Business Plan of a Coffee Shop Franchise

Franchise Management

Franchise Structure

 

The current structure has been put in place in such a way as to allow the Coffee Break brand to enter a significant sized shopping centre with a Franchisee who has an investment in the shop.

Currently the Franchisee contributes a franchisee fee (Royalty) of 7% on gross turnover (excluding VAT) and a 5% fee for marketing of the brand. Gross turnover comprises all sales taken through the point of sale system.

Operating Management Structure

A private company will be established and used to act as a vehicle for the business operations. Me Catherine Green and Me Alison Ntondo will be partners in a 50% / 50% shareholding structure. The daily operations management of the outlet will be the full time responsibility of Me Catherine Green.

The entrepreneurs

Catherine Green

Catherine Greenmatriculated with a N3 Business Matric from Damelin with subjects including small business management & entrepreneurship. Catherine also have short course qualifications in Drama, Graphic design, Art & film appreciation, Art management & administration. Her work experience includes (abbreviated):

• GSRC International - P.A. to Managing Director, my duties is to handle all Public Relations and Human Resources. Organising all events for staff, clients, etc. Handling clients and suppliers, helping with marketing. • Plan International (UK) - Trainee Manager.

Alison Ntondo

Miss Alison Ntondo has attained the following qualifications:

• Diploma in Public Relations, UNISA, 2005
• Diploma in Media Studies, Boston City Campus, 2002

Short courses included:
• Basic Business Communication (2001), PRISA
• Financial Services: Wealth management (2006), Damelin School of Banking
• It's My Tender (2005), Sunday Times and Cell C

Her work experience includes (Abbreviated):
• First National Bank, Client Service Consultant and Corporate Consultancy with her main responsibility providing financial advice, promoting and selling a range of financial solutions across a broad spectrum of product offerings to best meet and grow the financial service needs of high value customers
• Department of Public Service and Administration, Internship and acting as Coordinator of Employee Wellness with main responsibility including responsible for all marketing strategies on Employee Wellness Program, coordinating awareness campaigns and creating awareness on employee wellness campaign.

Training

• The Franchisor provides quality products through well trained people who are at all times responsive to customers needs, making it the first choice health food provider. The franchisor will oversee the training of the staff until the output quality is of satisfactory levels to sustain and increase the Coffee Break brand name. ABC Franchises there after will provide continuous assistance and support on all related training.

Management reporting and systems


ABC Franchises monitors the progress and success of each unit monthly and provides reports and an overview of the progress of the Franchise Channel as a whole. The Franchisee will be required to utilize the software packages provided by ABC Franchises as well as provide other related figures as requested. The Franchisee is accordingly required to submit monthly Management reports and annual audited financials.

Market analysis


The market analysis is conducted by ABC Franchises specialist. ABC Franchises is responsible for brand building and brand maintenance. The Location is selected to maximise the shop profitability ensuring franchisee success.

Sales and Marketing Strategy

Advertising


ABC Franchises contributes a significant portion of the finance to national media campaigns be it via print, audio or visual media. The Franchisee will be encouraged to enhance the image of the Coffee Break by employing additional advertising and/or promotions, subject to approval from ABC Franchises. This additional advertising cost will be carried by the franchisee.

The franchisee will deploy an initial campaign to create awareness of the shops location and existence to the public. Promotions will be negotiated with ABC Franchises to introduce the outlet and create shop/outlet awareness to the public in the direct geographical area.

Financial Overview


Required Capital Funding
The franchise purchase amount is R1,200,000.
Cash flow Analysis
An income cash flow of R170 000 per month is used in calculating the viability of the Sunshine Mall outlet. This figure of R170 000 is the actual average monthly outlet figures as provided by ABC Franchises for 4 outlets over the past 2 years. Refer to calculation averages below.

The analyses shows that the Coffee Break will be viable and the entrepreneurs will be able to service the debt repayment schedule as required.

 

The Financial Plan

Please refer to our Financial Plan page for more information on what the Financial Plan entails.

Break-even Analysis

Please refer to our Financial Plan page for a formula to calculate the Break-even point.

 

Projected Cash Flow

Click here to download a Cash Flow template.

Projected Income Statement (Profit and Loss)

Click here to download an Income Statement template.

Projected Balance Sheet

Click here to download a Balance Sheet template.

 

 

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