For starters, initial franchise strategic planning takes place. A company must accurately describe its expansion goals and key success targets along with the Key Performance Indicators needed to duplicate the model. This is the franchisor’s opportunity to reflect on their aspirations for the company and future projections for the brand both at the franchisor and franchisee level.
A focus on brand development further formalizes a plan for brand and concept expansion. The question of how to expand the franchise model is explored during this initial strategic planning phase as well, ultimately developing a regionalized plan of expansion. These points are used in the franchise development process and communicated within the franchise business plan.
The industry in which the company operates must be investigated and competitors identified in order to correctly define the new franchise market niche. This competitive analysis is used in a benchmark analysis that gives a company a full understanding for the industry layout and the strategic implications of the franchise model. The franchise business plan covers the top potential competitors of a franchisor, examining the concepts, similarities, and operational formats, uncovering mistakes and successful components of predecessors. The comparative analysis is an excellent tool to discover ways in which the franchise model should operate to replicate others’ success and to avoid any downfalls.