THE FRANCHISE OPERATIONS MANUAL: A COMPREHENSIVE OVERVIEW OF ITS CONTENT AND IMPORTANCE

A franchise operations manual is the DNA of a franchise system – the foundation that governs franchise unit performance, procedures and conduct. It sets out in detail the specifications, standards, and procedures with which franchisees must comply in order to operate their franchised businesses and consistently deliver on the franchisor’s brand promise.

NOT ONE, MANY

Instead of taking the form of one all-inclusive document, franchisees are usually provided with a suite of manuals.

Franchisors also typically specify in their franchise agreements that their manuals may take the form of e-mails, letters, leaflets or any other document or medium identified by the franchisor as constituting part of “the manual.” In this way, franchisors are not pigeonholed into requiring their franchisees to abide by the specifications, standards and procedures that appear in the manual at the onset of the franchise relationship. Instead, franchisors are given broad leeway to continuously update, modify and revise the manual to reflect changes in the franchisor’s system.

• Franchise operations manuals are essential to franchisors because they ensure uniformity of customer experience and quality control across locations, act as a training tool for new franchisees, and serve as demonstrable evidence that the franchisee is an independent contractor in the face of a claim against the franchisor that it is liable for franchisees’ errors.
• Franchise operations manuals are an invaluable resource for franchisees because they serve as the franchisee’s daily reference tool, empowering the franchisee with all requisite knowledge to run the franchised business while simultaneously reducing the influx of emergent questions that the franchisor needs to answer.

THE CONTENTS OF A FRANCHISE OPERATIONS MANUAL

Credit: System 100

Franchise operations manuals vary in length and content. Generally speaking, a well-prepared franchise operations manual will address at least the following five categories:

1. The franchise system’s goals;
2. The day-to-day procedures the franchisee must follow in order to ensure uniformity of customer experience across all units in the franchise system;
3. Payroll and accounting; and accounting;
4. Customer service, including topics such as greeting customers and dealing with complaints; and
5. Personnel topics, including training.

The precise topics covered in a franchise operations manual are often dependent on the type of business being franchised. For example:

• The manual for a franchised restaurant will often detail mandated menu items, food safety and sanitation requirements, proprietary recipes, procedures governing back-of-house and front-of-house conduct, specific management tools and software requirements, and marketing guidelines.
• A franchised hotel’s manual may contain specifications regarding guest experience (guest relations, laundry & valet service, etc.); welcome and farewell experience (guest arrival, bell service, parking, etc.); administration (advertising, website and trademark standards, social media, sales, insurance requirements, etc.); food and beverage experience (rules of operation, in-room dining, bar/lounge experience, etc.); guestroom and bathroom experience (bathroom amenities, in-room entertainment, in-room safes, etc.); recreation experience (spa experience, fitness center experience, etc.); safety and security (guestroom security, lost and found, fire safety systems, etc.); and technology (high-speed internet access, telephone service vendors, and television standards, etc.).

Likewise, the manuals for other types of franchised businesses will address topics specifically tailored to the type of business being franchised.

WRITING A FRANCHISE OPERATIONS MANUAL

Wordsmithing existing documentation into readable franchise operations manuals is a daunting task. Some franchisors may be able to prepare their own manuals using the tables of contents in other franchisors’ manuals as a guide to determining what topics to include. But due to the great importance of the manual, and the challenges that most franchisors face in writing their own manuals, franchise consultants are often engaged for this purpose.

As the leading franchise consultant in Asia, VF Franchise Consulting has helped many businesses expand overseas.

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By David J. Kaufmann, Senior Partner, Kaufmann Gildin & Robbins LLP