BUSINESS PLAN ON A FRANCHISE APPLICATION

Key Information

Length:                                 2,500 words maximum for Business Plan

Format:                                 Business Plan

Assessment Criteria

Knowledge

• Examine how creativity, innovation and entrepreneurship can facilitate and develop businesses
• Explain the functions and activities of a business

 

Skills

• Develop ability to collect, analyze and reformat information from a variety of relevant sources
• Develop team-working skills
• Dissect, interpret and formulate solutions to a variety of business related problems
• Demonstrate ability to research and locate information relevant to understanding business.

Eastern Foods – Stage 3   Franchise Application

Since the announcement that Eastern Foods was to continue its global expansion by opening a number of UK Restaurants there has been a great deal of interest from potential franchisees. This has not been part of its business model in other countries. The company has only operated with an internal structure of appointed managers.

The franchise model does however seem to have potential. Eastern Foods have, therefore, decided to make four of their UK outlets available to franchise partners if there are suitable applicants. One of the outlets available is Sunderland.

They have advertised the opportunities and a summary of the details made available are shown below:

What are the requirements to open an Eastern Foods franchise?

If you qualify to open a franchise and are willing to invest your time and money it can be a financially rewarding and life-changing experience.

What does a franchise cost?

As a guide, the cost of the Sunderland restaurant will be £150,000.

You will need to provide at least 25% of the value as unencumbered funds – from non-borrowed personal resources. The remaining 75% can be funded through a bank loan with favourable funding terms.

There’s also a one-off franchise fee of £15,000 and a training deposit of £5,000 which is refunded when you complete your training

There are also ongoing fees:

1. Monthly rent on the premises, based on sales and profitability (10%).

2. Service fee for the use of the Eastern Foods system, currently 5% of sales

3. Contribution to the national marketing spend, currently 4.5% sales

Other requirements the franchisee/s need to provide or demonstrate at the presentation are:

1. The ability to develop and execute a business plan.

2. The ability to manage finances including an understanding of basic financial statements.

3. Good management skills and a commitment to personally manage the day-to-day operations of the restaurant business.

4. A willingness to complete a comprehensive world class training programme

5. The capability to effectively manage an organisation that recruits, trains, and motivates restaurant employees who deliver an exceptional customer experience.

 

 

Task

You and a team of three or four colleagues have decided to prepare a bid for the franchise at Sunderland.

 

Eastern Foods have indicated that they are to select the franchisees by interview. At the interview the teams will be required to:

1. Provide a business plan which details their proposals for the franchise, the plan should include:

 

1. A precise description of the business including; challenges and risks associated with the business start-up
2. Identification of vision and objectives
3. The market environment the business will be competing in
4. A comprehensive industry and competitor analysis
5. Route to market and steps to commercialisation
6. Operational plan, production, location etc
7. Human Resource consideration, staffing, recruitment, training etc
8. Financial analysis to include: Income statements, cash flow statements and balance sheet
9. Any other relevant considerations

 

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