Guide to writing a Restaurant Business Plan

If you're considering opening up a new restaurant, you'll need to write a high-quality business plan if you're to attract investment and ensure you're sufficiently prepared. Fortunately, this process is considerably easier with franchising. This is because an experienced franchisor is on hand to help you draft the document and include all the necessary facts and figures. However, there's still a little work to be done. Here, we take a look at what it takes to create a restaurant business plan for your new franchise.

What is a franchise business plan?

A franchise business plan is an account of how you believe your business will achieve success. It includes research into the market you're entering, discloses how much you profit you expect to make and explains how you expect to make it. The business plan is an essential part of any finance application. If you need to borrow to set up your business, you'll have to submit a comprehensive business plan that’s capable of convincing the lender that your venture has a reasonable chance of success.

However, business plans also help you determine whether the business is going to turn a decent profit. Until you take a good, hard look at the market realities and crunch the numbers, you can’t know whether it’s all going to work out. A business plan allows you to make an informed investment decision and gives you something to work towards if you do choose to go ahead with the venture.

>> Read more:

• How to Develop a Franchise Business Plan
• Franchise Business Plan - 3 Reasons Why It Is So Important To Franchisees
• What to include in your franchise business plan

Guide to writing a restaurant business plan

To draft a comprehensive business plan, you'll need to perform research in different areas. Various sources will often suggest that a business plan should contain different sub-headings and sections, and we’ve created a basic list below.

Restaurant business plan sample

1. Introduction. The introduction should aim to provide a quick summary of what the business is, what it’s going to do, and what market it will operate in. This doesn’t need to be long or overly complex, as you’ll expand on everything later in the plan.
2. Product or service. In the second section, you’ll describe and detail the products and services your business is going to offer. In the restaurant industry, this is likely to be a specific type of food, such as Italian cuisine or takeaway sandwiches. However, all restaurants also offer a service too. It’s a good idea to mention what kind of service you want your employees to provide and what kind of relationship with customers you want to develop. Do you want to keep it relaxed, light-hearted and jokey? Or does your business want to lean towards the greater gravitas provided by formal customer service?
3. Management. This section will explain the management structure you intend to adopt, and which individuals will occupy certain management roles. It may be that you’re going it alone and you’ll be the only one in a management position. On the other hand, you may have a partner or be bringing in others to help with franchise management. Either way, it’s important that you detail the experience and qualifications that make each management figure suitable for the job. Many investors choose to invest in a restaurant for more reasons than it simply being a money-making scheme. Therefore, you could give some context of what the management team values outside of the work environment. If you’re going it alone, try to get across who you are as a person; what you enjoy, what’s important to you, your history etc.
4. Market analysis. This involves performing extensive research into your future business' market and industry. You'll need to look at how big the market is, who the largest competitors are, how you're going to distinguish yourself from the competition and what the future holds for the market. Knowing what challenges and opportunities lie ahead is key to understanding whether or not your business has a good chance of success, so it's necessary to dedicate considerable resources to this aspect of the research. Look into your area’s micro and macro market conditions. At a macro level, you can look at the local and regional economy. In this part of the business plan, you can explain how your restaurant will thrive even when others don’t. Or how your business will still boom if there is already a string of successful restaurants in the area. At a micro level, you can refer to who you are in competition with and how you will make your offering unique enough to appeal to your target audience.
5. Target Market. You may have referred to this another section, but to make it really clear to investors you could dedicate a whole section to who is going to dine at your restaurant. Explain why your restaurant will appeal to your target audience, and draw on their occupation, age and income to clarify it.
6. Marketing. In this section, you'll explain how you plan to attract customers and develop your brand. You'll need to establish where you're likely to focus your advertising efforts, what will make your brand stand out compared to others and how you’re going to develop and retain a loyal following. The restaurant industry is competitive; with it always seeming like a new restaurant is opening up or being refurbished in your local area. Therefore, you need to have a well thought through pre- and post-launch day marketing plan. This is important to prove to investors that you will gain plenty of interest before opening day and keep the momentum going. Make it clear which social media platforms you will be present on, details about your website and any connections you have made with a local newspaper or radio station. If you have decided to hire a PR/marketing company, then make this clear here and explain why you have chosen them.
7. Financial forecasts. The financial forecast section is often described as the most crucial part of the business plan. This is primarily because it contains the financial projections that establish how profitable your business is likely to be and whether lenders can expect to get their money back. It will include profit and sales forecasts, as well as a detailed breakdown of how these figures were reached. Finally, it will provide a predicted repayment schedule for any money borrowed to finance the restaurant.
8. Financial demands. The final section establishes the amount of capital that you’ll need to get the business off the ground and turning a profit. This will include how much personal investment you’re making, how much you’ll need to borrow and what start-up costs there will be. With both this and the previous section, you’ll be able to request help from the franchisor. Though there are some legal restrictions on what claims they can make about expected profits, the franchisor will be able to provide you with figures that help you complete both of these sections.

Business plan examples restaurant

Though not necessary, a restaurant business plan often includes a number of other elements…

Sample Menu

For instance, many include a sample menu. This should be designed as if it were to be presented to a customer, as this gives you the opportunity to integrate your logo and brand identity, as well as allowing you to price items.

Location

Location will also feature heavily in a restaurant business plan. If you’re aiming to reach a particular demographic, you’ll need to ensure that this type of customer can easily access the restaurant.

Design

You might choose to incorporate some visuals into your restaurant business plan. A good way of doing this is making a mood board that gives more of an idea of the restaurant’s design. This will help create a sense of how it will feel when you first enter and whilst dining. For instance, are you going to create a quirky, inner-city restaurant filled with patterned wallpapers and artwork? This might create a space where students or creatives can come to feel inspired whilst they eat. Or are you going to create an American diner-style restaurant aimed at families, which has the signature checked floor and red booths? Either way, mood boards are a great way to help investors visualise how the restaurant will look.

Specialists

Finally, a restaurant business plan will also often include a list of other specialists you're likely to employ. In fine-dining contexts, the most important figure will be the chef. Who are you going to hire as the head of the kitchen? However, you'll also need to consider whether someone is going to assist with PR, marketing and roles such as interior design. In all cases, you should explain what makes the chosen individual suitable for the position.