There are certain key elements that should be included in every franchise business plan in order to cover all bases and create a helpful and comprehensive document. These elements, regardless of your sector of investment, are:
The Executive Summary of your Restaurant Business
An executive summary is an introduction to your franchise business plan and talks about what your plan is all about. It can include your mission statement, a brief look at the expenses, and the expected returns. Also, it provides an overview of the business plan. So, while you may present it first in your restaurant business plan, you’ll always write this section last.
Restaurant Business Description
This is where you introduce the business, the potential name of the restaurant, the desired location, and other relevant information. It should also highlight legal details on the standing of the restaurant, short and long-term goals, and a market study. You can follow this up with a detailed market analysis graph for a detailed understanding. The graph can include industry analysis, competition analysis, and marketing analysis.
Restaurant Management Summary
While there is overall management of your restaurant business, you may have some key roleplayers in place to manage other aspects of the company. For example, you may have someone in charge of sales, client acquisition, foods and beverages, and so on. It’s essential that you also indicate the roles and responsibilities of each so there are clear boundaries between tasks and goals. If you have a board of members or outsourcing professional work, you’ll want to include them too.
Operational Details of Your Restaurant
The business plan should also include the number of staff working at the restaurant. From the owners to the top and mid-management, along with everyone else, the roles should be defined for all. If you have talented employees or management, this is part of the plan where you explain their skills and what they bring to the table. Along with staff, you should indicate what equipment and machinery will be necessary, along with maintenance plans.
Restaurant Products/Services Description
A menu is essentially what makes or breaks a restaurant. Without a menu, your restaurant will have no direction or character. A menu comprises two main elements - what features on it and the design. This is also where your finances come into play because you’ll need the pricing of the items on the menu and an estimated cost price for each line item. Besides the food offering, you should detail what other products or services you plan to offer.
Restaurant Premises Plans
Real estate plays a huge role in determining the success or failure of any restaurant. If you plan to open one near a school or college, you must understand the market you’ll cater to. In such a scenario, you can focus on a budget-friendly restaurant that serves fast food. You may want to serve something classy and exquisite in an upscale neighbourhood.
You should also consider the size of the space because this will determine your earning potential. It’s also important to look at the competitors in the location to have a fair idea of what you’re up against.
The ambience of a restaurant plays a huge role in determining how long a person will spend there, the mood they’ll be in, how much money they may spend, and if they will come back as a customer. It’s crucial to design the space based on the kind of restaurant you plan on opening. If you plan on running a fast food restaurant, you should aim to fit in maximum seats and ample kitchen space where food can be rolled out quickly.
If you’re planning a more upscale fine dining restaurant, you’ll want it to be classy and luxurious. You may also want to consider private seating so people spend more time at your restaurant. This part of the plan should also include the kind of equipment used in the kitchen and boast about modern technology, where applicable.
Restaurant Sales and Marketing Plans
This is a section where you get into all the minute details about your restaurant after a detailed analysis of various factors. You must also discuss the economic condition and what measures you’ll take to focus on the success of your restaurant, even if the economy isn’t great.
With the number of restaurants popping up every day, a strong marketing plan must be implemented. If you’re looking for investors, they will want to know how you will let customers know about your restaurant and what you will do to increase your footfall. Including all these details will help you build a strong business plan in the UK that will eventually lead to a successful venture.
Financial Projections and Needs for Your Restaurant
All the points mentioned above need a certain investment, and when you’re looking for an investor, you need to be clear about the figures. The analysis should also include the cost of running the space for at least six months so the restaurant gets ample time to gain popularity and become successful.
Keep in mind that you should also plan for hiring staff and estimate capital costs for acquiring machinery and operating costs for maintaining them. With your market study in place, you should have some idea of the potential income that will offset the planned expenses.
Five tips for building a business plan for a successful restaurant
1. A sample menu
The menu is one of the most central parts of the restaurant experience, and will become integral to your advertising, either attracting or losing customers. In your business plan, a sample menu is a sensible inclusion when dishes/products aren’t expressly specified by your franchisor. This sample menu should include prices, ingredients and dish names and descriptions.
The inclusion of price is vital, as it will give your franchisor and/or the person you’ve gone to for funding support (aka the most important people you’ll show your business plan) a good understanding of the price point you’re targeting. As you might guess, a targeted price point impacts financial projections.
2. Details about the restaurant design/style/fit-out
Again, this is subject to your level of control over design and fit-out, but if your franchise agreement allows you to include details about your desired restaurant design and style. This lets you demonstrate your creative abilities and overarching vision for the restaurant to franchisors and investors. Beyond aesthetics, you should also include vital fit-out information like:
- Seating capacity
- Heating and ventilation systems
- Software systems
- Kitchen equipment
Incorporate some visuals. Create a mood board that shows images related to the design and feeling of your restaurant. Planning on cooking in a wood-burning oven? Include that. Photos of materials and snippets of other restaurants that you love that are similar to the brand you’re building are also helpful.
3. Service details
Conveying your hospitality approach in your business plan is important, and there are a million different questions to ask yourself as you narrow down service details and determine your service style. Again, how much control you have in this area will vary with your franchisor’s level of involvement, but even if it’s a conversation had in partnership with your franchisor, you’ll need to be asking questions such as:
- Do you want your business to have counter service?
- Do you want your staff to place customers' plates in front of them in unison?
- Do you want a wine programme? A sommelier?
Though breaking down smaller details like this might seem unnecessary, providing a consistent and quality hospitality experience is one of the best ways to ensure, as a restaurant owner, that you’ll pick up repeat business and pull in good reviews. And if you can do those two things, you can profit, thrive and grow.
Whether I'm shopping at a store or enjoying a meal at a restaurant, when I actually do receive incredible hospitality, I am blown away! I'll visit that business over and over again, and I'll tell my friends and family about how amazing it is.
—Jordan Edwards, Forbes
4. A breakdown of the management team
A good management team is essential to the efficient running of a restaurant business, and prioritising employee recruitment even in the early stages and the business plan will set you up for success. Include details about the team you’ve established - who have you hired, and why? As you find these people, look for the following skills:
- Customer service and communication
- Organisation and time management
5. In-depth market analysis
Any business plan is incomplete without market analysis, but this is particularly true for businesses in the restaurant industry because competition is fierce and there’s always plenty of people operating in the same kind of niche as you. Consider your target market, research your direct competitors, and find any way that you can position yourself uniquely, whether that’s through your offerings or your marketing.
Market analysis is also very important if you’re planning to invest as a multi-unit franchisee, as it will tell you in which order you should conduct your business to get the best possible return on your investment.
A restaurant market analysis can help you to identify the order in which you should open units, allowing you to maximize cash flows to fuel further investment.
Enjoy a rewarding career running a successful franchise in the food service sector
You should now have a good understanding of what you’ll need to include in your business plan in order to set yourself up for restaurant franchise success. Next up? Diving further into all things restaurant with an article about marketing your restaurant franchise.
Shaun M Jooste, Point Franchise ©