Step 5: Plan
Prepare your business plan with expert guidance, explore your financing options, and ensure you understand the Franchise Disclosure Document.
Buying a franchise business is an important decision. Most successful franchise owners take the time to create a detailed plan, and then work that plan until they reach their business goals. There may be a few bumps in the road, but a good business plan will keep you on the path to success.
The beauty of franchising is that you will be in business for yourself, but not by yourself – with the support of a franchise company and many other franchisees behind you. A good franchise will provide you with detailed information and the tools to assist with your planning process. Below are a few valuable tools to help get you started.
Create your Business Plan
- Common start up costs from Item 7 in the FDD
- Create a 5-year income statement
- Include business projections with liabilities, income, wealth and equity
- Create a balance sheet
- Download FBRs free Franchise Financial Planning Workbook” which will step you through the process
Understand Your Financing Options
As a rule, lenders will typically require you to provide 20 to 30 percent of the total franchise investment as a down payment for a loan – the rest can come from several options. FBR’s financing center can help you identify the best fit for you. Here are the most popular franchise financing options:
- Direct financing assistance from the franchise company (ask if they provide financing options or work with preferred vendors)
- Small Business Association (SBA) loans
- Low-Doc SBA loans — for smaller loans and faster turn-around
- Retirement savings – Rollovers as Business Startup (ROBS) programs
- Portfolio loans — loans secured by your stock, bond, or mutual fund investments
- Secured and Unsecured loans through banks, credit unions and lenders
- Local business grants
- Loans from friends and family
Learn more about your franchise financing options.