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Operations Manual Basics For Future Franchisors

April 23, 2010

by FranchiseKing from the community

Making the decision to franchise your business should not be taken lightly. Not only will you be investing a sizeable amount of money, but you’ll have to provide a blueprint of how your business runs to your franchisees. That’s going to take a bit of time.

I’m sure that you’re excited to start, because you read somewhere that “great wealth has been created by a multitude of business owners who have used franchising as their growth vehicle.” 

Before you get to the “wealth creation” part, you must write a powerful operations manual. This manual has to be your best work. It will be the foundation of your franchise, and you’ll have to live it and breathe it in order to ensure your success (as well as the success of your franchisees.) 

Your franchise operations manual will list the agreed upon standards and procedures for your franchise, and will include the recipe for your secret sauce, which is all of your proprietary information. 

The Patent & Trademark Office has some great information about protecting your proprietary information.  

Does that last sentence instill a little fear in you? It should. You’ll be giving up your secrets. All of your franchisees will know how to copy your business model, from A to Z.  You’re giving up some control by giving away your secrets, while at the same time you’re putting systems in place so that you can maintain a high level of control of the folks that you’re allowing to enter the system as franchisees. 

Besides your proprietary information, there are five basic things that a franchise operations manual must contain. these are: 

  • The Introduction-Included in this section will be a bit of company history and a company’s short and long-term goals, along with some information on how the franchisor plans to support its franchisees.
  • Operations- This is the step-by-step procedure area. If it’s a food franchise, portion sizes, food preparation processes, and order times may be included. If it’s a business-to-business type of franchise, specific lead acquisition methodology and sales procedures will be included in this portion of the operations manual. A section on marketing will usually be found in this section too.
  • Payroll and Accounting-This section will explain specific accounting procedures that you’ll have to follow to run a profitable business. There will also be an explanation of hiring and firing procedures, along with suggested employee pay scales, and possibly some information concerning labor laws.
  • Customer Service-This portion of the franchise operations manual lays out specific customer service policies and procedures. Everything from how to greet your customers to specific ways to handle customer complaints will be included here.
  • Personnel-This section will provide all the information you’ll need to train your employees. Job descriptions and even sections on employee motivation will be found in this section.

Franchise operations manuals are a vital part of the business model of franchising. Here’s how important they are, according to Mark Siebert, the CEO of the iFranchise Group, who wrote this in Entrepreneur magazine; 

“Operations manuals and training programs can seem to have little immediate relevance to long-term success. But they are vital for brand maintenance and liability protection. One well-known franchisor lost millions in a food-borne illness lawsuit because its operations manual did not contain the appropriate language. Another franchisor lost a lawsuit because it was overly prescriptive when discussing the type of drop safe that the franchisee was required to use. And on the flip side, a third franchisor saved itself from protracted litigation in a sexual harassment suit brought against a franchisee when it demonstrated that it had thoroughly documented and trained that franchisee on the bounds of acceptable behavior.”

A properly written franchise operations manual will go a long way towards your long term success as a franchisor.

 (The Franchise King ®, Joel Libava, is president of Franchise Selection Specialists Inc. Joel helps those interested in exploring franchise ownership all over the country find great opportunities that are a great match for them. He is frequently called on by the media for his no-spin insights on the world of franchising. Joel is also deeply entrenched in social media.

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