Things to look for in a franchisors business plan
Often, while evaluating a franchisor, the aspect that should be looked at most minutely, is his business plan. It is this business plan that will ultimately determine the fate of both, the franchisor as well as the franchisee. Like in any other business, one needs to have a vision in mind when starting a new venture. This plan is basically the franchisors goals and objectives, put down on paper and how he plans to attain them. A sound business plan will give the franchisee a great sense of security. So here we list down a few things that are necessary in the franchisors business plan
• Mission and Vision All successful businesses started with a purpose, short term as well as long term. This purpose should manifest itself in the mission and vision of the business. Vision is a long term objective, which is never stated in terms of market share or profits, it is an idea that rises above the daily running of the business and deals with the owner’s objective. Mission can be in terms of market share and it can also be the desire to be known for quality, customer satisfaction, community service etc. The vision will always give direction to the business and hence it is very important to develop this at the outset.
• Marketing plan The marketing plan basically deals with how to attain and fulfill the stated goals and objectives. While preparing a marketing plan, one basically needs to deal with 4 P’s of marketing, which are
Product/Service Once the product or service has been developed, it is very important to familiarize the target market with it. Also one should try and provide many value-additions along with the product because value-additions help differentiate your product from that of your competitor. These value-additions will help in creating a niche for your brand.
Price The second P of marketing is the price of the product/service. The price should be determined keeping in mind various factors such as target market, profits, production and marketing cost etc. the price shall be determined keeping in mind future changes anticipated in the economic environment because frequent changes in price reflect poorly on the organization. Price is also closely related to status symbol and hence the price will also determine the image of your product/service in the minds of the consumer.
Place This P largely deals with networking and distribution. It tries to answer various questions like, where the product will be sold? How many retailers should stock it in a particular area? How will the distribution chain function? Good distribution and availability help in creating a very favourbale image in the minds of the consumer.
Promotion This basically deals with how the product/service will be positioned and marketed. For a new franchisee this is a very important consideration because marketing and promotions help in brining first time customers.
• Managerial This part shall state how he plans to deal with the management of the business. Will he hire a professional team of experts to guide his business or will he be his own guide? The document shall also state a managerial model, if any.
• Finance This part will show how much the franchisor plans to invest in the business and how does he plan to raise the capital. This plan shall also detail the manner in which he plans to spend his money in order to take the business forward.
• Legal This part shall deal with all the legal aspects of being a franchisor. Also what are the provisions incase things go out of hand, legally.