Franchise: the secrets of a good business plan

An article from the special franchise issue of L’Express. On newsstands since March 17

Before signing a franchise agreement, you must prepare a business plan. In other words, a roadmap that will guide your project. To determine this, start by conducting market research, comparing the data provided by the franchisor with your own information.

Do not adhere to the details of the franchisor

“Meet franchisees that aren’t necessarily on the list provided by the brand. These serve as showcases, but don’t always stick to the network’s average,” warns Christophe Girard, director of Initiative Essonne, a support structure for the founding of companies. Also specify future rents, the right to rent, the works to be carried out… Everything down to the euro or almost.

Also make a list of the financing you need, the size of your contribution, bank loans, fees… Then make a prognosis of the profit and loss account. Again, there is no question of holding on to the franchisor’s data alone. Adjust these amounts to your catchment area and your type of clientele.

Another tip: divide your sales by acquisition channel (on site, in-store pickup, internet, delivery, etc.). In the event of a new health crisis, you will be able to quickly identify the points you can rely on. On the other hand, detail your expenses: goods, personnel costs, rent, taxes…

Don’t minimize costs!

When you subtract the expenses from the income, you get the expected operating income. Be realistic, don’t minimize costs! Also, don’t neglect cash flow needs. “This is the amount available in your current account. It will be used to connect the payment terms of your different partners. Again, think big,” Christophe Girard insists.

Once these large financial masses are established, calculate three essential ratios for the profitability of your future franchise: the margin percentage (difference between the selling price and the purchase price), the rental effort percentage and the payroll. Even if you do not pay yourself a salary for the first two years, you should include this salary in your prognosis.

Finally, plan at least two scenarios: one realistic, the other pessimistic (example: six-month closure). This anticipation allows you to be more reactive in the event of a hard blow.

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“I made 17 versions!”

“I made 17 versions of my business plan!” laughs Frédéric Sourdoire. This recent King Marcel franchisee (burgers) in Nanterre (Hauts-de-Seine) is not kidding. He would open his point of sale in February 2020. “The franchisor had offered me a great location in a newly rehabilitated area on industrial wasteland, with universities, offices, a cinema complex… I started from scratch, I wasn’t buying back business, so I built my plan around the number of burgers that I had to sell every day to reach my break-even point,” he recalls. Only here it is: work is lagging behind… and the first incarceration overflows hopes of opening. He goes his plan and his preliminary budget “Given the context, I had to rely more on deliveries that also generate less margin than on-site sales because of the cost of delivery platforms,” ​​he explains. He then negotiates fiercely with his landlord. “Either he gave me rent reduction, or we let it there and went into conflict. At the same time, the bank granted me a nine-month grace period, against three initially planned.” He finally opened his business in mid-December 2020. He has since adjusted to reach his famous break-even point. “More than a year after opening, the profitability isn’t there yet, but I’m not losing any money,” he concludes. A first step.

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