A Business Plan and Loan Request

for a
SAMPLE COMPANY Franchise
Submitted to
By

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Table of Contents
1. Statement Of Purpose ..................................................................................................................3
2. Executive Summary......................................................................................................................4
3. Market Research ...........................................................................................................................5
3.1 Industry ...................................................................................................................................................... 5
3.2 Households................................................................................................................................................ 5
3.3 Competition................................................................................................................................................ 5
3.4 Direct Competition ..................................................................................................................................... 6
3.5 Indirect Competitors .................................................................................................................................. 6
3.6 Customer Profile ........................................................................................................................................ 6

4. Core Partners ................................................................................................................................7

5. Description of Business...............................................................................................................8
6. Marketing Plan ..............................................................................................................................8
6.1 Target Market ............................................................................................................................................ 8
6.2 Marketing Strategies.................................................................................................................................. 8
6.3 Promotion, Publicity and Advertising ......................................................................................................... 9

7. Management................................................................................................................................10
8. Summary .....................................................................................................................................11
9. Financial Plan..............................................................................................................................12
10. Analysis of Investment.............................................................................................................13

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1. Statement Of Purpose
is seeking a loan of
for the purpose of developing a
SAMPLE COMPANY
to fund operations. This
SAMPLE COMPANY Franchise in
.
will also inject
amount is necessary to cover the cost of the turnkey operation, which includes equipment,
startup supplies, inventory, signage, and professional training.
to be paid in estimated monthly installments of
The requested term of the loan is
per month at an interest rate equivalent to the prime rate plus a
approximately
.
maximum of 3%, beginning
The source of repayment is outlined in the cash flow analysis and the schedule of repayment.
Repayment will be made exclusively from cash generated from daily operations.

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2. Executive Summary
SAMPLE COMPANY offers an innovative, custom and unique approach to closet organization.
SAMPLE COMPANY Franchisees offer and sell customized closets, offices, garage and other storage
space design, production and installation services and related products to both residential and
commercial customers.
With a wealth of superior shelving components and high quality space saving items to maximize
storage space, SAMPLE COMPANY transforms these areas into pleasant organized spaces in a
remarkably short period of time, even the same day.
SAMPLE COMPANY will offer a wide range of storage solution design and installation services to
clients within
SAMPLE COMPANY has a high level of expertise in storage solution design and installation and will
provide superior personal services to all clients.
The advantages of being a SAMPLE COMPANY franchisee are multifaceted in that they offer network
recognition; cooperative local and regional advertising programs; national discounts and volume
purchasing; an active research and development department; and continuous support through area
representatives and an 800 Customer Service line. Also, as a member of the network, we will have
the opportunity to share and profit from the experiences of other owners through networking at
regional meetings, seminars and through online tools such as a very active franchisee message
board.
For an investment of $62,500.00, SAMPLE COMPANY provides a complete business development
program, training and support.
(See attached Analysis of investment for details concerning
equipment, fixtures, supplies, etc.)
With this type of support, our business will have the capability of diversifying the service/product
mix in response to changes brought about by the availability of new technology and consumer
demand.

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3. Market Research
3.1 Industry
The Canadian wood-based building products sub-sector represents a large part of the Canadian
buildings products industry. This segment of the industry consists of firms that manufacture a
variety of commodity and valueadded wood products and components including lumber, woodbased panels, complete prefabricated buildings and houses, kitchen cabinets, windows and doors,
wood flooring, millwork and moldings.
This industry enjoys a number of key competitive advantages in the global marketplace. These
include a skilled labour force, an efficient intermodal transportation system, a large resource base
and tariff-free access to the United States and Mexican markets.
SAMPLE COMPANY falls under the category of Office Furniture (including Fixtures) Manufacturing
(NAICS 3372). This category includes Wood Office Furniture, including Custom Architectural
Woodwork manufacturing.
Based on the Annual Survey of Manufacturers data this category has experienced an annual
growth rate of 11.3 % per year in number of principal establishments (1994-2003).
The total number of employees for the Office Furniture (including Fixtures) Manufacturing industry
group increased at a compound annual growth rate of 7.5% between 1994 -2003. This increase can
be directly linked to the increase in the number of principal establishments over the same time span.
Manufacturing shipments for this industry group increased at an average compound annual rate of
10.1% per year. (1994-2003)

3.2 Households
area during the 2006 census show the largest proportion
The household characteristics of the
of households being 2-person dwellings with 1-person and 3-person dwellings following respectively.
The predominant household family types with an average market income in excess of $80,000.00 in
(2001-2005) are Married Couples, Two Parent Families with children and Married couples with
live-in relatives. The median income and age for each area in 2006 is as follows:
Area
Kawartha Lakes
Peterborough
Port Hope
Cobourg

Median Income
$68,463
$69,487
$76,163
$78,154

Median Age
45.1
41.7
39.1
46.1

Statistics Canada reports that in 2002 the average home owners expenditures on repairs and
renovations in
totaled $3,479.00. This number included contract work (66%) and materials
for the do-it-yourself repairs and renovations (33%).

3.3 Competition
In the province of
there are in excess of 80 storage solution providers. The majority of these
are located in the Greater Toronto Area (GTA) and are retail stores requiring a customer visit.

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3.4 Direct Competition

The

area has 2 direct competitors

has one direct competitor

Competitor

Both of these businesses are retail stores.

of which it is also a retail store.

Price Level

Warranty

Due to the nature of the sales cycle for these stores, a typical sale takes approximately 6 to 12
weeks to complete.

3.5 Indirect Competitors

Indirect competitors to SAMPLE COMPANY can be identified by the term Big Box Stores. These
would typically include, Ikea, Rona, Canadian Tire and small shelving stores. These businesses sell
the consumer the storage solution and then the consumer transports the item to their home where
they assemble their purchase.
All of the communities in the SAMPLE COMPANY area of
indirect competitors.

focus area have these types of

3.6 Customer Profile

SAMPLE COMPANYs ideal customers are women between the age of 25 and 75 with an annual
household income of $ 80,000.00. Purchasing patterns seem to favour the female of the household
as apposed to the male. The target market is Empty Nesters and/or homeowners who have owned
their own homes for five years.
This market segment enjoys a higher standard of living and the prestige that comes with it. By
moving outside the cities, they realize economies of scale that they would not be able to realize,
through lower real estate costs and taxes.
These savings relate well to the current trends of this demographic. They exhibit an interest in
home improvements with an emphasis on quality in their homes. Products that are customized and
tailored for the individual are a growing market area and satisfy their tiny indulgence needs.
In these fast paced times, both individuals and businesses are willing to pay others for tasks they
do not have time to do themselves, especially if it will save them time.

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4. Core Partners
The major supplier for SAMPLE COMPANY is SAMPLE COMPANY Corporate. SAMPLE COMPANY
Corporate will facilitate the supply of franchise rights, raw materials, accessories and bi-products
used in the installation of a SAMPLE COMPANY system. If the customer has additional needs that
are not covered by the SAMPLE COMPANY system, they will then be sourced locally if possible and
the products with the best value which meet SAMPLE COMPANYs level of quality will be selected.
SAMPLE COMPANY Corporate is financially stable and primary market research revealed that they
are very dependable regarding meeting delivery needs.

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5. Description of Business
SAMPLE COMPANY offers an innovative, custom and unique approach to closet organization.
SAMPLE COMPANY offers and sells customized closets, offices, garage and other storage space
design, production and installation services and related products to both residential and commercial
customers.
With a wealth of superior shelving components and high quality space saving items to maximize
storage space, SAMPLE COMPANY transforms these areas into pleasant organized spaces in a
remarkably short period of time, even the same day.
Unlike most other closet companies, SAMPLE COMPANY uses customized closet design software that,
in addition to making the design process faster, allows the customer to view the solution prior to
installation. Seeing three dimensional views of the solution is not only a great sales tool, it
eliminates any customer misunderstandings about what is to be installed.
To further differentiate ourselves in the expanding storage solution industry, SAMPLE COMPANYs
customized trucks facilitate a unique Design and Install Same Day service, taking the customer from
measure to pleasure without leaving the premises. This service can be invaluable to customers
moving into a new house, or customers with a closet disaster on their hands.

6. Marketing Plan
6.1 Target Market
The target market for SAMPLE COMPANY is women between the ages of 25 and 75, with an annual
household income of $80,000.00 and above. This market would be interested in SAMPLE COMPANYs
Closet, Pantry and Kitchen solutions. A secondary market is men with the same demographic. This
market would be interested in SAMPLE COMPANYs Garage, Office and Entertainment Centre
solutions.
SAMPLE COMPANYs goals in the first year would be to be successful, to generate its first sale in the
first month of operation and to reach a sales revenue goal of $150,000.00.

6.2 Marketing Strategies

SAMPLE COMPANYs strategy is to create relationships with local builders, realtors and contractors in
order to target the new home buyer. This will also be accomplished through organizations such as
Welcome Wagon. Gift Cards will be distributed by the above mentioned, providing the new home
buyer with a $100 savings toward a SAMPLE COMPANY purchase.
The already strategic alliance established with Home Depot will be nurtured by keeping their
personnel apprised of all of the SAMPLE COMPANY offerings and new relationships will be fostered
with the future Lindsay Home Depot.
Direct Mail utilizing flyers and door knockers to specific postal walks that fit the SAMPLE COMPANY of
Kawartha target market will be used in order to target the existing home owners.
SAMPLE COMPANY of Kawartha will also be represented at local Home shows and Cottage shows
throughout the focus area. This will provide brand recognition to the consumers in these areas and
help to penetrate the cottage market.

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6.3 Promotion, Publicity and Advertising

Promotional and advertising materials will consist of Flyers, Door Hangers, Newspaper Display
Advertisements, Telephone Directory Advertisements, Gift and Contact Cards. All promotional and
advertising materials will inform the consumer about SAMPLE COMPANYs Free Home Consultation
policy.
Free advertisement sources such as Kijiij and Facebook will also be sought out and utilized.
An Advertising Fee (2% of Gross Sales) will be allocated to SAMPLE COMPANY Corporate in order to
provide Radio and Television spots coupled with representation at large Trade Shows (The Toronto
Home Show, The Toronto Cottage Show etc.).
SAMPLE COMPANY will also become a member of local associations, chamber of commerce and
home owners association in order to further the SAMPLE COMPANY brand.

6.4 Marketing Action Plan Present and Future

The activity schedule of the above mentioned strategies will take on a two tier approach Initial
Advertising which is presented in three stages and Ongoing Advertising.
The first stage or Initial Advertising stage will encompass display advertisements or Flyer Inserts
being run cyclically in the local publications, daily newspapers and periodical publications
Cost effectiveness will dictate the method flyer or display advertisement regarding each
publication.
The velocity of each newspaper will be cyclic, meaning that one or possibly more publications will be
used during the first cycle of advertising. The next cycle will incorporate a different publication. The
cyclic method of advertising will allow SAMPLE COMPANY to target specific markets in the focus
area. Sales leads will then be generated in the regional areas in which the advertising had recently
run thus increasing productivity. Advertising and promoting in this manner reduces the amount of
sporadic travel throughout the different regions.
Advertisements with Home magazines are covered by SAMPLE COMPANY Corporate.
Ongoing Advertising encompasses the use of the Gift and Contact cards along with the Free at
Home Consultation.
The Gift Cards will be used to help drive first time sales as consumers will have the opportunity to
redeem $100.00 savings with the purchase of their SAMPLE COMPANY installation. These cards will
be distributed to local builders, realtors, contractors and the Welcome Wagon organization.
Most importantly, The Free at Home Consultation gets SAMPLE COMPANY in the consumers door.
People purchase with their eyes. If SAMPLE COMPANY can access their clients home and a graphical
representation of the finished solution can be applied to their troubled storage area there is a very
good chance the client will move forward with the sale.

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7. Management
As the following resumes indicate,
COMPANY Franchise

highly qualified to manage and operate a SAMPLE

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8. Summary
to start our new SAMPLE COMPANY Franchise. The loan will
We are requesting a loan of
be used to purchase equipment, fixtures, and startup supplies; and to pay for training and
consultation in relation to appropriate business practices, operations, and marketing techniques
for this type of business.
We respectfully request that this loan be approved for the following reasons:
SAMPLE COMPANY Corporate has been involved in the development of over 15 franchised
SAMPLE COMPANY locations in Canada. Franchisees are provided with a proven operating
system documented in a set of operations manuals that includes promotional materials,
advertising slicks, and all procedures necessary for the efficient operation of a storage
organization system. The SAMPLE COMPANY HQ staff provides ongoing education and training
to franchisees in relation to conducting, promoting, developing, and operating the business.
*The projected cash flow shows that the business will generate enough cash to service the
debt, cover operational expenses and build long-term equity and profits.
* The loan will be fully collateralized with equipment and personal guarantees.

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9. Financial Plan
Overview.
The following financial assumptions are offered for the development of
individualized business plans for a SAMPLE COMPANY Franchise location. These assumptions
are based on averages arrived at through research and analysis of multiple centres over a
period of years. These figures will vary according to the demographics of each centre, choice of
service and product mix, and relative pricing by competition in the area.
Guidelines for Calculating Projections
Revenues from Core Services/Products: Calculations are based on 22 working days each
month, with escalating revenues per month.
The following financial assumptions have been used in determining the businesses Start-Up
Costs, Sales and Income projections.

Average Sale = $2,500.00 this is based on conversations with other SAMPLE COMPANY
franchisees
A slow increase in sales due to the large focus area to be marketed initially
There will be no owners draw for the first three months (or longer if necessary)
The first three installations will be supplied through start-up inventory this inventory will be
replaced in the third month of operation
A large advertising and promotion campaign will be undertaken in the first month
Spring and Summer generally see a higher sales volume especially with the return of the
cottagers - this is based on conversations with other SAMPLE COMPANY franchisees
September can see a drop in sales volume due to Back to School and post summer
demands
December can see a reduction in sales volume due to the Christmas season

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10. Analysis of Investment

Item

Amount

Initial Dealer Fee

Vehicle (Deposit and licensing etc.)
Home Office Equipment & Software
Tools & Equipment
Computer System and Design Software
Opening Inventory
Opening Advertising

$40,000
$2,000
$2,000
$3,500
$3,000
$10,000
$2,000
Total

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$ 62,500