Some sign the agreement first, then train. Mike requires the payment and signed agreement before training.

He gave a lot of advice on screening. here are some of the best tips he shared:

He also advised about owners who want to own multiple franchise locations:

Some franchises may allow you to book a larger territory with a lower franchise fee per location, but Mike doesn’t really feel like that model is best for his brand practices. If quality is something you are heavily focused on, I suggest you follow his lead because you’ll be able to sell more franchises, and the franchisors will be more involved.

He also explained how the franchisor grew over time:

Finally, he warned if you want to start franchising your business consider that:

Step 9. Onboard each franchise owner

Onboarding is just setting up the systems for the franchise owner, providing training, and advising them in anything that they need assistance on like marketing or supplier suggestions. You’ll want to follow the policies you created in the FDD to make sure you are in compliance with your contract.

Step 10. Ongoing support

Ongoing support will vary among franchisors. It can include:

Marketing materials as discussed earlier.
Public relations guidance if there is a scenario that can impact the whole franchise system.
Updates on training.
Training for new products and services

You want to do everything you can to help them succeed.

Now that we’ve had a look at the process of franchising a company, there are some additional considerations for franchising your business in other countries. Keep reading to find out the challenges.

Opening and operating a franchise in a different country

A white sketch pad showing different continents of the world

Many franchises hope to go global and if they can, as it can be a boost to the brand. It also comes with a lot of challenges that Mike has experienced. He told us:

He also mentioned that international franchises have to deal with currency exchanges. He has dealt with it by keeping the costs in Canadian dollars but could see having to change that if he grows to other countries.

Also, be aware that the lawyer who assisted you in starting your franchise journey may not be skilled with international business law. You’ll also have new tax requirements for supporting new locations in other countries.

In general, there are over 300 cities that have over 100,000 people in the US. Franchising your business in other countries can wait until you have at least 100 franchises so you have a good base for international expansion.

We’ve answered the common questions people have about franchising a business, shared insight from someone who has sold more than 60 franchises, and provided a step-by-step guide on the process of starting your own franchisor. I want to leave you with this last piece of advice from Mike:

If you found the podcast and our blog useful. Subscribe to our channels so you’ll get more great information on starting, selling, and buying businesses.

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How to Start a Trucking Business and Earn $100K/Month (2024)

How to Start a Trucking Company in 7 Steps

Want to get into one of the fastest-growing industries in the country? The trucking business isn’t known for its high profits, but that changes when you start hauling 80,000 pounds per truck. That’s right! We’ll learn how to start a trucking business with expert advice from a trucking company.

Mikael Sant, the founder of Sant Lines, is ahead of the game. He started Sant Lines in May of 2021 at the age of 19. The trucking company made over $159,000 in revenue in the first six months. That’s more than many owner-operators make in a year. He has grown to four trucks, expects to have 100 in seven years, and is working to be a dominant force in the industry.

We’ve outlined the process to start a trucking company in just 7 steps. Click any of the links below to jump ahead.

[su_note note_color="#dbeafc"]

Step 1. Know the Trucking Business

Step 2. starting a trucking company business plan, step 3. secure startup funding, step 4. is a trucking business hard to start, step 5. get customers, step 6. manage your trucking business finances, step 7. trucking companies need admins, how to start a trucking business frequently asked questions, so what’s the best trucking business to start, quick warning.

Before you even consider operating a trucking company, you should:

Get a DMV printout: If you have a DUI, vehicular manslaughter, or other charges, you will not be able to get a job or insurance.
Have no convictions for drugs, felonies, violent crimes, or fraud: It will be difficult or impossible to qualify for a job, insurance, or getting an authority.
Check insurance price: . Mikael spends $45,000 per year for his insurance because he is a new CDL driver.
Understand Finances: Every load you accept will have costs that impact it. Real simply, if you can’t multiply and calculate percentages, you are likely to struggle immensely. You need to be able to calculate the costs based on mileage and the weight of load. To make good money, you’ll need each load to be at least three times the cost.

How to Start a Trucking Business Case Study: Sant Lines

Mikael is a serial entrepreneur. He owns:

Sant Logistics & Freight LLC
Rettig & Sant LLC
Squeaky Clean Pressure Washing & Paint LLC
VESTALO LLC

Check out our interview with him below:

[su_youtube url="https://youtu.be/-8TnsjDRXUE"]

You can write your own success story in trucking by following Mikael's advice with these seven steps.

Most of us are familiar with trucking on some level, whether it's seeing big rigs on the road or utilizing local moving companies. Behind the products we receive from those giant trucks, plenty of government regulations ensure every trucking company delivers products safely.

If you haven’t worked in a trucking company, it’s important to get some industry experience and specific licenses. You might want to work with a moving company to learn about the industry.

How do truckers make money?

Very simply, truckers make money based on miles and weight as they transport products. A trucking company operates under one of four main NAICS codes:

48412 Long Distance Trucking
48411 Local Freight Trucking
48422 Local Specialized Freight Trucking
49222 Courier and Local Deliver Services

Trucking businesses charge different amounts based on what they are hauling and where they are hauling it. I combined the IBIS World statistics for the four sectors and found that the industry makes $557.2 billion in annual revenue and $33.2 billion in profit. Check out the rest of my findings below:

How much can you make owning your own trucking company?

The average trucking company has over $410K in revenue. Specialized freight makes the most at over $860K, while the others earn far less. If you plan to start a trucking company, it’s reasonable to assume you will make no more than the following amounts during each of the first few years.

Long Distance Freight : $461K
Couriers : $364K
Local Freight : $282K

Learn more on our podcast where we discuss trucking with Mikael.

In the podcast, Mikael explains how he built his company from the ground up, including startup costs, and how he's adapted to new systems as his company has grown. Plus, he talks about some surprising obstacles he's had to overcome to keep the company running.

Is owning a trucking business profitable?

Young man wondering with a 12-wheeler truck drawing illustration above

Yes, owning a trucking company can be highly profitable. The average trucker makes around $54K per year in wages and another $6,000 in profits, assuming they meet industry averages.

Mikael currently makes over $135K per year. He only drives in case of emergencies and pays his drivers to do most of the driving. So it can be highly profitable to start a trucking company without driving consistently.

New trucking businesses

More and more truckers choose to go out on their own once they have gotten some experience. In fact, owner-operators have the highest rate of solo entrepreneurs in the United States.

That’s because they can make a great living. Assuming the 4.2% rent is helping pay off their homes, that means the average business owner is paying off around $17,000 of their mortgage as a business expense.

Follow Commercial Truck Regulations

When you start a trucking company, it is important to understand you are entering one of the most regulated industries in the United States. If you provide long haul services, you’ll need to register with multiple agencies including:

Department of Transportation
Department of Labor
State Agencies (in every state you operate in)

Mikael told us:

[su_quote]For e very state you have to be 18 to get a CDL, and 21 to get cross-state licenses. [/su_quote]

[su_quote] I focus mostly on running the business, but there are times when I have to drive too. It cost $4,500 to get my CDL. [/su_quote]

All of these costs add up, of course. Let's have a look at the hard numbers so there are no surprises when you start to pay your startup expenses.

How much does it cost to start a trucking business?

You’ll want at least $50K-$60K to start a trucking company. Mikael explained the startup costs for a trucking company, which include the following:

Truck : $32,000 (10 years or newer)
Refurbished Trailer : $9,500 (currently worth $30K)
Repairs : $6,000
Fuel : $2,000 (first week)
Insurance : $4,500 (down payment and first month)
Permit : $950 per truck
IFTA : $2,800 to get cross-country license plates
Total : $57,750

The good news is:

[su_quote] We made our money back in the first three months and have been profitable since. [/su_quote]

How to start a trucking company with no money

Yes, many major transportation businesses offer company drivers the ability to transition to owner-operators after working with them for a certain amount of time. They do this by setting up brokerages, leasing companies, and load boards.

The leasing company leases the owner-operator a truck in exchange for the truck company owner committing to a multi-year contract with them. At the end of the contract, you have your own trucking company and truck owned outright.

We’ll discuss the leases more in later sections, but first let's check out more resources to learn how to start a trucking company.

More resources for trucking businesses

screenshot of greenhouse gas emission from trucking.org website

There are industry organizations that you’ll want to follow to stay up to date on the trucking industry. These are some of the biggest in the U.S.

American Trucking Association (ATA) : The ATA is the largest group that collects industry data, lobbies for the industry, and provides info for trucking companies, moving companies, suppliers, and companies that need shipping.
Transport Topics : This group publishes a variety of information about the industry including a Top 100 For-Hire list. FYI you need to make $244 million or more to be in the top 100.
US Environmental Protection Agency (EPA) : The EPA is tasked with regulating environmental concerns. Remember to pay attention to their rules involving trucking and agriculture because most trucking companies will be impacted.
US Energy Information Administration (EIA) : Be sure to pay attention to the transportation reports from the EIA if you haul oil and refined products.
America's Independent Truckers' Association Inc. (AITA) : Larry Daniel started AITA in 1997 to give independent truckers the same purchasing power as major conglomerates. It’s $10 per year for membership or $180 for fleets. If you find better discounts anywhere, they ask you to gather as much information as possible and send it to them so they can secure the same deal for all.

As the saying goes, if you fail to plan, you plan to fail. You need a solid business plan. Trucking company business operations comply with numerous regulatory agencies. Your truck company business plan should address all aspects of the business that are essential to your success.

The business plan dictates the plan of action. Once you have some knowledge and experience in the trucking industry, writing your new trucking company’s business plan is the next logical step.

Your business plan is your venture’s founding document, and it will be the reference point for all business decisions moving forward. You want to put time and effort into composing the business plan because a well-written one will help improve the probability of business success.

Luckily, there are great resources for entrepreneurs who are writing their own business plans. Check out our business plan template and watch our interview with Mike Andes below.

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The Small Business Association (SBA) is part of the federal government and provides a step-by-step guide to writing your business plan.

Truckstop.com also has a guide to writing a business plan for trucking companies.

Keep reading to learn how to identify the target market for your own trucking company.

Identify the target market

Notebook with list of trucking business target market

Your target market will mostly be businesses when you open your new trucking company. Depending on the type of truck, you might want to build relationships with different kinds of businesses. Some businesses that consistently need truckers include:

Distributors
Car manufacturers
Agricultural businesses
Marijuana growing facilities
Moving companies
Car dealerships

You’ll want to build relationships with load boards and brokers like datboard and truckstop.com , but Mikael also wins a lot of business with word of mouth recommendations. You’ll probably also want to consider seasonal fluctuations. Mikael told us:

[su_quote] Everything is good during winter. $75K monthly and summers around $125K. Potato season is July to November, but our best run on a per-mile basis was Oregon to Phoenix. It totaled $6 a mile or around $9,000. [/su_quote]

It can be hard to describe your market accurately, but it’s a critical assessment to make. Market research firms gather data that are good for validating your original research. It’s worth considering hiring one if you aren’t confident in your research methods.

You can find a guide to market research for new businesses at Entrepreneur, and Joe Gardiner, CEO of VentureDevs , has a complete guide to market research at Forbes .

Define your business structure

screenshot of filing LLC from irs.gov website

Because of the investment, you’ll probably start a trucking business as a Limited Liability Company (LLC). A trucking LLC filing as an S-Corporation is the prevailing business structure when someone starts a trucking company.

Limited Liability Companies can opt for the business entity to be treated as an S-Corp for tax purposes. You just have to file an 1120-S with the Internal Revenue Service.

A successful trucking company will find this business entity and tax structure beneficial because they will be able to:

Pay themselves a salary.
Receive various personal liability protections.
Separate business and personal assets.
Save money on taxable income over $200,000.

Running your business in this method provides a good balance of liability protection and business structure if you choose to grow beyond a solo entrepreneur. Almost every successful trucking business will use either this structure or a C-Corporation.

You might want to hire a law firm to form your corporation because it’s easier to head off any problems as the business is formed rather than to go back and change your founding documents or business protocols once issues arise.

Check out our business hub for more in-depth information on business licenses and entities. Alternatively, review the Small Business Administration startup guide for more information.

Choose your trucking business name

Your trucking name can reflect your geographic origins, or it can be more abstract, or even the name of the founder. Sant Lines uses Mikael’s last name.

Choosing your trucking name is an important consideration that can affect both the present and future of your business.

For example, naming your company the Trucking Business of North Carolina may attract customers in your home state that want to do business with local trucking companies, but it might hinder your expansion outside of your state.

For some help with choosing a name for your business, check out our guide and business name generator . Alternatively, Forbes has a guide, as does The Balance.

Once you’ve determined your trucking name, run searches at your Secretary of State’s website and get a domain name from sites like GoDaddy or NameCheap .

Address start-up and operations costs

Your plan should outline the source(s) of your capital plus how and when investors will be paid back. Outline your operational costs carefully. For a trucking company, there are three main sources of operations costs:

1. Purchases

The primary costs associated with trucking are purchases including gas, maintenance, and repairs. These will be nearly ⅓ of your business expenses, so make sure to calculate them effectively. That means if you are doing long haul trucking, you should assume $153,667 of purchases per truck each year.

Your wages and any employee wages will be up to 29% of the revenue. That means you should assume you’ll be paying up to $133,690 if you are making the average amount for a long haul trucker. On average wages are around $55,000 per year across the industry.

3. Miscellaneous

The third largest expense relates to other costs like technology, miscellaneous business expenses, and taxes. These account for approximately 25% of revenue. I have created an automated 10 year calculator that estimates the revenue, expenses, and profits when considering the compound annual growth rate (CAGR) and how many trucks you want to add each year. Feel free to download it and try it out.

How much does a trucking owner make?

An owner-operator will normally pay themselves a salary plus profits paid out as either a dividend or return of capital. If you run as a sole operator, you need to make sure you set your pay correctly. There are a few ways you might fall under on the Bureau of Labor Statistics site :

Heavy Truck Driver : $51,790
Operations Manager : $106,630
Top Executives : $109,880
Chief Executives : $198,610

In addition, an average trucking company would offer around $20,000–30,000 in profits which can be treated as dividends. If you pay yourself less than the $106K salary, which I suspect most would for the first few years, do not give yourself more than a $30K dividend check unless you want to risk an audit.

(I’m not a tax attorney, but I know enough that you don’t want to deal with IRS audits. If you make enough to pay yourself $200K, it is the safest bet.)

Consult a corporate attorney to get legal advice.

Once you’ve put together a plan, it’s time to start considering how to secure startup funding. As Mikael stated, you’ll need around $50K to $60K just to make it through the first couple of months. If you factor in the first year, you’ll need almost $300K, and to make it through the first five years you can expect to need over $2 million. These numbers do not include wages or depreciation (because depreciation is not a hard cost).

Most business owners start their trucking company with personal savings or by borrowing from friends and family, but you can also qualify for equipment financing and other loans that use the truck to back the loan. We suggest reaching out to National Business Capital first because they offer flexible financing options and work with you to find the best loan for your business from over 75 lenders.

Crowdfunding

If your business will serve a particular community or industry, you might be able to use crowdfunding to get the startup costs. Of course, you’ll normally have to offer them something like discounted pricing or a free local delivery depending on how much they contribute.

Kickstarter is a popular site for business funding. If you’d like to learn more about the Kickstarter process, check out our interview with Pooch Selfie’s founder .

Major fleet owner-operator lease programs

While talking with one of my relatives about how to get into the trucking industry, he advised going through one of the major fleets to get financing. The way they work is they basically finance the truck in exchange for a contract of five years. After those five years, you own the truck.

He warned that you need to be cautious with these, however. Some of the fleets are a bit shady. If you are making less than $400 per day, they aren’t doing right by you. In addition, after five years you should absolutely own the vehicle. Make sure to read the contract carefully.

I asked about the best ones. He specifically mentioned:

Knight Transportation (From Arizona)
Werner Enterprises (Based in Nebraska)
Schneider (Based in Wisconsin)

A person in an orange outfit holding a paper holder board

A trucking business isn’t hard to start, but you will have some unique requirements that most business owners do not.

First, you’ll need to get your commercial driver’s license (CDL). You’ll also need to perform the following tasks when you start a trucking company:

Get your CDL.
Get a truck and trailer.
Submit IFTA Form 290.
Apply for insurance.
Register with the federal Department of Transportation (DOT).
Join the International Fuel Tax Alliance.
Get an IRP plate.
Let’s look at the considerations.

Get Your Commercial Driver's License

To drive a semi-truck, you’ll need a commercial driver's license. Each state has different requirements, but most consist of the following:

Be of good health based on hearing and response times, but there are other reasons you might not qualify.
Pass background and driver safety checks.
Get your state CDL manual from the Department of Motor Vehicles. Some states use alternate names .
Take a commercial permit knowledge test.
Go to a third-party commercial driving school. The manual should list licensed schools.
Take the driver test.

[su_quote] I don’t normally drive, but you’ll want to have the license in case one of your drivers calls out. [/su_quote]

He suggested JJ Keller for the school.

Next, you’ll want to apply for insurance because many of the following steps require it.

Buy A Truck

Age : Under 10 years old
Mileage : Under 750,000 miles
Brands : Kenworth, Volvo, Peterbilt, Freightliner, Western Star
Features : Sleeper included for long haul trips
Market Price : Should be market price or slightly below to get the best value

[su_quote] I try to stay between [the] $50 to $70 thousand range for used trucks that have between 450K miles to 650K miles. [/su_quote]

He also suggested bringing someone with you that can check the engine and transmission. They will be able to provide reasonable estimates for the cost of repairs and help you negotiate the price.

Types of Trucks

Trucks in the United States are rated by the gross vehicle weight rating (GVWR). The GVWR is a rating that manufacturers use to specify the maximum weight that a vehicle can operate safely. This weight includes the truck, trailer, gas, occupants, and freight. There are eight basic levels including:

Passenger vehicles (light duty) : Classes 1, 2a, and 2b have a GVWR of under 10,000 pounds. These also include popular trucks and SUVs like the Ford F150 and some box trucks.
Medium duty vehicles : These go in Classes 3-6, which are below the 26,000 pound GVWR. Common vehicles in this class include Ford F350 to F650, Silverado 3500 to 6500, and Ram 3500 to 5500. A box truck company will fall in this category as well as some smaller semi-trucks with sleepers.
Heavy duty trucks: Class 7 is 26,001 to 33,000 pounds, and Class 8 is over 33,000 pounds. These are the big boys, and they require a CDL.

The federal government requires heavy-duty trucks to have a commercial driver's license, but each state has its own policies. California requires any vehicle over 6,000 pounds and 3 axles to have a CDL.

Tow trucks and other vehicles may also require CDLs. To learn more about tow truck driving, check out our interview with K.O. Towing below:

[su_youtube url="https://youtu.be/pk4B1Q28SCs"]

Types of Trailers

There are a ton of different trailers you can use for trucking. It just depends on what you need to carry. Some of the most common are:

Dry Van Trailers: Standard trailers are 53 feet long and around 45,000 pounds maximum weight.
Standard Flatbed Trailers: These trailers are great for products that don’t need to be protected from the elements.
Refrigerated Trailers (Reefers): If you transport food, you’ll need temperature control with a max weight of 42,000–45,000 pounds.
Drop-Deck, Step-Deck Trailers : These are similar to flatbeds but prevent height problems, and are up to 53 feet long.
Double Drop, Lowboy Trailers : Double Drops are higher at the front and the back and carry 40K–80K pounds.
Hotshot Trailers : This low-lying flatbed is 30–40 feet long, but only carries 16,500 pounds and is usable with Class 3 to 6 trucks.
Conestoga Trailers : If you need a flatbed with a sliding tarp cover, use a Conestoga trailer.
Curtainside Trailers : Need a dry-van with a solid front, top, and back, but tarp curtain sides to make it easier to load from the side? Curtain Trailers are the answer.
Extendable Drop-Deck Trailers : These drop decks are built for lengths longer than 53 feet.
Removable Gooseneck (RGN) Trailers : Use these to drive vehicles onto the trailer.
Extendable RGN Trailers : These RGN trailers extend based on the length of your load.

Watch the video below to learn more about these trailers:

[su_youtube url="https://youtu.be/fkNaIQOEd34"]

They don’t mention tankers in the video. You can transport hazardous waste or oil products, but those will require specialized licensing and knowledge. You are better off getting some miles on the road before you start hauling these products.

When first starting, you’ll probably only be able to choose one type of trailer. I’d probably go with a reefer or drop deck as they will offer you the most versatility. That sounds consistent with what Mikael told us:

[su_quote]I offer 4 main services:

Refrigeration and frozen food (best in summer and fall)
Flatbed for construction (springtime does best)
Power only: Amazon is the biggest customer I have just 'cause of their volume
Towing: I’ve delivered as far as Nevada[/su_quote]

Fill out Form 2290

You’ll need to pay your heavy use taxes to the IRS before you can start driving. You’ll use Form 2290 and either apply for an exemption or pay up to $504.17 (subject to increase). You won’t be able to get your authority or IRP License without proof.

Get your trucking insurance

You’ll need active insurance coverage including public liability insurance. The requirements vary based on state and federal laws, but you will need at least $750,000 of Bodily Injury (BI) and Property Damage (PD) liability insurance coverage. If you will be transporting hazardous materials, the requirement is $5 million.

The ATA has an agreement with Sentry as a preferred insurance provider. Most major insurers also have a commercial truck insurance product, or you can also find specialized truck insurance from companies like Owner Operator Direct .

Become a trucking authority

screenshot of license operating authority from fmcsa.dot.gov website

To run an interstate (operating across state lines) business in the U.S. transportation industry, you will need to get licensed as an operating authority with the Federal Motor Carrier Safety Administration ( FMCSA ). To apply, you’ll need to:

Get your Department of Transportation (DOT) number here .
Get the proper insurance .
Apply for the Operating Authorities you wish to qualify under. There are multiple types .
Pay $300 fee per Operating Authority.

When you perform these steps you will have a temporary operating authority for your self-owned trucking company. The DOT has to perform an audit before you have a permanent operating authority. These are not actually permanent, however, as they will take it away if you do not operate under the laws.

Join International Fuel Tax Association (IFTA)

You’ll want to join the International Fuel Tax Association. It was created under the International Fuel Tax Agreement to simplify the payment of fuel taxes in the continental United States, Alaska, and Canadian provinces.

Truckers are required to pay fuel tax based on the percentage of miles they drive in each state. To simplify the administrative costs, each jurisdiction handles its own member applications, tax returns, and audits. Read up on how it works on the IFTACH website .

You’ll need to apply at your local office and pay a fee which will provide you with two decals to prove your membership.

International Fuel Tax Association regional membership map

You can get more details on the IFTA website .

You’ll need to file a tax return every year for your gas tax. Fortunately, you just file with your state and they’ll distribute it accordingly. You’ll need to track your miles and time in each state to pay the appropriate taxes whether you bought gas in that state or not. You can use a log book or an electronic log (elog). I talked to a relative that is a truck driver and he warned:

[su_quote] Be careful with elogs. When GPS goes down, and it frequently does, they may not log the miles. In addition, when they get hacked you have to get a new one. 16,000 drivers recently got warnings to get a new log or stop driving because of a hack of a provider. If you use them, also keep a manual log. [/su_quote]

Get an IRP plate

You’ll need an International Registration Plan (IRP) before you start a trucking company. An IRP is a plate that allows you to get plates that work in all states. You’ll want to go to the appropriate licensing office in your state to get these. You can find each state in the FMCSA list of providers .

Some states also require additional permits to operate within them. Mikael told us:

[su_quote] Oregon requires a permit if you operate within the state but are from out of state. [/su_quote]

Allow a DOT Trucking company audit

When you start a trucking company, the DOT will conduct an audit during the first year to verify that:

You are keeping proper records.
You have a drug and alcohol testing program.
All insurance is up to date.
Periodic inspections are performed and documented.
No major infractions incur.

You can learn more at FMCSA . If you do not pass this audit, your business will not get permanent authority to operate.

Keep reading for tips on how a successful trucking company gets customers.

businessman smilling with background image of a truck

With all the regulatory compliance that starting a trucking involves, it’s easy to lose sight of the end goal of any business: attracting and retaining new customers.

Getting customers for your new trucking business isn’t that hard these days. There is a huge shortage of drivers, and you just have to get your name out there.

Mikael had a ton to say about finding customers. He told us:

[su_quote] My number one niche is reefer. Customers are everywhere. [/su_quote]

Create your brand

One of the best ways to attract new customers is by creating a memorable brand image through an effective branding campaign.

Branding is the process through which a company’s mission, values, and image enters the public consciousness.

Get a good logo

Successful branding begins with a good logo that represents the company effectively and in a simple, easily memorable manner.

Getting the logo right is an important step toward corporate success, and if you are not a natural artist or computer graphics expert, plenty of firms offer logo design for reasonable rates. It’s a worthy investment of resources toward a bright future for your new trucking business.

Advertise your brand on social media

Successful advertising happens in both traditional and social media. Mikael told us:

[su_quote] I advertise on Facebook, Instagram, and TikTok. [/su_quote]

He went on to explain that he does short videos to help people understand the industry better. He even hires new drivers through the videos. He had four interviews from a single TikTok video.

Determine your competitive advantage

Branding and advertising can all be for naught if your company’s competitive advantage is not clearly defined. A competitive advantage is a unique service, perk, or reward that differentiates your business from others.

The trucking business is a very competitive industry with some large players that have thousands of trucks in their fleet and nearly half a million competitors. Some ways to differentiate your trucking company might be:

Subscription-based models : Charge customers monthly for a guaranteed number of miles or pounds. Mikael has several customers that have a consistent pickup day and time. He’s able to reduce the administrative time and cost for them because they just routinely send their order.
Service-based models : Guarantee on-time pickup and delivery (better follow through).
Pricing: Offer premium service or discount service. For instance, you might give someone a discount if they have a delivery that you can just add onto your current load.
Be more open : Mikael told us that different industries pay better at different times of the year. Share how you calculate pricing so people can create their own estimate and request a pickup.

Don’t neglect traditional marketing

Mikael reminded us that traditional marketing strategies like business cards and networking are really beneficial in the trucking industry. He told us that the trucking industry is in demand by most companies.

[su_quote] It’s always nice to know someone with a truck when you need to move. [/su_quote]

Always be prepared; you never know where you’ll find customers.

Links to resources about business marketing

computers with screenshot of forbes and inc website

There are a couple of excellent articles that focus specifically on getting customers. Forbes offers ten ways to get customers to your new small business, and Inc. offers the same, with a focus on also increasing your sales.

Mikael runs multiple businesses so he had a lot to say about how to manage a trucking business (or any business for that matter). Some of the advice he gave us included:

Get a business bank account with a credit union.
Make sure you have at least a personal credit score of 680.
Be sure to have at least $10K down payment if you’re financing the business.
Always have money for incidentals. (His company had 2 flat tires in a week and 16 repairs in a month.)
Use Quickbooks and hire a bookkeeper.

He told us:

[su_quote] My brother does the bookkeeping. [/su_quote]

He went on to explain how they try to grow. He explained:

[su_quote] I try to hit $10K per month per truck. I calculate earnings by the week, then try to hit the median + 30%. Effectively, I’m trying to increase by 30% each week. [/su_quote]

Trucking companies have a lot of administrative work they have to do. If you’re a solo entrepreneur, you’ll be doing it yourself, or you can hire people to help you. A lot of truckers hire their wives to do the dispatch. This can be a good or bad thing. Make sure she understands what she’s doing.

The main administrative work is typically done by dispatchers. A dispatcher will normally make between $30,000 and $75,000 per year and have job responsibilities including:

Providing estimates to customers
Preparing dispatch documents
Planning and adjusting routes
Scheduling driver pickup and delivery times
Communicating with customers about delivery or pickup times, freight limitations, and special requests
Creating bills and invoices
Maintaining call records, delivery and pickup times, driver routes, and route changes
Updating drivers on transportation regulations and laws
Reviewing drivers’ logs and comparing them to quoted arrival times.
Logging shipping schedules
Monitoring truck repairs
Scheduling maintenance
Managing complaints

You can outsource your dispatch to a company like Cameron .

You’ll probably need some software to manage this so let’s look at some of the software Mikael suggests.

Mikael suggested the following software:

Motive : This software is a combination of risk management, security, and customer relationship tools. When used with the video cam, it is also good for an educational tool.
DAT board : Use this to find a load that you can use to improve your returns by running a fuller truck and getting loads for the return home.

Man holding an 18-wheeler toy figure truck

We’ll answer some of the most frequently asked questions on how to start a trucking company in this section so you are better prepared for your own trucking business.

How to start a trucking business with one truck

You can either start your own trucking company as an owner-operator or pay someone else to drive the truck. You’ll want to:

Learn more about how to start a truck business.
Write a business plan about how to start your own trucking company.
Secure the funds for starting a trucking business.
Go to a private truck driving school.
Go through the entire regulatory process. We explain it more if you go to Step 4 in the blog.
Find customers.
Manage your company.
Hire administrative help.
Pay your taxes.

How to start a trucking business owner-operator

An owner-operator will be required to perform all parts of a successful business. You’ll need to:

Get all business license requirements.
Comply with government regulations.
Maintain business insurance.
Establish contracts.
Manage cash flow and fuel costs.
Haul loads.
File IFTA’s quarterly tax returns.
Maintain new or used trucks.

We created an owner-operator startup checklist for those who want more information on how to start a owner-operator trucking business. Download it below.

How to start a box truck business

Starting a box truck business is a little bit easier than other trucking companies. You’ll want to:

Check if you need a CDL in your state and surrounding states. Get it if you need it.
Start your LLC or Corporation.
Get your state and local business licenses.
Get a business bank account.
Get your commercial driving and business insurance.
Transport loads.
Manage the finances.

Be sure to glance back at the steps included in this article if you have questions about these tasks.

Most box trucking companies are not required to have the following:

International Registration Plan plates
International Fuel Tax Agreement decals
DOT registration
Unified Carrier Registration

How to start a trucking brokerage business

A truck broker or freight broker is a company that has relationships with suppliers and transportation companies. They manage a load board and help both parties meet their unique business needs. They may be large businesses that also participate in hauling loads, or they may be strictly middlemen.

To start this type of company, you will need to follow the 7 steps outlined above, including:

Understand how to start a trucking business.
Write a business plan.
Secure funding.
Go through the legal proceeding requirements.
Get customers.
Manage your trucking finances.
Handle administration. This section will be particularly important to a broker.

Read the whole blog for more information on how to start trucking business brokerages.

How to start a trucking business without driving

There are a few ways to start a trucking business without driving. Some of the trucking businesses that don’t require you to drive include:

Freight factoring company : Provide loans on invoices for a percentage of the load.
Freight brokerage : Develop relationships with shippers and truckers and play the middleman. You still need all the requirements of a trucking company, though.
Process Agent: A process agent is a company that has a person and office in every state. They are necessary under the Unified Carrier Registration. You can find a full list on the FMCSA.
Trucking Software Provider : If you think you can find ways to help truckers simplify reporting, financial projections, taxation methods, or other essential parts of their job, you might have a great opportunity because the industry is in constant flux.
Hire drivers with CDLs: You can start a trucking business without a CDL, but you’ll have to pay truckers to haul the loads for you. Mikael operates in this manner but still has his CDL just in case something happens.

Who are good trucking influencers to follow on social media?

Checking out what other companies are doing can be really beneficial. Part Catalog has a great list of trucking influencers. We included two with the highest engagement and Mikael Sant’s links.

Alex the Trucking Guy: YouTube / Instagram
Big Rig Barbie: YouTube / Instagram
Mikael Sant: TikTok / Podcast

Starting a trucking company requires complying with a lot of regulations, a lot of administrative functions, and a lot of patience and determination to build a company that makes more than $75K per month. It’s achievable, though.

Just make sure it works with your life. While long-haul trucking is more profitable, you might want to start locally if you have a family you want to see every night.

Given the amount of regulation, starting a truck company might not be the first business you start unless you’re already driving and want to go independent. You can definitely build a successful career in trucking, but it’s a long haul.

For those who successfully scale the formidable barriers to entry, the financial rewards can be great. But the majority of trucking owners love the freedom of the open road and are typically mom-and-pop shops.

Do you have experience running a trucking business? What do you love about it? What would you change? With what other businesses do you get to explore the world as you work?

How to Sell a Business: The Ultimate Guide (2024)

Define the exit strategy
Prepare financial statements
Get an independent business valuation
Increase the business value of your small business
Market to potential buyers
Negotiate terms and sell your business
Transition period

Step 1: Define the Exit Strategy

Type of business
Business structure
Working with a broker vs. without a broker
Who will take control of the business after I sell my business?

Type of Business

Business structure.

Sole Proprietorship
Partnership
Corporation
Comparison of business structures (need to remake chart)

Broker Sales or Private Sales

Selling your small business with a broker.

Entrepreneurs cosnsulting a business broker

How Do I Sell My Business Without a Broker?

Who will take control after selling your business.

Employee Buyouts.
Plan to sell to a related person upon retirement.
A competitor approaches you about merging the businesses.

Step 2: Prepare Company Financial Statements

Tax returns for last 7 years (or the start of business)
Supplier agreements
Business licenses and insurance documents
Proof of intellectual property rights/ownership
Documentation of all debts and liabilities
Documentation of all assets
Anything else you think the buyer might want to know

Step 3: Get an Independent Business Valuation

Pens and a notebook on a desk with the word value

Valuations Formulas to Know Before You Sell Your Business

Asset Valuation

Price to Sales Ratio

Discounted Cash Flow

Asset Valuation Model

Price to earnings ratio, discounted cashflow method.

Sales and growth
Cost of capital (inflation assumption of 3% plus the interest rate on a loan)
Income taxes
Changes in inventory, accounts payable and accounts receivable
Investment income
Depreciation

Step 4: Increase Business Value Before Sale

Documenting plan going forward like you aren't selling
Improve financial positions and profit margin.
Pay attention to the market

Documenting Plan Going Forward Like You Aren't Selling

Improve financial positions and profit margins, pay attention to the market, step 5: market to potential buyers.

A note and pad on a desk with the word identity prospects

Business brokers
Online business marketplaces, like UpFlip’s marketplace
Sell to a top employee
Sell to a competitor
Newspaper / online ads
Ask your social network
Commercial realtors
Trade associations
You're franchisor if you are a franchise.
Add "Small business for sale near me" in the metadata of posts and images online to trigger results during searches.
Sell to someone you know.
Have a third party help you.
Use digital platforms to sell the business

Sell to Someone you Know

Have a third-party help you, use digital platforms.

Different social media platforms shown on a tablet

Step 6: Negotiate Terms and Sale of Business

Liabilities
Period of Time You'll Stay During transition

Period of Time to Stay on after Transition

Period of time you’ll stay on
Roles during transition
Pay during transition

Step 7: Transition Period

A clock and four cubes with the letters TIME

How to Become a $1M/Year Real Estate Agent

Enroll in Real Estate School, take your credit hours, and take a test.
Get your real estate license.
Find a broker.
Secure clients.
Close deals.

Real Estate Industry Crash Course

Revenue for Real Estate Agents

U.S. Bureau of labor statistics screenshot

Real Estate Agent Expenses

Wages : 16-22% which includes a 5-6% commission to cover brokerage administrative expenses.
Office Supplies : 3-15%, with industry average of 3.6%.
Marketing : Typically under 2%. This seems like an opportunity for the real estate agent who learns marketing and expands it to the typical 8% of other industries.
Rent + Utilities : 5-6% of revenue.
Depreciation : Normally 1.5%-16%. Business owners will normally claim depreciation of vehicles, buildings, and equipment. This is an on-paper cost.
Other : These include all the miscellaneous expenses like taxes, software, gas, and payments to subcontractors like photographers. Here’s the breakdown of other expenses.

How to Become a Successful Real Estate Agent

84 transactions
$580K average home
2% average commission

Join and Get Involved in Professional Groups

Young Professionals Network ( YPN ) : Helps real estate agents learn skills and best practices that help them be more successful.
National Association of Realtors (NAR) : This organization provides a variety of certifications, ethic training, resources, meetings, and joining is the only way to become a REALTOR®.
Chamber of Commerce : Join the U.S. Chamber of Commerce and participate in your local chapter.
Federal Reserve : Keep up to date on economic and interest rate changes .
Volunteering : Santino suggests getting out and helping your community. Organizations like Habitat for Humanity are great for meeting construction professionals that can be useful connections.
National Association of Real Estate Brokers ( NAREB ) : This organization focuses on helping improve minority professionals’ results and community homeownership rates.
Federal Housing Finance Agency : Stay updated on laws impacting real estate.

Industry Trends

High home prices tend to lower demand for housing
Rising interest rates tend to lower demand for housing
Tightening credit tends to make it harder to buy a home

Real Estate Crypto & Blockchain

Selling metaverse real estate

Nonfungible tokens CoinDesks website screenhot

NFTs allow the creator to receive a recurring commission. If you are the first real estate agent to sell a house, you get a commission every time it passes hands. Sweet!
It reduces the time to close a sale.

How to Become a Real Estate Agent in the Metaverse

Step 1. Enroll in Real Estate School

How long does real estate school take, step 2. how to get a real estate license.

A high school diploma or GED
Pass the real estate exam
Submit fingerprints
Pass background checks
Find a broker sponsor if required
Get errors & omissions insurance if required (Our preferred insurance provider is Simply Business .)
Turn in the application and pay the fee
Take continuing education classes

Real Estate Exam

Pearson Vue
National portion : Licensing exam focused on the general business tools and knowledge you will need for a successful career in any state. You’ll need to understand terms like sales agents, listing brokers, asking price, sales price, and other real estate terms that are consistent in any state.
State exam : Licensing exam focused on professional regulation in your specific state. These are critical to understand before sales agents perform their first transaction for clients.

How Long Does It Take To Get a Real Estate License?

Step 3. find a b roker.

Caps : What is the maximum I have to pay each year to a broker?
Splits : What percentage of each paycheck goes to the cap?
Additional Fees : Are there any fees that I need to know?
Growth : What opportunities are there to grow beyond just selling real estate?
Training : How do you help new agents adjust to all your systems?
Earnings : What are the highest and median pay of agents under you?

Find a mentor

Step 4. secure clients.

Step 5. Close Deals

Submit and review offers
Help clients secure financing
Communicate with escrow and inspectors
Close on the property

Systemize the Real Estate Business

Setup a CRM
Get a virtual or real assistant
Hire a transaction coordinator
Hire people for outbound calls

How to Become a Real Estate Agent with No Experience

Take the required pre-license courses.
Pass the real estate exam.
Pass a background check.
Get your Errors and Omissions insurance.
Get your license.

How to Become a Luxury Real Estate Agent

How to become a commercial real estate agent, how to become a millionaire real estate agent, how to become a real estate agent part time, how to become a real estate agent without a degree, how to become a real estate broker.

Offer price opinions
Supervise agents
Perform all roles an agent can
Manage property assets

Santino’s Favorite Books

Are you ready to start your real estate career.

Become a business owner in less than 90 days

Start your 10-day free trial of the UpFlip Academy and learn how to start your own business from scratch.

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What Is a Franchise?

Understanding franchises.

The Basics and Regulations
Pros and Cons

Franchise vs. Startup

The bottom line.

Types of Corporations

What Is a Franchise, and How Does It Work?

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Pete Rathburn is a copy editor and fact-checker with expertise in economics and personal finance and over twenty years of experience in the classroom.

A franchise is a type of license that grants a franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor's business name. In exchange for acquiring a franchise, the franchisee usually pays the franchisor an initial start-up fee and annual licensing fees .

Key Takeaways

A franchise is a business whereby the owner licenses its operations—along with its products, branding, and knowledge—in exchange for a franchise fee.
The franchisor is the business that grants licenses to franchisees.
The Franchise Rule requires franchisors to disclose key operating information to prospective franchisees.
Ongoing royalties paid to franchisors vary by industry and can range between 4.6% and 12.5%.

Investopedia / Mira Norian

When a business wants to increase its market share or geographical reach at a low cost, it may franchise its product and brand name. A franchise is a joint venture between a franchisor and a franchisee. The franchisor is the original business. It sells the right to use its name and idea. The franchisee buys this right to sell the franchisor's goods or services under an existing business model and trademark .

Franchises are a popular way for entrepreneurs to start a business, especially when entering a highly competitive industry such as fast food. One big advantage to purchasing a franchise is you have access to an established company's brand name . You won't need to spend resources getting your name and product out to customers.

The franchise business model has a storied history in the United States. The concept dates to the mid-19th century when two companies—the McCormick Harvesting Machine Company and the I.M. Singer Company—developed organizational, marketing, and distribution systems recognized as the forerunners to franchising. These novel business structures were developed in response to high-volume production and allowed McCormick and Singer to sell their reapers and sewing machines to an expanding domestic market.

Before buying into a franchise, investors should carefully read the Franchise Disclosure Document, which franchisors are required to provide. This document contains information about franchise fees, expenses, performance expectations, and other key operating details.

The earliest food and hospitality franchises were developed in the 1920s and 1930s. A&W Root Beer launched franchise operations in 1925. Howard Johnson Restaurants opened its first outlet in 1935, expanding rapidly and paving the way for the restaurant chains and franchises that define the American fast-food industry until this day.

There were 790,492 franchise establishments in 2022 that supported the U.S. economy, with an expected 805,436 for 2023. These franchises contributed over $500 billion to the economy. In the food sector, franchises included recognizable brands such as McDonald's, Taco Bell, Dairy Queen, Denny's, Jimmy John's, and Dunkin'. Other popular franchises include Hampton by Hilton and Days Inn, as well as 7-Eleven and Anytime Fitness.

Franchise Basics and Regulations

Franchise contracts are complex and vary for each franchisor. Typically, a franchise agreement includes three categories of payment to the franchisor. First, the franchisee must purchase the controlled rights, or trademark , from the franchisor in the form of an upfront fee. Second, the franchisor often receives payment for providing training, equipment, or business advisory services. Finally, the franchisor receives ongoing royalties or a percentage of the operation's sales.

A franchise contract is temporary, akin to a lease or rental of a business. It does not signify business ownership by the franchisee. Depending on the contract, franchise agreements typically last between five and 30 years, with serious penalties if a franchisee violates or prematurely terminates the contract.

In the U.S., franchises are regulated at the state level; however, the Federal Trade Commission (FTC) established one federal regulation in 1979. The Franchise Rule is a legal disclosure a franchisor must give to prospective buyers. The franchisor must fully disclose any risks, benefits, or limits to a franchise investment.

This information covers fees and expenses, litigation history, approved business vendors or suppliers, estimated financial performance expectations, and other key details. This disclosure requirement was previously known as the Uniform Franchise Offering Circular before it was renamed the Franchise Disclosure Document in 2007.

Advantages and Disadvantages of Franchises

There are many advantages to investing in a franchise, and also drawbacks. Widely recognized benefits include a ready-made business formula to follow. A franchise comes with market-tested products and services, and in many cases established brand recognition .

If you're a McDonald's franchisee, decisions about what products to sell, how to layout your store, or even how to design your employee uniforms have already been made. Some franchisors offer training and financial planning, or lists of approved suppliers. But while franchises come with a formula and track record, success is never guaranteed.

Disadvantages

Disadvantages include heavy start-up costs as well as ongoing royalty costs. To take the McDonald’s example further, the estimated total amount of money it costs to start a McDonald’s franchise ranges from $1.3 million to $2.3 million, on top of needing liquid capital of $500,000.

By definition, franchises have ongoing fees that must be paid to the franchisor in the form of a percentage of sales or revenue. This percentage can range between 4.6% and 12.5%, depending on the industry.

For uprising brands, there are those who publicize inaccurate information and boast about ratings, rankings, and awards that are not required to be proven. So, franchisees might pay high dollar amounts for no or low franchise value.

Franchisees also lack control over territory or creativity with their business. Financing from the franchisor or elsewhere may be difficult to come by. Other factors that impact all businesses, such as poor location or management, are also possibilities.

Ready-made business formula

Market-tested products and services

Established brand recognition

Large decisions already made

List of approved suppliers

Training and financial planning provided

Success not guaranteed

Large start-up costs

Ongoing fees

Lack of territory choice

Lack of creative control

If you don't want to run a business based on someone else's idea, you can start your own. But starting your own company is risky, though it offers rewards both monetary and personal. When you start your own business, you're on your own. Much is unknown. "Will my product sell?", "Will customers like what I have to offer?", "Will I make enough money to survive?"

The failure rate for new businesses is high. Two-thirds of businesses survive just two years, and 50% survive just five years. If your business is going to beat the odds, you alone can make that happen.

To turn your dream into reality, expect to work long and hard hours with no support or expert training. If you venture out solo with little or no experience, the deck is stacked against you. If this sounds like too big a burden, the franchise route may be a wiser choice.

People typically purchase a franchise because they see other franchisees' success stories. Franchises offer careful entrepreneurs a stable, tested model for running a successful business. On the other hand, for entrepreneurs with a big idea and a solid understanding of how to run a business, launching your own startup presents an opportunity for personal and financial freedom. Deciding which model is right for you is a choice only you can make.

What Are the Advantages of Franchises?

Some of the widely recognized advantages of franchises include a ready-made business formula to follow, market-tested products and services, and, in many cases, established brand recognition. For example, if you're a McDonald's franchisee, decisions about what products to sell, how to layout your store, or even how to design your employee uniforms have already been made. Some franchisors offer training and financial planning, or lists of approved suppliers; however, despite these benefits, success is never guaranteed.

What Are the Risks of Franchises?

Disadvantages include heavy start-up costs as well as ongoing royalty costs. By definition, franchises have ongoing fees that must be paid to the franchisor in the form of a percentage of sales or revenue. This percentage can range between 4.6% and 12.5%, depending on the industry.

There is also the risk of a franchisee being duped by inaccurate information and paying high dollar amounts for no or low franchise value. Franchisees also lack control over territory or creativity with their business. Financing from the franchisor or elsewhere may be difficult to come by and franchisees could be adversely affected by poor location or management.

How Does the Franchisor Make Money?

Typically, a franchise agreement includes three categories of payment to the franchisor. First, the franchisee must purchase the controlled rights, or trademark, from the franchisor in the form of an upfront fee. Second, the franchisor often receives payment for providing training, equipment, or business advisory services. Finally, the franchisor receives ongoing royalties or a percentage of the operation's sales.

A franchise can be a great way for an individual to enter the world of entrepreneurship , as the majority of the groundwork has already been laid and you are leveraging off an established, successful, and well-known business and brand name. There are also many businesses with franchises to choose from.

For a fee and start-up costs, you can be on your way to being your own boss and entering a possibly lucrative career. Though it must be noted that success is not guaranteed and franchises require a lot of work to be profitable.

Federal Trade Commission. " Franchise Rule Compliance Guide ," Pages 1, 24-119.

International Franchise Association. " Royalty Fee Requirement Definitions ."

Thomas S. Dicke. "Franchising in America: The Development of a Business Method, 1840-1980," Pages 12-13. UNC Press Books, 1992.

Thomas S. Dicke. " Franchising in America: The Development of a Business Method, 1840-1980 ," Page 119. UNC Press Books, 1992.

International Franchise Association. " 2023 Franchising Economic Outlook ," Page 6.

Franchise Help. " McDonald's Franchise ."

Small Business Administration. " Small Business Facts ."

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Thinking of Franchising Your Business? This Franchise Consultant Shares His Most Essential Advice After 20 Years in The Industry Franchising is a significant commitment and one that a business owner should investigate thoroughly, starting with some self-examination, some business analysis, and the guidance of seasoned, professional franchising advisors.

By Emiliano Jöcker • May 1, 2024

Key Takeaways

Applying the franchise model, forging the right path, getting the help you need.

Opinions expressed by Entrepreneur contributors are their own.

Who can take credit for being the first to implement the franchising model is debatable. According to this report by the International Franchise Association, it is widely believed the first franchisor in the U.S. was the Singer Sewing Machine Company in 1851. The same report also contends that others credit Martha Matilda Harper — who built a network of beauty salons with a retail component. — to be the first franchisor. Then, of course, there's the McDonald's story, with Ray Kroc's involvement, that many refer to as arguably one of the first forays into food service franchising.

Why am I mentioning all of this?

As I've witnessed in the twenty-or-so years that I've been involved in franchising (on the franchisor, franchisee, and consultant sides of the industry), it demonstrates that franchising was — and still is — a viable business expansion model with a long track record. Over the decades, franchising has come into its own, from a novel idea for business growth to a sophisticated, regulated way of doing business that benefits both the franchisor and its franchisees. Since that first handshake deal, savvy entrepreneurs have developed best practices and trainable systems to help people, from corporate escapees who buy a single franchised unit to highly capitalized, large multi-territory owners, to build sustainable businesses.

Franchising is often considered an enormous and growing industry in and of itself, and its principles are employed by countless other industries and business models, from restaurants to automobile services to beauty salons and retail stores, to all kinds of B2C and B2B services. Even dentists and dermatologists (and those in numerous other healthcare segments) are enjoying the benefits of franchising their business models.

Related: Franchising Is Not For Everyone. Explore These Lucrative Alternatives to Expand Your Business.

The word "franchise" is derived from the French word franc, which means free. But don't be fooled into thinking franchising is free or even inexpensive. It's a significant commitment and one that a business owner should investigate thoroughly, starting with some self-examination. For example, you will want to ask yourself:

Do I have adequate resources, both people and money, to expand through franchising? (As noted above, franchising is not a "no-cost" effort for the emerging franchisor. You will need to, at minimum, develop franchise legal documents and an operations manual; business planning and marketing tools are also key. So, you'll want to leverage your current business' capital and human resources, but do so without over-extending yourself.)
Can I handle risk when it involves both my finances and other people's capital?
Am I collaborative and interested in building long-term relationships with franchisees (vs. employees)?
Do I have strong leadership skills and a team that inspires trust?

Once you've analyzed yourself as a business owner and potential franchisor, it's time to do the same analysis with your business to determine if it is indeed franchisable:

Do you have a single unit open or several in operation, and is it/are they profitable?
Do you have a product, service, or system that, with proper training and guidance, can be duplicated in other markets?
Are all your systems dialed in so that they can be quickly learned by someone who may or may not have experience in your industry?
Can you show investors who will become your franchisees that they can build a solid business following your blueprint?
Will your business, if franchised, provide a solid ROI for both franchisor and franchisee?

You may not even have all the answers to these questions, and that's okay. This is the time to talk to franchise specialists who have helped businesses like yours enjoy the benefits of franchising and who can help determine if you're ready to take the next step.

A fact that sometimes gets lost in the equation is that once you make the move from business owner to franchisor, your day-to-day business responsibilities shift, requiring a different mindset. You're no longer grooming dogs; you're setting up others in business to groom dogs — or train their employees to change tires or make sandwiches. Your business is now focused on selling franchises and supporting franchisees.

It's also important to know that before committing to you, potential franchisees will want assurances that your concept has the legs to travel to other communities where your brand is not known and still attracts enough customers to make it viable.

Let's say you have a pizza concept. People rave about your pizza, and you've had several customers ask if you plan to franchise your concept. While it's always flattering to have people want to duplicate what you have in their neighborhood, there's more to it. Everyone who owns a pizza shop will tell you they have the best-tasting pizza in the world.

In order to start a successful franchise brand, you need, yes, a product people crave, but also something that will distinguish you from the competition. You need detailed recipes, proven systems, well-documented procedures, a well-formulated (and trademarkable!) brand, a solid marketing plan, and an established supply chain. Proprietary products and operational tools are helpful, too.

In the end, you must offer prospective franchisees advantages that are better or at least equal to what your competition is offering and that they couldn't easily develop themselves.

Of course, as a business owner, you don't have to do this franchise preparation work all on your own. Franchise advisors can help you create manuals, training materials, and marketing plans, while franchise lawyers and accountants can develop the necessary legal documents and financial audits. Note, however, that franchising is a specialized field, so you want people who understand franchising's unique structures, laws and practices. This is not the time to try to save money by hiring a personal contact who just started working as a solo operator or for a firm that has limited franchising experience.

All the professional consulting and guidance in the world, however, won't help you if you don't have the spark that will ignite your business into a hot concept a franchise salesperson can sell. Plus, you need to have patience and not jump on the first person who shows an interest. After you've built your franchise model and begun (legally) offering franchises, franchisee selection becomes one of the most important tasks to undertake. There's a reason why even some of the most established franchise systems have a high ratio of rejection to acceptance when it comes to choosing franchisees to join their brands.

One of the tenets of franchising is consistency , not just in a single store but throughout the system. When they order from a McDonald's, consumers want the same hamburger and fries in Portland, Oregon, as in Portland, Maine. They also have certain expectations, such as the restrooms will be clean, the service will be friendly. That's why hotel chains are so popular with seasoned travelers: road warriors don't want any surprises when it comes to where they spend the night away from home.

Final thoughts

Another consideration when evaluating the possibility of franchising a business is the popular interview question we've likely all been asked: Where do you see yourself in five years? Or, to ask it another way, what's your appetite for both risk and growth? How fast do you want to grow? Do you want to grow to be a regional, national or even international chain?

Determining your goals is key. And timing your franchising efforts is equally important. There is something to be said for taking your time and waiting until everything is perfected before franchising your business. But the problem with this approach is that by the time you're ready to launch, your competition may already have dozens — or hundreds — of units already opened. Being first to market has its advantages, but it's still a juggling act because you don't want to take your one shot and misfire. Although it's possible to make tweaks to your system as you grow, you don't want to confuse customers (and franchisees) by constantly changing core items people are coming specifically to you to get.

Deciding when the time is right to franchise your concept can be overwhelming unless you spend time doing your due diligence, along with some soul-searching. Whether you have a passion for your product or services and want others to benefit from it, too, or you're counting on franchising as a retirement vehicle, franchising will be a career- and life-altering choice for you and your organization. But, best of all, you'll be following in the footsteps of some giants in entrepreneurship.

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Los Angeles gets rights to first Big3 home market based team

WASHINGTON, DC - AUGUST 19: Coach Ice Cube of Team Webull attends the Monster Energy BIG3 Celebrity Game at Capital One Arena on August 19, 2023 in Washington, DC. (Photo by Tasos Katopodis/Getty Images for Idol Roc Entertainment)

The Big3, the 3-on-3 basketball league co-founded by rap and movie star Ice Cube in 2017, announced Friday for the first time it had sold the rights to a team based in its home market of Los Angeles to a group of investors led by DCB Sports for $10 million. The team will play its home games in Los Angeles.

Ownership Group Led by DCB Sports Purchases Rights to First Location-Based BIG3 Team Franchise in Los Angeles — Read more below! https://t.co/qTTNoq7jRE pic.twitter.com/PopwM9chrD — BIG3 (@thebig3) May 10, 2024

The team will begin play in 2025 when the league goes from its current model of traveling from city to city for games with multiple teams to having teams based in specific markets.

The league’s plan is for three more ownership groups to be announced before the 2024 Big3 season, which begins June 15 in Oakland. Toronto and the U.K. are expected to be among the locations for the 12-team league next season.

“We can plant our roots in these cities,” Ice Cube said. “It is great to come through with, like, a rolling All-Star event, but if you want to really unlock the fan-base potential, connecting to cities does that.”

The Big3 wants ownership with roots in the cities it plays in. DCB managing partner Gary LaDrido attended USC for undergraduate studies before earning an MBA from UCLA. He said in a statement the Big3 is “dynamic and nuanced, and the product on the court appeals to a global audience.”

This season’s play has stops in 10 cities over the summer , concluding with the championship, celebrity and All-Star games Aug. 18 in Boston.

The league believes having teams in specific cities will not only connect with fans, but also allow it to establish roots with its community outreach branch, including the Young 3 youth league.

Big 3 co-founder Jeff Kwatinetz said the plan always was to have teams attach to cities instead of being run centrally by the league. He said Friday’s announcement is a step toward creating a bigger footprint in communities around the world.

“We do things in the cities when we go there,” Kwatinetz said. “We do the Young 3 and try to get involved with a lot of youth organizations and charities. The truth is that you can only do so much, you know, dropping in a city for four days than you can if you have a team rooted in the city.”

The Big3 features players with experience in college, the NBA and international play. Former NBA All-Stars Paul Millsap and Jeff Teague have signed to play this season.

The Big3 made headlines in March when news broke of a $5 million offer to Caitlin Clark to join the league. Clark was the No. 1 pick in the WNBA Draft by Indiana last month. Last August, Boston Celtics All-Star Jaylen Brown became the first active NBA player to play in the Big3 when he played in the league’s All-Star game in London.

Games are broadcast on CBS, and half of non-CBS games domestically will be streamed on X. According to the league’s statement, it is averaging 14,000 in-arena fans each weekend and averaged another 515,000 viewers on CBS last year.

“The league’s momentum and influence continues to grow each year; among their fans and the impressive roster of premier 3-on-3 players set to compete this summer,” DCB partner Matt Sherman said. “In addition to building out the Los Angeles franchise, we hope to help drive innovation within the global basketball ecosystem and be a catalyst for growth and connectivity internationally.”

Required reading

The Big3, Ice Cube and a league’s contentious business relationship with the NBA
Caitlin Clark offered $5 million to play in Ice Cube’s Big3 basketball league
‘We got the hottest league in the summer’: The BIG3 Basketball League demands to be taken seriously

(Photo: Tasos Katopodis / Getty Images for Idol Roc Entertainment)

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Jason Jones is a staff writer for The Athletic, covering Culture. Previously, he spent 16 years at the Sacramento Bee, covering the Sacramento Kings and Oakland Raiders. He's a proud Southern California native and a graduate of the University of California at Berkeley Follow Jason on Twitter @ mr_jasonjones

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Japanese technology investor SoftBank Group is expected to slip back into the red when it reports earnings on Monday despite technology stocks including Arm Holdings , , its core asset, performing well over the quarter.

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How to Write a Franchise Business Plan + Template
How to write a business plan for your franchise. 1. Understand your franchise business model. Since the franchisor has already established the company's business model, your business plan should focus on how you can adapt it to be successful in your chosen location. Imagine you're planning to open a fast food restaurant, chain hotel, or ...
Writing A Franchise Business Plan: Ten Key Elements To Consider
A business plan is an essential document for any business. It sets out what the business's objectives and offerings are, how the business will operate from day to day, covers sales and marketing ...
Creating a Franchise Business Plan
A franchise business plan is a document that outlines the overall mission, goals, and practical roadmap for a franchise. Regardless of where you are in your franchise journey, this blueprint aims to provide a detailed overview of the business model, startup costs, marketing strategy, and more.
How to Write a Business Plan for Your Franchise
A business plan will help you succeed. Writing a franchise business plan is a critical step in becoming a successful franchisee. It requires comprehensive research, a well-defined business concept ...
How To Start A Franchise In 8 Steps (2024 Guide)
2. Evaluate Opportunities. Before you start a franchise business, you should make sure that one doesn't already exist in the area. Although there are some businesses that can exist throughout a ...
Franchise Business Plan Template & Sample Plan
A business plan is a plan to start and/or grow your franchise. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections. You can easily complete your business plan using our Franchise Business Plan Template here.
Franchise Business Plan: Use The 7 Key Elements
Business plans' executive summary is the readers' first impression of your franchises. It is a written version of your business pitch. It should clearly define your franchises and everything it has to offer in a way that distinguishes your concept.. The executive summary should read as a separate document to introduce your business plan template.
How to Write a Franchise Business Plan
A franchise business plan is a living document that will require input from management and team members and which will be adjusted over time to meet the goals and aspirations of the business owner. However, in short, a franchise business plan is a "roadmap" which methodically sets out how business objectives will be achieved. ...
Franchise Business Plan
Franchise Business Plan Template: Free Resource. Typically you'll see around nine sections in your business plan. These sections are: Executive Summary. This is a description of the business model. For a franchisee, this is where you can incorporate information about the proven business process you're buying into.
7 Key Elements of a Good Franchise Business Plan
A franchise business plan is a critical piece in accessing capital. A well-crafted business plan helps the franchise to clearly define the objectives, strategies, and techniques for a successful business operation. Also, this document allows entrepreneurs to identify potential risks and challenges associated with the franchise operation.
Franchise Business Plan Template [Updated 2025]
Franchise Business Plan Template. If you want to start a franchise business or expand your current one, you need a business plan. Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their franchise businesses.
Creating a Business Plan for Your Franchise
Sample franchise business plan: Please note that the example business plan linked below is a sample of one way to format a business plan. There are several different acceptable formats, and the contents of business plan sections will vary significantly due to factors including the franchise system, the type and amount of loan sought, the ...
What Are the Key Elements of a Franchise Business Plan?
A franchise business plan works as a map or blueprint outlining various expectations, responsibilities, and milestones toward a successful franchise launch. As is true with any meaningful endeavor, one of the key success factors of franchising is planning and preparation. A well-developed franchise business plan provides a planning structure ...
Five Reasons Why A Franchise Business Plan Is Still Essential
Here are five reasons why having a franchise business plan is vital to succeeding as a franchisee and entrepreneur. 1. Banks and investors will need to see a plan to give you funding. The costs of ...
How to create a franchise business plan
Preparing a franchise business plan is a lot easier than preparing a plan for an independent startup business. This is because you have easy access to much of the necessary information. During the sales process, the franchisor typically provides a great deal of verbiage you can use for the narrative sections of the plan.
Franchise Business Plan Template (2024)
Writing a franchise business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan: 1. Executive Summary. An executive summary is the first section of the business plan intended to provide an overview of the whole business plan. Generally, it is written after the entire ...
How to Build a Comprehensive Franchise Business Plan
Your franchise business plan is nothing more than a concept until you flesh out the forecasted numbers. This is the psychic of your plan, and it doesn't always bring good news. It might convince you not to go into business at all. The deeper you dive, the more accuracy you'll gain. Your forecast will include profit and loss, balance, and ...
How to Franchise a Business: The Definitive Guide
Write a business plan focused on the franchise relationship. It should include all the normal parts of a business plan but focus on a solid expansion strategy, brand recognition, marketing tools, business systems, and supporting franchisees. Learn more about business plans. Hire an experienced franchise consultant and franchise attorney.
What Is a Franchise, and How Does It Work?
Franchise: A franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business's (the franchiser) proprietary knowledge, processes, and trademarks in ...
The Basic of Creating a Business Plan
A comprehensive business plan is made up of several elements. Here's a list of items you should include. Executive summary. The executive summary should describe the franchise you intend to purchase, include the background and track record of the franchisor and other existing franchises, and identify your core market.
Franchise Business Model
The franchise business model is totally based on the relationship between two sides: the franchisor and the franchisee. The franchisor is the person or company that owns the rights to a brand trademark. The franchisee is the one that pays a fee in order to use the franchisor's trade name and operating systems. This relationship is built on ...
Thinking of Franchising Your Business? Here's What You Need to Know
Franchising is a significant commitment and one that a business owner should investigate thoroughly, starting with some self-examination, some business analysis, and the guidance of seasoned ...
Los Angeles gets rights to first Big3 home market based team
The league's plan is for three more ownership groups to be announced before the 2024 Big3 season, which begins June 15 in Oakland. Toronto and the U.K. are expected to be among the locations for ...
New Franchisees: Rely On Franchise Support To Adopt An ...
Creating a business plan, setting clear goals and adopting a positive attitude can put you on the fast track to success. • Choose the right franchise: A franchisor should be invested in your ...
Keep it in the family: succession planning for franchise owners
A framework that might help you structure these conversations is to consider the why, what, how, who and when of the plan. Why do you want to keep the franchise in the family? Your reasons for becoming a franchise business owner may have been to build long-term value and generational wealth - but often, the "why" extends beyond the family.
Lava Grill and Wings plans restaurant on Mayfair Road
The Wauwatosa Plan Commission is scheduled to hear a proposal on Monday for a new hibachi grill and chicken wing restaurant seeking space on Mayfair Road.
Shell to exit South Africa's downstream businesses
Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.

How to Write a Franchise Business Plan + Template

Create a professional business plan

How to write a business plan for your franchise

2. Conduct a market and location analysis

Demographic study

Competitor analysis

Geographic analysis

Consumer behavior patterns

Franchise-specific research

3. Highlight your unique value proposition within the franchise

4. Do your own financial projections and scenarios

5. Create an operational plan

Staffing needs

Inventory management

Quality control

6. Review and adjust your business plan

See why 1.2 million entrepreneurs have written their business plans with LivePlan

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Franchise Business Plan Template

Franchise Business Plan

How To Write a Franchise Business Plan & Sample

Franchise Business Plan FAQs

What Are the Main Types of a Franchise?

What Are the Main Sources of Revenues and Expenses for a Franchise?

How Do You Get Funding for Your Franchise?

Where Can I Get a Franchise Business Plan PDF?

The 7 Key Elements Of An Effective Franchise Business Plan

What are the 7 Elements of a Successful Franchise Business Plan

Ready to Be Your Own Boss?

2. Franchise Business Plan: Business Description

3 . Franchise Business Plan: Competitive Analysis

4 . Marketing Plan and Sales Plan

1. Define your target audience

2. Set marketing goals

3. Develop a marketing strategy

4. Create a sales strategy

5. Identify key performance indicators (KPIs)

6. Set a budget

5. Franchise Business Plan: Operations and Management

6 . Financial Plan

7. Franchise Business Plan: Pro Forma

Keep your Franchise Business Plan Updated!

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How to Write a Franchise Business Plan

What is a franchise business plan?

Step 1: Present your business and your business idea

Step 2: Highlight the key features of the industry

Step 3: Specify your target market and competitors

Step 4: Outline your marketing and sales strategy

Step 5: Note your organisational structure and staffing needs

Step 6: Clarify the intricacies of your business operations

Step 7: Prepare your financial forecasts

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