Successful franchising is directly correlated to the ability to teach processes, replicate business units and leverage systems to show a franchisee how to operate their business. This process of duplication starts with having great franchise operations and operating documentation in place.
The operations manual is the centerpiece of any solid franchise brand. It is truly the epitome of what makes a franchise concept valuable to the franchisee.
When launching a new franchise system, the operations manual must be a priority and needs the time, effort and focus in order to have a franchise program that offers value.
What makes a good operations manual and how should a manual be structured to best franchise my business?
The manual needs to have a layout and structure that is clear, concise and understandable for the reader.
1. The manual should flow in a way that takes the reader through the logical steps of establishing their business. We recommend the initial part of the manual should focus on introducing the relationship to the franchisor and how the franchisee should expect to interact with the franchisor.
Document the resources available to the franchisee in this section and make it clear how you would like to work with them during the term of the franchise engagement.
Have you heard the term “good fences make good neighbours”? This section sets the tone and helps the franchisee how you want to be dealt with and how they can get the most out of this relationship.
2. The first sections should then take the franchisee into establishing the business and the particulars around opening the business successfully. Elements such as how to negotiate the lease, finding the ideal location, getting insurance, hiring staff and setting up accounting processes would be the focuses of these sections.
The more specific and detailed these sections are the better off you as the franchisor will be. Franchisees not only want and need detail, but legally, as the franchisor, you want your operations manual to have specific information as this document does have legal ramifications for you. We recommend having your attorney review the manual before it is put into practice.
3. As the manual transitions into the operating protocol, we start with the basics. Administrative management, bookkeeping, setting up payroll processing and managing the backend of the business.
If your franchise offers technology or outsourced services as part of the franchise relationship, this section will describe how franchisees should work with these tools and understand how to extract value from them. For example, CRM management, accounting software or loyalty marketing programs.
Accounting and bookkeeping should encompass a significant portion of this section of the franchise operations manual.
4. We then take the franchisee into employment practices and understand how to build your team within the franchise brand. Obvious details should include laws regulating employment, OSHA requirements, fair labour standards, insurance requirements and job descriptions, but you should be extremely careful with how to document this section in order to avoid your being considered a joint employer of the franchisee’s staff by the National Labor Relations Board.
This has been a particularly hot topic in the franchise community with McDonald’s being in the spotlight as of late We recommend including several disclaimers throughout the document to make this point clear that you are not in control of how they manage their employees, a good franchise attorney will have the language to wrap into your operations manual to address this.
5. The manual should then go into marketing and business development. This portion of the operations manual should explicitly address all aspects of marketing the business and the direction for how best to build a customer base.
The marketing portion should start with strategy and metrics related to effective customer acquisition. Good numbers go a long way in this portion of the operations manual and should lay out the numbers based on your experience.
For example, we need X leads to get 1 consultation and based on our experience, it takes Y consultations to close one sale. Our average cost per lead is $25, so your typical sale should be a total cost of $Z dollars.
We also recommend including examples of all forms, business cards, brochures, marketing materials and collateral that is available to them on a private franchise intranet. The Franchise Intranet is a private log-in for franchisees where all forms, digital files and documentation can be downloaded and accessed by the franchisee.
Franchising your business demands good systems and documentation, your operations manual is critical in being able to develop your brand through the franchise channel. For more information on how to write your franchise information manual, contact us.
FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.