Sample Business Plan on Franchise Business Plan
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EXECUTIVE SUMMARY
The Business Concept
The Smith Group, Inc. (The Smith Group or the Company) will be a franchise of Hungry Howie’s, Inc. pizza chain. The Company will offer customers the Hungry Howie’s standard food and drink items including pizza, subs, salads, bread sticks, calzones, wings, chicken tenders and soft drinks by way of delivery and carry out. The Company is located in XYZ, MyState.
Hungry Howie’s, Inc. is one of the fastest growing and award-winning pizza franchisors in the country. The corporation has been recognized as a “Top 200” Franchise Chain (Franchise Times- October 2004), a “Top 400” Franchise Opportunity (Restaurant & Institutions – July 2005) and listed as the #1 Pizza Delivery/Carry-out Franchise Opportunity in the USA (Entrepreneur Annual Franchise 500). Its unique flavored-crust pizza and its attention to quality have earned it high regards in the competitive pizza restaurant industry.
The Company’s location will be in a growing and bustling area. The corporate office of Hungry Howie’s, Inc. is identifying prime location sites in and around the XYZ area of Dallas-Ft. Worth to locate the restaurant. The market in this area is in need of a pizza franchise that has great community values, excellent customer service and a unique style of pizza.
Excellent Market Characteristics
The Dallas-Ft. Worth area is a booming economy with plenty of activity. The city of Dallas is home to 64,000 companies that employ over a million people. It is the financial, business professional, transportation and health care center of the Southwest. With one of the most diverse and large city economies in America, Dallas hosts leading firms in business services and finance, information technology, health care, media, advanced manufacturing, transportation and distribution, food processing, and many others.
As one of the fastest growing metropolitan areas and the ninth largest city in the United States, Dallas’ business community can rely on the most experienced financial institutions, accounting firms, real estate developers and stock brokerage firms in North America. Ten Fortune 500 companies have their headquarters in Dallas.
Great Opportunity
The multi-billion dollar pizza market represents a lucrative opportunity for the sharp investor. Hungry Howie’s has combined the right ingredients and years of successful experience to create a superb, growth-oriented business operation. Its delicious, high-quality Flavored Crust™ pizzas, oven baked subs and salads uniquely position Hungry Howie’s in the pizza marketplace, allowing it to fully capitalize on the fastest growing segment of the food service industry.
Hungry Howie’s utilizes innovative management procedures and imaginative marketing strategies to support the day-to-day operations of a franchised store. The corporation provides a variety of services and programs to help each franchise increase their market share and enhance their financial position. The Smith Group will benefit from the expertise of the corporation’s seasoned franchise development team composed of professionals who are committed to the continuing growth and expansion of each store and the franchise system.
Profitable Operations
The Smith Group expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars and the competitive landscape.
Projections call for the Company to generate revenues of $424,000 in its first twelve months. The Smith Group will achieve strong growth over the next several years, reaching $620,000 in revenues, $237,000 in operating income and more than $116,000 of net income by the fifth year.
The Opportunity
Pizza Industry Growth
In a report released by PMQ Magazine entitled Pizza Power Report 2007, staff writer Tom Boyles says, “Based on statistics provided by InfoUSA, the unit growth for the pizza segment between July 2006 and July 2007 was very active. Not only did the pizza industry increase its volume of units between July of 2006 and July of 2007, sales saw one of the most significant rises in a few years. During this period the pizza segment saw a 3% increase in sales in both the QSR** and the CD** segments, which equates to an overall increase of $936,433,802 and brings the total U.S. pizza sales for these segments to $32,150,893,862.”
Additionally, the National Restaurant Association (NRA) stated that pizza sales, from period July 2006 to July 2007, of nearly $32.2 billion represented 6.29% of total ‘eating place’ U. S. restaurant sales of $511 billion in 2006. The NRA reported, at year end 2006, there were approximately 925,000 restaurants in America, of which 8.03% were in the pizza segment, as compared to 7.7% in 2005.
Independent Pizza Market
Analysts agree that the U. S. pizzeria industry is healthy and growing. Between July 2006 and July 2007 average sales were $432,723. The Independent market, classified as pizzerias not in the top 25 chains, are currently gaining ground on bigger chains gaining market share in the industry’s total sales for the second consecutive year.
According to Pizza Power 2007, independents comprised 66.51% of all U.S. pizzerias; up from 64.81% in the 2006 Pizza Power report. The report showed that as far as overall industry growth, “Independents also marched forward in this area and now earn 50.21% of the U.S. pizza industry’s sales, up from 49.47% of total U.S. industry sales reported in last year’s Pizza Power Report. Average store sales for independents also rose to $326,478, which is up from the $323,411 that was reported in last year’s Pizza Power Report.”
On average ‘mom and pop’ sales are less than average sales at a Top 25 chain, but independents continue to claim market share. In 2000, when the first PMQ Pizza Power Report was released, store sales for independents reflected 59.7% of total U. S. stores; in 2006 independents had increased their percentage to 66.51%. At year end 2000, independents owned 48.5% of all U.S. pizza sales; currently these independent stores own 50.21%. 1
Pizza Facts
For decades “Pizza Pie” has been one of America’s most loved foods. And, everyone seems to have a favorite style as well as topping. Today it’s difficult to find someone who hasn’t tried a slice of pizza.
A recent Gallup Poll reported that 82% of children ages 3-to-11 would rather have pizza than other food for lunch and dinner, such as hot dogs, macaroni & cheese, chicken nuggets, and hamburgers. We love pizza so much in the U. S. we have honored it with its own month - October! Crust and style choices of pizzas may include: