We regard franchisee business planning as a critical franchise system management process and it is a process with references in many Franchise Agreements. Yet, not many franchisors encourage or engage in comprehensive franchisee business planning with all of their franchisees.
In other best practices we talk about a leadership focus on franchisee profit. Franchisee business planning is hugely central to this franchisee profit focus. That is because you cannot have a meaningful focus on franchisee profit, if the franchisee doesn’t have a plan for where they want it to be in one, two or three years’ time. Furthermore, if the franchisee doesn’t have a formal basis for establishing clear goals and objectives, then there can be no anchor point for a productive franchisor field manager engagement with franchisees.
Franchisee business planning requires real structure and education at the franchisee level and field management level. It also requires real support and encouragement from the franchisor’s ownership and leadership.
A sound franchisee business plan will cover multiple areas; not least, the business background, vision, mission and values, SWOT and competitive analysis, a focus on people, equipment and other resources (including CAPEX), marketing plans, and, a financial budget – to mention a few.
There is a lot more to franchisee business planning and we create specific tools and run specific training to help develop and encourage this important franchise system management process.
As a final comment, we would note that a simple one-page franchisee business plan is much better than no business plan, but a bespoke and comprehensive franchisee business plan is best.
- Does your franchise system require all franchisee to complete and operate to an annual business plan?
- Do all of your franchisees complete a business plan? If not, why not?
About the Franchising Best Practice 500 Series
This is part of a series of franchising best practices. Franchize Consultants is sharing and publishing these best practices weekly for the betterment of franchising. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses.
We have assembled the first 40 best practices into The Best Practice Handbook, which is available for purchase.