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Franchising as a business plan
KLUZÁKOVÁ, Lucie
The aim of this thesis is to propose the expansion plan of selected company through the creation of franchise chain. Before processing a franchise plan, I have prepared - based on a literature review - a structure of individual documents of the franchise package. As a part of practical research, I analyzed the external environment using STEP analysis as well as the case studies of one competitor, and further I analyzed the internal environment of the company using primary data obtained during the controlled interview with the owner of the chosen company. Based on the above mentioned information, I elaborated a SWOT analysis and - using the defined strengths and weaknesses as well as the opportunities and threats - I determined the strategy for the expansion of the company consisting in selling of franchise license. This strategy is divided in two parts: the first part concerns the expansion within regional and district towns. In this case, the franchisor considers granting a licence to franchisees who will open always three appropriately allocated small business premises in order to achieve a minimum monthly revenue of 900.000, - CZK. Over 5 years, i.e. from 2016 to 2020, the franchise prospectus counts with the acquisition of five franchisees; each of them has to establish three business premises in the selected geographical segment. Gross franchisor profit of the franchise chain amounts to 1.284.457, - CZK for the five years. The thesis focuses on this part of the expansion strategy. The prediction of annual costs, revenues, profits and cash flow of franchisee is a part of the franchise prospectus. I derived a gross profit of a franchisee in the first business year amounting to 1.719.496, - CZK, while the return on investment for the franchisee takes 2 years and 7 months. The second part of the strategy proposes the expansion to the capital. In order to achieve the highest possible turnover, it is useful first to expand the current business concept to the counter sale including seating space with several tables. Given that this form of provision of community feeding is connected with stricter legislative requirements such as the need of sanitary facilities for the guests, the concept must be first validated by the franchisor during a pilot operation.
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