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Franchise Investment Proposal

Franchise investment proposals document a franchise’s terms, conditions, and financial projections in detail when approaching potential investors. In addition to the franchisor’s pitch, the legal and regulatory paperwork (i.e., Franchise Disclosure Documents) applicable to the franchise industry must be included.

Types Of Franchise Investment Proposals (8)

  1. Area Development Franchise – Proposals approaching investors with the right to open and operate any number of franchise units in a territory while offering exclusivity.
  2. Business Format Franchises – This proposal focuses on franchise rules, marketing strategies, and financial projections since it approaches investors for franchisees, leaving sales up to the franchisee.
  3. Conversion Franchises – Proposals offering investor opportunities for franchises intend to absorb independent business and, therefore, feature branding benefits and parent company support as incentives.
  4. Distribution Franchise – Proposals to find investors in purchasing a franchisee’s right to manufacture and sell a branded product.
  5. Job-Franchise – Proposals seeking franchise investors for a service-based franchise while presenting available support and training options.
  6. Multi-unit Franchise – This proposal approaches investors for equity or capital with the purpose of opening and running two or more franchise units or locations.
  7. Master Franchise – A proposal seeking investment to gain the exclusive rights to open a specific franchise in a country or area while presenting sub-franchising strategies.
  8. Single-Unit Franchise – A proposal seeking investor support to open and then operate a single franchise location, storefront, or business and presenting projected revenue forecasts and cost estimates.

What Should Be Included (19 Items)

  1. Franchise Investment Proposal Cover Page
  2. Table Of Contents
  3. Franchise Investment Proposal Executive Summary
  4. Franchise Investment Introduction
  5. Franchise Investment Overview
  6. Available Franchise Territories
  7. Franchise Investment Details
  8. Franchise Support
  9. Franchise Agreement
  10. Franchise Qualifications
  11. Franchise Site Selection And Build Out
  12. Marketing And Advertising
  13. Financial Projections
  14. Franchise Success Stories
  15. Franchise Investment FAQs
  16. Franchise Application Process
  17. Legal And Regulatory Concerns
  18. Franchise Contact Material
  19. Appendices

1. Franchise Investment Proposal Cover Page

Organize the franchise name and contact information as well as its logo for a cover page presentation. As the first impression of the franchise, keep the design especially professional and presentable.

  • Franchise Name, Franchise Logo
  • Proposal Title, Slogan
  • Contact Information, Submission Date
  • Franchise Overview
  • Table Of Contents

2. Table Of Contents

Present the name of every section in the proposal as well as the pages where they can be found. Also, if the proposal has subheadings or images, list the pages where they are located.

  • Introduction, Executive Summary
  • Franchise Overview, Investment Summary
  • Franchisee requirements, Training
  • Support, Business Model, Operations
  • Marketing, Advertising, Financial Projections

3. Franchise Investment Proposal Executive Summary

Begin with a summary of the proposal’s main topics while promoting the areas that interest the investor. For instance, introduce the unique selling points of buying into the franchise.

  • Introduction, Franchise Overview
  • Investment Summary, Financial Projections
  • Market Opportunity, Unique Selling Proposition (USP)
  • Next Steps, Franchisee Requirements

  • Market Opportunity, Training, Support

4. Franchise Investment Introduction

Introduce the franchise with a compelling summary of its mission and history as well as its values and reputation. It is also imperative to discuss the franchise’s branding presence and marketing opportunities.

  • Greeting/Welcome, Proposal Purpose
  • Franchise Background, Franchise Mission
  • Values, Industry Overview, Target Audience
  • Franchise Concept, Objectives
  • Value Proposition, Call To Action (CTA)

5. Franchise Investment Overview

Explore the franchise further by presenting its competitive advantages and consumer reach. Specifically, discuss its past challenges, successes, and financial projections.

  • Franchise Introduction, Franchise History
  • Core Values, Brand Identity, Mission Statement
  • Franchise Concept, Market Positioning
  • Current Franchise Network, Recognition
  • Brand Expansion, Commitment to Quality

6. Available Franchise Territories

Present the geographic regions where this franchise offer is valid, also laying out a value proposition with its selling points. For example, provide the offered regions’ demographics and market research detailing the franchise’s environment.

  • Territory Description, Territory Availability

  • Territory Size, Territory Demographics, Territory Fees

  • Market Research, Consumer Demand, Growth Potential
  • Territory Allocation, Exclusivity, Area Development
  • Territory Growth Potential, Territory Selection Assistance

7. Franchise Investment Details

Fully disclose the costs and budget requirements to invest in the franchise, such as equipment costs. In addition, explicitly declare the franchise fee.

  • Total Investment, Initial Investment Breakdown

  • Initial Franchise Fee, Working Capital Requirements
  • Royalty Fees, Advertising Fees, Financial Assistance Programs
  • Financing Options, Payment Schedule
  • Fee Structure Changes, Return on Investment (ROI)

8. Franchise Support

Discuss the support options to potential franchise investors, such as training programs. Also, present the quality control standards of the franchise and how its support programs promote participants.

  • Training Programs, Operational Support
  • Marketing and Advertising Support, Regulatory Compliance
  • Technology Support, Supply Chain Assistance
  • Quality Control Measures, Field Support, Visits
  • Franchisee Networking, Research and Development

9. Franchise Agreement

Spell out the franchise agreement as well as its supporting contracts and documentation. Detail the terms and conditions and the regulations applicable to them accordingly.

  • Term of the Agreement, Products, Services, Trademarks

  • Territory and Exclusivity, Advertising, Intellectual Property

  • Franchise Fees and Royalties, Marketing Obligations
  • Operating Standards and Brand Compliance, Transfer

  • Training Requirements, Renewal, Sale Of Franchise

10.  Franchise Qualifications

Once the franchise’s obligations have been detailed, inform the potential franchise investor of their background or history requirements. Explicitly state the circumstances that would disqualify a prospective investor from participating in the franchise.

  • Financial Requirements, Minimal Liquid Capital
  • Business Experience, Leadership Skills, Commitment

  • Brand Value Alignment, Customer Service, Marketing Sales Skills

  • Systems Compliance, Processes Compliance, Compatability

  • Legal Requirements, Background Requirements, Training

11. Franchise Site Selection And Build Out

Describe the processes to aid the franchisee in selecting a site for their franchise (i.e., lease negotiations, locations). Show the franchise’s commitment and resources in significantly assisting the start of the franchisee’s investment.

  • Site Selection Criteria, Market Analysis, Build-Out Guidelines

  • Franchisor Support, Real Estate Assistance, Cost Estimates

  • Lease Negotiations, Timelines, Permitting

  • Regulatory Compliance, Milestones

  • Grand Opening Support, Post-Opening Support

12. Marketing And Advertising

Present the marketing strategies together with the advertising campaigns available to the franchisee. Use this area to demonstrate the franchise’s audience reach and market presence.

  • Sponsorships, Advertising Funds Marketing Collateral

  • Marketing Strategies, Market Research

  • Social Media Guidelines, Brand Consistency,

  • National Marketing Strategy, Local Marketing Support

  • Public Relations (PR) Support, Digital Marketing

13. Financial Projections

Discuss the financial potential of the franchise with its forecasts so that its ROI (return on investment) calculation is presented. If possible, show the growth projections for new franchises by comparatively detailing the potential of each offered territory.

  • Operating Expenses, Cost of Goods Sold (COGS)

  • Net Projections, Break-Even Analysis, Cash Flow Projections

  • Cash Flow Projections, Gross Profit Margin, Sales Projections

  • Return On Investment (ROI), Sensitivity Analysis, Assumpsions

  • Comparative Analysis, Methodology, Financial Ratios

14. Franchise Success Stories

Document the successes of past franchise investors or franchisees, specifically quoting them where possible. Real-life stories or anecdotes also aid in promoting the franchise’s offer.

  • Success Stories, Financial Achievements

  • Community Impacts, Business Growth

  • Expansion, Before-And-After Comparisons

  • Video Testimonials, Franchisor Support

  • Founder Quotes, Testimonials, Awards, CTA

15. Franchise Investment FAQs

Compile a listing of the questions new investors are known to ask while inviting comments or additional inquiries. Additionally, reiterate the franchise’s website address and social media information.

  • Franchise Overview, Franchise Qualifications

  • Investment Details, Franchise Support, Marketing

  • Training Programs, Site Selection And Build Out

  • Target Audience, Customer Base, Franchise Agreement

  • Advertising, Legal Concerns, Compliance, Exit Strategies

16. Franchise Application Process

Produce the instructions for the franchise application, specifically identifying its prerequisites. Discuss this option in detail if the franchise provides additional support during the application process.

  • Qualification Criteria, Initial Application Submission
  • Franchise Discovery Day (if applicable), Review, Meetings
  • Preliminary Evaluation, Franchise Disclosure Document (FDD)
  • Site Visit, Due Diligence, Final Application Submission

  • Approval Notices, Rejection Notice, Onboarding, Launch

17. Legal And Regulatory Concerns

Accompany this franchise offer with the legal paperwork and definitions necessary to continue, such as the required franchise disclosure document (FDD). Since the individual jurisdictions will have separate requirements, specifically gear this discussion to the target franchise territory.

  • Franchise Disclosure Document (FDD), Legal Structure
  • Contractual Agreements, Termination & Renewal Clauses
  • Legal Assistance, Councel, Insurance Requirements

  • Territorial Rights, Exclusivity, Regulatory Compliance

  • Compliance Audits, Legal Support, Training

18. Franchise Contact Material

Report the identity, role, title, and information of the franchise contact people, specifically indicating who the primary contact is. Secondary contacts should include parties such as the franchise’s development team.

  • Franchisor Corporate Headquarters, Key Contacts
  • Franchise Development Department, Franchise Sales Representatives
  • Website, Online Resources, Social Media Profiles

  • Customer Support, Inquiries, Request For Information (RFI) Form

  • Availability Hours, Physical Address, Preferred Contact Method

19. Appendices

A franchise investment proposal with a solid pitch will contain a wealth of information that is in various formats. Thus, consolidate this supporting or supplementary material into a single area and properly cite it as needed.

  • Training Programs, Financial Projections, Letters Of Intent
  • Legal Documents Marketing Materials, Site Selections And Critera
  • References, Operational Manuals, Corporate Guidelines

  • Forms, Contracts, Analysis Charts, Media Aids

  • Contact Information, Market Analysis, Demographic Data