Preparing a Franchise Operations Manual

Preparing a Franchise Operations Manual

Next to the franchise agreement a comprehensive and well-structured Operations Manual is the key ‘must have’ document of a franchise system. A franchise is all about the transfer of knowledge and experience to capable, self-motivated people so that they’re able to successfully replicate an established and proven business model. The Operations Manual therefore should be the ‘bible’ – it has to detail every aspect of how to run the business in such a way that someone who hasn’t run the business could refer to it and be able to do so.

Quite often a franchise Operations Manual will comprise a series of manuals – technical, administration, sales & marketing, health & safety etc. This may be simply for reasons of practicality but it does allow for emphasis to be placed on the primary business drivers.

A manual is good for franchisee and franchisor

Despite being such an important document it will almost certainly be the case that few franchisees will actually read the Operations Manual more than once, which will be when they’re being trained. Which is not surprising – after all, how often do any of us study the manual of new TV or car from cover to cover?

The fact is that the Operations manual is as much of a benefit to franchisor as it is to a franchisee. Here’s why:

  1. It systemises the business

If you expect franchisees to replicate your business then it must be ‘packaged’ into systems, with clear structure, that can be effectively copied. Every process must be carefully explained in unambiguous language and broken down into easy to follow  steps. Mapping out your business in such detail can be quite a cathartic exercise – it focuses the mind on specifying the practical actions that are proven to work and that you want your franchisees to take when operating the business you’ve created, using your brand and reputation.

In fact, it’s not unusual for business owners to identify ways of improving the business further as a result of the forensic examination involved in the preparation of an Operations manual.

  1. It reinforces the training

By documenting each of the various processes and procedures that are fundamental to the operation and development of the business you will also be defining the content of the training that a franchisee will require. The manual should be used as a reference source throughout the training course. I tend to issue the relevant section to the trainee franchisees as each training module is delivered, so the Manual builds as the course progresses.

  1. It supports the franchise agreement

A franchise Operations Manual must aim to provide operational guidance. It is not a legal document, however it will usually be constructed to support the franchise agreement by cross referencing requirements that might change during the term of the agreement to accommodate market conditions and evolving business strategies. For example, prices. The franchise agreement may make clear that a pricing policy must be observed but point to the specific maximum prices published in the Operations manual, which may be changed from time to time.

An Operations manual is therefore a ‘live’ document that should be regularly updated as the business grows so that the best current practice and guidance is provided. If designed and written correctly, the Operations Manual will be an integral part of the franchise agreement – the standards and procedures contained within will be as good as a clause in your agreement.

  1. It helps impose discipline and control

One of the consequences of franchising is that you release some control over your business. You won’t be responsible for the day to day running of the business in each locality, with the significant benefit of the reduced operational cost this offers, but as result you not in quite the same position to dictate. However, when in conjunction with a robust reporting and auditing processes a good Operations Manual will enable you to still exert effective control over the activities of your franchisees. Their actions, behaviour and performance will be measured against the procedures and practices described in the Manual.

  1. It adds strength to the value of the franchise

By spending the time to prepare a Franchise Operations Manual that comprehensively covers all business operations you are making a statement about the values of your business and your commitment to ensuring it is run in an efficient, professional manner that delivers a consistent standard of service. In effect it maps out the philosophy and style that have contributed to the success of the business.

For all of the above reasons a Franchise Operations manual must be prepared as an original document. Usually businesses that are in the process of franchising will have a business operations manual(s), or written policies and procedures that they think will be quite suitable as a franchise Operations Manual. It’s certainly a big help, but rarely does it meet the requirements. To franchise work will need to be done on adapting and expanding so that it act as a reliable, authoritative ‘bible’ about each and every process of the business.

Make it your manual

It’s also important that the Franchise Operations manual is written for the business, and not simply a standard, generic template with a ‘copy and paste’ job done to exchange your company name with another. There will always be some aspects that are common to all businesses but it is vital that time and effort is put into compiling a manual that is specific to your franchise.

Tips for creating a manual

When it comes to writing a Franchise Operations manual here are some tips that might come in useful:

  • Use clear, unambiguous language. Try not to use ‘techno-babble’.
  • Divide the manual into sections that reflect the broad components of the business e.g. staffing, inventory and stock control, insurances, call handling, work scheduling, financial management, customer service, invoicing, marketing etc.
  • Make sure you use common word processing software to create the manual
  • Use flow-charts as much as possible – graphics tend to be more use-friendly than text
  • Number the sections and then the pages within sections. For example, page 5 of section 8 would be 8.5.
  • On each page include a footer that includes the date the page was last modified.
  • Ensure that an update record is integrated at the beginning of the manual.
  • Make it interactive and searchable – available via a CD Rom or online. There is now no need to print a manual, it’s much easier and secure to publish electronically, and also easier to update. Furthermore, an electronic manual is far more likely to be used by franchisees.

You will know all there is about your business and so the content of the Franchise Operations manual will have to come from you and your team. But you may not be the best person to create it. An experienced franchise manual writer will understand the best format and style and importantly will ensure that it integrates correctly with the franchise agreement. You also may not have the time needed to undertake this important task.