In financing any business the business owner must have a clear financial plan. A clear financial plan provides invaluable help in keeping a business focused and generating a profit. Without a financial plan it is impossible to know how the business is performing.
In the Denny's franchise agreement a potential franchisee must have a minimum net worh of €800,000 of which €250,000 must be cash. Denny's insist on a clear financial plan so that they are satisfied that the potential franchisee is competent in terms of financial ability to build a business.
Our business plan provides a detailed outline of our vision for operating a Denny's franchise. Based upon our research, the following is a realistic forcast of our business. Our investment - €200,000 (an investment of €50,000 cash each) AIB bank overdraft - €100,000. (This will assist us with our initial cash flow). Bank debenture - €600,000.
Equipment leasing. - €360,000. (60 monthly payments of €6,000)
As Denny's is an American franchise all their guidelines are in American Dollars. I have used a flat exchange rate between the € and $ for my cash flow forecasts. this allows clarity for the reader. (1$ = €1)
Set up Cost.
Franchise fee - €40,000.
Machinery - €25,000 (AC System)
Office, Furniture and Equipment - €8,000 (Manager office and staff room) Computer Equipment - €35,000 (POS system, Back office system) Restaurant Area Fittings - €150,000 (Tables & Chairs for customer area) Lighting - €44,000 (Kithen & Restaurant area)
Fire and Safety - €8,000 (Signage, Fire extinguishers and Fire blankets.) Security - €22,000 (CCTV)
WC - €18,000 (Ladies, Gents and Disabled Facilities)
TOTAL - €350,000
Leasing - €6000 per month (Food prep facilities, servicing included) 5 year plan.
This fee refers to the Denny's franchise agreement; 4% of sales contribution to the advertising fund. As we will be...