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Strategic Franchise Business Plan Development

All too often, inadequate planning and development of a franchise business structure before offering franchises is reason why newcomers to franchising will fail. In fact, many franchisors will make the mistake of simply copying the franchise structure of their competitors when entering into the complex world of franchising.  The rationale is that “if it worked for them, it should work for me.” Another mistake to avoid is going to into Franchising without understanding your goals and growth expectations. The rationale of this strategy is “let’s just see how it goes and address problems as they come up”. This simplistic approach can lead to problems.

Assuming that your offering should be similar to the offerings of competitors often, it is a recipe for disaster.  A new franchisor must distinguish itself from their competitors in order to attract a franchise buyer who has a choice between them and their more established rival.  This difference can come in the form of the consumer offer, franchise marketing, franchisee support and training, or franchise structure.

Assuming that even if a similar strategy is implemented, that the resources of both organizations are similar and competing with an established franchisor by going head-to-head in an area of their strengths can be a huge mistake.  Every organization comes to franchising from a different starting point – with different strengths and weaknesses.

Assuming that your competitors did it right in the first place can lead to unexpected problems.  What if they simply made decisions at random?  Often, it may take years for a franchisor to realize that an early decision is resulting in diminished profitability

A number of different business decisions that a new franchisor will make early in the process could impact long-term profitability.  Just a few include:

It is in your best interest to consider these factors and include the right decisions in your Franchise Agreement(s) to get started on the right track to your business goals via Franchising.

In order to best position new franchisors for success, Eagle Franchising and Business Services takes a look at three key aspects of the franchise business plan you will need to move forward.

  1. Initial discovery: we look closely at your business, your financials and organizational structure to better understand how you should position the concept.
  2. Organizational gap analysis: we gain an understanding of your internal capabilities, your needs to fill certain “gaps” when delivering services to your franchisees, and the resources you can call on to do so, in order to plan your organizational development.
  3. Initial strategy development: we use your goals and your unique strengths and weaknesses to develop a preliminary franchise structure, subject to further financial analysis.

By following the steps outlined above, the franchise plan that we ultimately recommend for our clients is based not only on best-practices in franchising and within the client’s industry, but also on a close examination of our client’s culture, goals, business economics, and the resources available to implement a franchise program.

To learn more about how this business planning process can help provide you with your best chance of success in franchising, Contact Us. Email us at info@eaglefranchising.ca

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