How to Write a Franchise Proposal

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Two businessmen are shaking hands.
Two businessmen are shaking hands. (Image: Wavebreakmedia Ltd/Wavebreak Media/Getty Images)

Franchise proposals provide franchise owners with the information they need to evaluate you as a potential franchise operator. The proposal must demonstrate that you have the market knowledge, management experience, financial backing and ambition to run a successful franchise. The proposal may also be necessary if you apply for funding to open the franchise.

Review Franchise Requirements

Franchise owners publish information that sets out the scope, benefits and requirements of their franchise. The franchise prospectus typically explains what the owner will provide in terms of training, support and materials, and sets out what operators must provide and the standards they must meet. Before you begin writing, study the operator’s prospectus to ensure your proposal meets all its requirements. Make a checklist of essential information to include and write bullet points that show how you meet the requirements.

Develop a Structure

Use the checklist and bullet points to develop a structure for your proposal. Include essential elements such as executive overview, market experience, management skills, management team profile, market analysis and financial projections. Add any supplementary sections to cover any information specific to a particular franchise.

Provide an Overview

An executive overview gives the franchise owner an indication of your approach to starting and running the franchise. It outlines the relevant experience you bring to the operation, the market potential and competition in your area, the level of risk in the business and your financial projections for the startup and growth phases.

Describe Your Experience

The franchise operator needs to know you have the skills and knowledge to run a successful business. You may have held a senior management or marketing position in the same business sector as the franchise. You may have owned or managed a small business in the sector, or you may have run another successful franchise in a different sector. Describe your experience in a brief resume and highlight achievements that are relevant to your franchise proposal.

Introduce Your Team

If you plan to run the franchise with a management team, include resumes of the key members and explain why the team will provide a balanced approach to the venture. For example, if you are bidding for a fast food franchise, having a manager with human resources experience demonstrates that you can manage employees. If you plan to open an automotive repair or service franchise, a team member with service management experience will be important.

Describe Market Potential

Demonstrating that your area has strong market potential can help you secure a franchise ahead of other would-be operators in other locations. To show existing demand in your area, list direct and indirect competitors and provide a demographic profile that aligns with the operator’s target market. Explain how you will use the owner’s branding and marketing programs to promote your local operation.

Make Financial Forecasts

Franchise owners ask for details of your financial position, including your personal net worth and your liquid assets. A forecast of initial investment, operating expenditure and potential revenue will help demonstrate that you can meet the operator’s financial targets and run a profitable business. It will also highlight gaps you need to fill with funding. For example, you may incur high levels of expenditure on premises, equipment and marketing to meet the owner’s requirements during the startup phase.

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