Running your own business with franchisor support is an exciting, low-risk venture, and especially in the restaurant industry, it could yield many different rewards. If you’d like to start a restaurant franchise, you’ll need a solid business plan in order to find true success. Here’s how to create that plan.
After a year of unpredictability and closure, the restaurant industry is booming once again, making up for lost time during 2020 and the first half of 2021. Pandemic withstanding, the sector has been growing steadily over the years, and in 2019, an estimated 5.4 million people visited restaurants two to three times a month [Statista].
Evidently, demand is there, and that makes investing with a restaurant business both lucrative and sensible. Increase your chances of success with a watertight business plan that you can deliver to your franchisor (to make sure you’re on the same page) and any potential investors (to secure franchise funding).
How to build a business plan for a restaurant franchise
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:
- An executive summary
- A business description
- Product/service descriptions
- A management summary
- Operational details
- Sales and marketing plans
- Business premises plans
- Financial projections and needs
When creating a business plan for a franchise in the food service industry, however, there are some more specific considerations to make. Whether you’re starting a restaurant franchise, a pub franchise or a coffee shop franchise, you’ll need to include the following imperative components in your business plan...
>> Read more:
- 12 Things to Consider When Identifying the Right Location for Your Restaurant Franchise
- 3 Ways to Get Funding For Your Restaurant Franchise
- Regulations and Licences Required to Open a Restaurant
- 14 Tips for Defining and Reaching Your Restaurant's Target Customers
- Hiring Employees for Your Restaurant
- Choosing a Concept for Your 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
5. 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
>> Read more:
- Franchising 101: The Official Franchise Start Up Checklist (Part 1)
- Franchising 101: The Official Franchise Start Up Checklist (Part 2)
- New Year, New Career: No Better Time Than Now to Start a Franchise Today
- Franchising 101: 8 Signs You're Ready to Start a Franchise
- Starting a New Business Doesn't Always Lead to Immediate Success: Here Are 5 Ways to Change That
- It's Never Too Late to Start a New Business
6. 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 on how to choose the food franchise that’s right for you, or an article all about marketing your restaurant franchise.
Lily Sweeney, Point Franchise ©