1. business and industrial

Resale Franchise Name
BUSINESS PLAN
Owner
Name
Phone
Prepared by: Business Plan Mentor
EXECUTIVE SUMMARY
RESALE FRANCHISE children’s and maternity clothing exchange will provide customers an
opportunity to “trade” and purchase previously used, but excellent quality, apparel, baby
furniture, and toys.
While resale and thrift shops are plentiful in the Fox River Valley area (proposed location), there
currently are no RESALE FRANCHISE stores in the immediate area. RESALE FRANCHISE will
thrive here due to the ongoing popularity and demand for these types of resale venues. The
difference in the RESALE FRANCHISE concept of credit allowances (interchangeable with cash)
for a customer’s items will be very much appreciated due to the flexibility and more generous
spending allowance this will afford the customer. Most similar stores offer consignment or cashonly in return for a customer’s goods.
Another very important difference that distinguishes RESALE FRANCHISE from resale or thrift
shops is the look and ambience of the store itself. RESALE FRANCHISE stores are designed to
look and feel just like a full-priced children’s clothing store. They are exceptionally clean,
colorful and brightly lit. The store also offers a children’s play area so the kids are happily kept
busy and moms are more apt to spend more time in the facility. This naturally translates to more
sales and more frequent visits.
The target market includes local families in need of high quality, lightly worn children’s
merchandise (and maternity clothes) at substantially lower prices. This market group in this
location is sizeable as the city of Anytown is very densely populated.
Because of our unique concept, customers will be especially thrilled to have something new and
exciting to choose from when it comes to resale shopping. We offer an alternative shopping
experience that is certain to capture the public’s interest and generate healthy sales.
The business will be owned and managed by Ms. Franchisee contributing her own
capital of $62,000 that will cover all start up costs and the franchise license.
Business History
RESALE FRANCHISE has been in business since 1979 with 14 franchises currently operating in
the US. These franchises boast long running, profitable businesses. RESALE FRANCHISE is
headquartered in Another Anytown, USA under the direction of its owners Mr. and Mrs.
Franchisor.
The franchisor’s buying power allows the franchisees access to vendors for varying needs such as
insurance, fixtures, merchandise and equipment at reasonable costs.
Growth and Financial Objectives
The first year goal is to garner from 6 to 14 sales per day at an average of $25 per sale. Growth to
14 sales per day by end of year one will be a realistic goal as the shop will be open 7 days per
week with hours of operation from 10 hrs per day weekdays and 8 hours per day on weekends.
Fourteen sales per day translate to 1.4 sales per hour, a fully attainable number. Subsequent
growth is projected at 50% for year two and 17% for year three. Sales are expected to jump year
two due to word of mouth and print advertising and market infiltration.
ANTICIPATED SALES YR 1
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$1
2
3
4
5
6
7
8
9
10
11
12
TRANSACTIONS
GROWTH POTENTIAL YR 1
450
400
350
300
250
200
150
100
50
0
1
2
3
4
5
6
7
8
9
10
MONTH
ANTICIPATED INCOME YRS 1 - 3
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
1
2
3
11
12
Legal Structure and Ownership
This business will flourish under the management of the owner as an S Corp. This type of
business is ideally suited for one owner.
Ms. Franchisee intends to employ her adult daughter full time along with a part time employee
during the start up months. Ms. Franchisee will remain at her current place of employment until
RESALE FRANCHISE is able to sustain business and personal expenses. She will actively
participate in the running of the daily business affairs each evening and weekend and will be
available anytime as needs arise. Once the business is bringing in healthy sales, she will be
working at the shop 7 days per week. Additional staff will be employed as needed.
Location and Facilities
This type of business would be ideally suited to a retail strip mall with much year round foot
traffic. Ideally the location would be within walking distance from other mom friendly shops
and/or discount department stores. Two thousand to three thousand square feet will be required
to comfortably accommodate the shop.
RESALE FRANCHISE facilities are known for their cheerful, colorful, clean stores. A play area
for children will be made available for the convenience of the moms and dads that will make up
our customer base. This feature will encourage parents to shop for longer periods of time which
in turn means higher sales and more frequent shopping trips.
Our proposed location at the Towne and Country strip mall on South Main Street in Anytown,
USA meets the criteria that would make for an ideal location. This strip mall currently holds a
full sized grocery store, a large indoor flea market, a new coin operated laundromat, a video
rental store, a Dollar discount store, several restaurants and many more shops.
Most of these existing stores already attract families (particularly moms with kids) so RESALE
FRANCHISE would be an ideal fit. The parking is also ideal with parking immediately in front of
the shop which makes dropping off of merchandise by mothers with kids in tow extremely
convenient.
Financial Status
Owner equity contribution would be provided through personal savings, retirement funds and a
home equity loan. The license fee and additional start up costs such as advertising, equipment,
inventory, insurance, legal fees and working capital make up the initial estimated expenses.
Thereafter expenses are limited primarily to ongoing advertising, nominal royalties due to the
franchisor, utilities, rent, inventory and payroll.
BREAK EVEN ANALYSIS
EXPENSES
Rent
Inventory
Office Supplies
Telephone
Advertising
Bank Fees
Insurance
Utilities
Travel/Entertainment
Taxes
Legal/Accounting
Payroll
Payroll Taxes
Royalties
Owners Withdrawl
Total Expenses
Contributution Margin per unit
Monthly unit sales at break even
Monthly sales dollars at break
even
$
3,000.00
$
720.00
$
50.00
$
200.00
$
500.00
$
60.00
$
140.00
$
300.00
$
$
609.00
$
500.00
$
1,600.00
$
500.00
$
252.00
$
$
8,431.00
$
25.00
$
336.00
$
8,400.00
BREAK EVEN
$12,000
$10,000
$8,000
SALES
$6,000
$4,000
SALES
$2,000
PROFIT/LOSS
$0
-$2,000
1
2
3
4
5
6
7
8
9
10
11
12
-$4,000
-$6,000
MONTH
Owner's Background
Ms. Franchisee brings to the business a background that includes ten years experience in
accounting/financial positions. For six years she worked at Corporation XYZ, most recently in
the finance area of the Engineering department handling capital and expense budgets in excess of
$200 million per year. This background will prove helpful in tracking the RESALE FRANCHISE
financial status. Her accounting background includes several years as an accounts payable and
payroll manager. This experience will prove invaluable in helping to run the day to day business
transactions inherent to a retail operation.
Market Analysis
The concept of an RESALE FRANCHISE children’s and maternity exchange store will be in great
demand in our area. While the resale and thrift business in the Fox River Valley area is
competitive, the market is sorely in need of something fresh and exciting. The market will be
wide open to accommodate such a business for the mere fact that there is no other such resale
store offering the credit/exchange model in this area.
Industry Analysis
While the economy will no doubt continue to experience fluctuation, its ebbs and flows will
largely leave the resale industry undisturbed and in fact a weaker economy may draw more
customers from all income levels. Admittedly, a weak economy may influence the customer’s
decision to purchase high priced clothing and furniture, but they certainly will be drawn to the
idea of once higher priced, quality clothing at drastically reduced prices.
Target Market
The target market for such a business is quite large as the public will delight in RESALE
FRANCHISE’ fresh design and concept. Cost conscious families shopping for previously used,
excellent quality apparel and furniture will be the intended target market.
Customer Profile
The latest census statistics shows the city of Anytown as being densely populated with over
90,000 people. Families make up 70% of that number with median household income at $58,000
per year. RESALE FRANCHISE will attract families from a diverse demographic as cost
conscience parents exist at all levels. Those families earning higher than average incomes will be
attracted to RESALE FRANCHISE for it’s newer, clean, bright atmosphere, and quality
merchandise, whereas those earning below the median average will frequent the store for its low
prices.
The neighborhood immediately surrounding the proposed location is made up of middle, and
lower income families with upper-middle income families residing within a 10 mile radius. Older
neighborhoods mix in with new housing and much apartment type housing. This diversity will
certainly be a big plus for this business.
These statistics confirm the marketability of an RESALE FRANCHISE retail venue in this
location.
Major Competitors
Competitors include existing resale and thrift shops. Locally this includes a Different Franchise
Resale in Anytown2 located several miles from our proposed location in Anytown. Although this
resale shop is part of a very popular franchise, the store itself is not at all welcoming. It is dark
and dingy looking. The children’s play area looked shabby and dirty.
A community thrift store in Anytown3 and a children’s resale shop, Kids to Kids across the street
from the thrift shop are located about 10 miles away. The thrift shop is typically a shambles and
they accept virtually anything whether in working order or not, dirty, unviable and unusable. The
Kids to Kids shop is also unkempt and dull looking.
A resale shop is also located about 4 miles away in neighboring South Anytown. Parking is not at
all convenient and it is located on a busy street.
With this caliber of “competition” RESALE FRANCHISE will be a most welcome alternative and
should draw customers from miles away.
Competitive Comparisons
Differences between RESALE FRANCHISE and area resale/thrift shops will be immediately
evident.
Most resale stores in the immediate and outlaying areas suffer the typical old, worn, shabby feel
and reputation of most such venues. RESALE FRANCHISE deliberately sets out to create a
welcoming, inviting, comfortable, fun feel by setting up shop with bright new counters, floors,
fixtures and lighting. The merchandise itself contributes to this ambience by accepting only the
best of apparel and furniture. High quality in both merchandise and decor is of utmost
importance and will create the look and feel that will bring a customer back for repeat business
Additionally the credit/exchange concept sets us apart from the rest. Customers will appreciate
the option of taking store credit in exchange for their merchandise along with cash. They can use
a combination of credit and cash if this is their preference. Other resale/thrift shops accept
merchandise on consignment only (the customer will receive a nominal payment only if their
items sells) or cash only. These options force the shop to issue very small compensation and
resell at unnecessarily high prices.
Product Pricing Strategy
(To be modeled after franchise pricing.)
Product Positioning
Advertising will be employed through the following mediums:
 Print advertising through prominent placement in yellow pages phone books.
 A company web site will be utilized to attract customers' attention and generate sales
through a wider geographical area.

An aggressive and extensive use of press releases to be sent to all local newspapers will
be utilized to jump start the business.

Local cable television advertising will be possible by taking advantage of free community
bulletin boards.
Financial Plan and Analysis
Initial Capital Requirements
The initial start up capital requirements are expected to be approximately $62,000. This amount
covers the franchise license fee, rent, advertising, real estate improvements, signage, utilities,
insurance, equipment and inventory. Operating capital will be available for start up.
After the initial start up costs, monthly expenses will include a nominal royalty fee of 3% of sales
due to the franchisor, utilities, advertising, rent and payroll expenses.
ESTIMATED START UP CAPITAL ONE TIME
COSTS
Franchise fee
$
15,000.00
Equipment
$
13,800.00
Real Estate Improvements
$
6,000.00
Training
$
1,300.00
Utilities
$
200.00
Professional fees/permits
$
1,000.00
Inventory
$
10,200.00
Rent
$
2,500.00
Insurance
$
900.00
Advertising
$
1,000.00
Operating Capital
$
10,000.00
Total Estimated Start Up
$
61,900.00
Projected Cash Flow Statement
Yr 1
CASH
Beginning Cash
Cash Sales
MO 1
MO 2
MO 3
MO 4
MO 5
MO 6
MO 7
MO 8
MO 9
MO 10
MO 11
MO 12
$11,000
$11,917
$4,000
$5,300
$12,050
$7,349
$6,818
$6,115
$6,428
$6,301
$6,725
$7,296
$8,887
$10,193
$5,800
$6,500
$6,500
$8,400
$8,000
$8,000
$9,000
$9,000
$9,000
$9,000
$15,000
$17,217
$17,850
$13,849
$13,318
$14,515
$14,428
$14,301
$15,725
$16,296
$17,887
$19,193
Other Cash
Loan (operations)
TOTAL CASH
CASH PAID OUT
Rent
$0
$0
$3,000
$3,000
$3,000
$3,000
$3,000
$3,000
$3,000
$3,000
$3,000
$3,000
$840
$1,600
$1,500
$1,200
$720
$720
$1,000
$750
$1,500
$380
$365
$275
$0
$5
$5
$10
$20
$20
$20
$20
$20
$20
$20
$20
Telephone
$150
$150
$150
$150
$150
$200
$200
$200
$200
$200
$200
$200
Advertising
$140
$20
$0
$0
$160
$500
$500
$200
$200
$200
$0
$200
Bank Fees
$0
$50
$50
$50
$50
$60
$60
$60
$60
$60
$60
$60
Insurance
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
$140
Utilities
$200
$200
$300
$250
$300
$300
$300
$300
$300
$400
$400
$400
$0
$0
$0
$0
$0
$500
$0
$0
$0
$0
$0
$0
Payroll
Payroll Taxes Fed
Withh
$930
$1,900
$2,250
$1,200
$1,600
$1,600
$1,600
$1,600
$1,600
$1,600
$1,600
$1,600
$167
$342
$405
$216
$288
$288
$288
$288
$288
$288
$288
$288
Payroll Tax Match
$50
$103
$122
$65
$86
$86
$86
$86
$86
$86
$86
$86
$290
$384
$421
$471
$471
$609
$580
$580
$653
$653
$653
$653
Unemploymnt Tax
$28
$57
$68
$48
$64
$64
$64
$64
$64
$64
$64
$64
State Withh Tax
$28
$57
$68
$36
$48
$48
$48
$48
$48
$48
$48
$48
$120
$159
$174
$195
$195
$252
$240
$240
$270
$270
$270
$270
Misc exp
$0
$0
$1,850
$0
$0
$0
$0
$0
$0
$0
$0
$0
Owner's Withdrawl
Total Business
Expenses
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$500
$2,200
$3,083
$5,167
$10,501
$7,031
$7,203
$8,087
$8,126
$7,576
$8,429
$7,409
$7,694
$9,504
CASH AVAILABLE
$11,917
$12,050
$7,349
$6,818
$6,115
$6,428
$6,301
$6,725
$7,296
$8,887
$10,193
$9,689
Inventory
Office Supplies
Legal/Accounting
Sales Tax
*Royalties