Crafting a Successful Franchise Proposal

Do you know where the practice of franchising originated? Believe it or not, the concept of franchising has its roots in England. The Crown would grant land rights to nobles and the church, giving them the ability to manage and develop the property as they saw fit. In exchange, these individuals were responsible for protecting the land and collecting tolls and taxes, paying a portion of this revenue to the Crown. This system remained in place until 1562.

In the United States, a version of franchising started with none other than Benjamin Franklin and his printing business. We say “a version,” because it was different from what we now refer to as franchising. However, some familiar elements were present:

• The “franchisee,” Thomas Whitmarsh, managed the printing business himself.
• He had to purchase equipment and paper from Franklin.
• He was responsible for all equipment maintenance.
• He agreed to not engage in other printing businesses for the six-year agreement.
• Franklin, as the “franchisor,” was free to enter into business agreements with others.
• In addition, Franklin could appoint the person to take over if Whitmarsh left or passed away.

Interestingly, Franklin’s third “franchisee” was Elizabeth Timothé, the first female publisher in North America. After establishing this first print shop in South Carolina, Franklin set up similar business arrangements in New York, Rhode Island, Pennsylvania, and Massachusetts. Eventually, this franchise system grew to have locations in North Carolina and Georgia, as well as overseas in Antigua, Dominica, Jamaica, Canada, and Great Britain.

Out of these roots came the franchise business model of today. If you’re hoping to become a franchisee, you can easily research franchise concepts they are interested in on websites like Franchise.com. Next comes time to write a franchise business plan, secure funding, sign a franchise agreement, and find yourself on a pathway to a new career. After all, as Franklin himself once said, “It is the working man who is the happy man. It is the idle man who is the miserable man.”

In this guide, you’ll learn about how you can buy a franchise, as we take a closer look at the paperwork you’ll need to be familiar with during the process, specifically the franchise proposal. Let’s get started!

Do You Need a Business Plan To Start a Franchise?

Technically, you may not need a business plan to start a franchise. Benjamin Franklin certainly didn’t have one! However, things have changed since 1973—chances are slim that you will be successful without one. Here are a few reasons you should strongly consider writing a franchise business plan:

1. You will be organized! There are a lot of moving parts to starting any business. A business plan gives you a clear picture of what the company is, where you’d like it to grow to, and how to get there.
2. You will need it to get funding. The vast majority of banks require a business plan in order to give out a business loan. This document proves how serious you are as an entrepreneur, and helps the bank feel like their loan is a good idea—since you’re showing them how you’re going to make money to pay back the loan.
3. You will gain perspective and knowledge. In order to create a business plan, you will have to do a lot of research. This will prepare you to become a business owner, giving you data that you can use to make informed decisions. After all, “diligence is the mother of good luck” as Franklin said, and diligent preparation will help you succeed.

What Is Included in a Franchise Business Plan?

A franchise business plan usually includes the following sections:

1. An executive summary that gives a high-level description of the business.
2. A company overview with details about the franchise concept you’ve chosen.
3. The industry analysis where you explain the overall industry and show how your franchise fits in.
4. A customer analysis with information about your target market.
5. A competitive analysis that includes your closest competitors, laying out their strengths and weaknesses.
6. A marketing plan with specific techniques and tools you will use.
7. An operations plan that gets into the nitty gritty of how your franchise will operate.
8. The management team, and how you will grow and develop your employees.
9. A financial plan with specific analysis like sales projections, cash flow and operating statements, and funding information.

This is just a rough outline, and your business plan will probably vary. Some franchises will have specific templates that they will provide you. Some funders may prefer a shorter version while others may want all the details you can include. Check with your franchisor and your lender to find out what information they require.

What Is a Franchise Proposal?

A franchise proposal can be a part of the franchise business plan or a stand-alone piece. This document is what you write to convince a franchisor to let you become a franchisee. Before we get to that though, the step before writing a franchise proposal is a letter of intent. This is also referred to as a franchise inquiry.

Often, a franchise inquiry will be a simple email. In this, you’ll want to include:

• Who you are and your business background
• How you found out about this franchise concept
• Your interest in joining
• Questions that you have for the franchisor
• A thank you for their time

If you’d rather cut to the chase, you can also use websites like Franchise.com to research and learn about franchise opportunities and easily sign up for additional information.

Alright, back to the proposal! This franchise document will usually include:

• Your overview of how you would approach owning and operating a franchise.
• Your experience and why you would be a good fit as a franchise owner.
• Your team, with all the details of their experience and how they will help you be competitive.
• Your financial picture and how your franchise will be sustainable and profitable.
• Your territory, detailing where you will do business and why that location is ideal.
• Your vision for the future, supported with statistics and data about industry trends.

What’s the Difference Between a Franchise Proposal and a Franchise Business Plan?

A franchise proposal varies from a business plan in a few key ways:

1. The audience—a franchise proposal is typically sent to a franchisor. The purpose is to convince the franchisor that you will be an excellent franchisee. Typically a franchise business plan is used for your own reference and for lenders or investors.
2. The scope—typically, franchise proposals are shorter than business plans and more focused on you as a franchisee, not you as a business owner.

Ready for some wise words from Franklin? As he once said, “in this world, nothing can be said to be certain, except death and taxes.” So here’s where the difference between a proposal and business plan gets uncertain—sometimes a franchise proposal can be used as a franchise business plan. It all depends on your unique situation.

How Do You Write a Business Plan for a Franchise? And How Do You Write a Franchise Proposal?

Writing any business document can be intimidating. After all, you want to “either write something worth reading or do something worth writing” (You guessed it! Franklin said that too!). Lucky for you, we’ve got a few practical tips that you can use.

• Research, research, research! The best way to tackle a blank page is to do your research. Not only will you be exposed to other people’s writing, but you’ll also be empowered with what to say.
• Don’t let perfect be the enemy of good. No, Franklin actually didn’t say that (it’s often credited to Voltaire, but it’s not clear who actually came up with this saying) but it is a good thing to keep in mind. Something is better than nothing, so just get your ideas down on paper and don’t worry about the quality on the first pass. You can always come back and edit later.
• Clarity is key! The whole point of a business plan or franchise proposal is to convey information. The best way to convince someone is to use simple, clear language.
• Show it to other people. After you’ve made an attempt, ask a trusted friend or colleague to proofread it for you. They may have suggestions for improvements or be able to catch simple mistakes.

Pro-tip: really freaked out about writing? Try a different format. Consider making a slide deck instead of writing a plan or proposal as a document. This can help you feel less intimidated by the blank page!

So, now that you’ve read our tips and written your franchise proposal, you’re well on your way to completing and signing a franchise agreement and becoming your own boss!

Take the Next Step With Franchise.com

Ready to find your franchise? You’re in the right place. Explore our new franchises for sale and find the concept that’s right for you. We have franchise opportunities spanning a huge range of industries, styles, and investment costs. You’ll be sure to find what you’re looking for in our directory—even big opportunities with well-known brands.

Finally, we’ll leave you with these wise words of Franklin: “without continual growth and progress, such words as improvement, achievement, and success have no meaning.” Congratulations on your dedication to growth and progress as you explore becoming a franchise owner with Franchise.com!