Why are franchise operations manuals important?
What is it?
In its simplest form, an operations manual is effectively the instruction manual for running a franchise business. It should include information and guidance on all aspects of what a franchisee needs to do in order to run their business as per the operational and branding guidelines of the franchisor.
What is the purpose?
The franchise agreement governs the franchise relationship between franchisee and franchisor. Once a franchise agreement is signed, it cannot be altered (without agreement from both parties) for the term of the agreement (typically at least 5 years in Australia). However, the operations manual can typically be changed at the discretion of the franchisor, depending on the terms of the franchise agreement.
Given this, the operations manual is a critical tool in influencing the behaviour and operations of the franchisee over time. It provides a franchisor with a level of control and ability to enforce desired behaviour and actions within the operation of a franchisee’s business, in order to uphold and protect the brand, but also provides the flexibility and freedom to be able to change and adapt the system to changing customer needs as well as new technologies and systems introduced to the franchise over the term of a franchise agreement.
The operations manual can be used as the basis for initial franchisee induction and training. As the operations manual covers all areas of running a franchise business it should therefore be an effective base to provide training to a franchisee. Using it as the basis for induction and training will also help the franchisee become familiar with the manual, increasing its use and effectiveness within the system.
For a franchisee, the operations manual should be the first point of reference in relation to the running of their business. Initially, a franchisee will use the operations manual on a daily basis, as they familiarise themselves with expected operations and practices. As the franchisee becomes more comfortable and proficient with the operations of the system, they will refer to the manual less frequently, but it should still be a key resource for them in running their business.
A best practice operations manual will cover the following topics:
- Customer service
- Products and services
- Human Resources
- Cleaning and maintenance
- Reporting and performance
In addition, the manual will need to cover any business specifics relating to a particular industry or sector (for example – food safety for a food retail business).
Typically, the content within each of these sections will be broken down into smaller policies, whereby franchisees can easily search and find relevant information.
Key development considerations
It is important that any operations manual is as easy to use as possible. Having a comprehensive, detailed operations manual is pointless if it is never used by franchisees! Making it easy to use and understand means:
- Using easy to understand language. No one likes reading legal documents, and franchisees will be less inclined to use a document they find hard to read. The language should be as simple as possible, whilst still remaining authoritative enough to ensure franchisees comply where relevant.
- A user friendly layout and design. Being able to find specific information easily (through indexing and search functions etc) – if a franchisee is unable to find the relevant information they are after, the manual will be of no use.
- Ease of update – documents can be updated in real time, as changes are made.
- Interactivity and engagement – Electronic format allows franchisors to include interactive and engaging content such as videos and online training modules.
While many franchises provide the traditional ‘hard copy’ manuals to franchisees, an increasing number of franchisors are providing operations manual content electronically. This involves the use of an internal or cloud based content management system that can be used to store all relevant documentation, policies and forms online.
In summary, an effective operations manual will form the backbone of franchisee operations, and can go a long way to ensuring the success or otherwise of a franchise system. A robust and comprehensive operations manual will provide an excellent return on investment through more improved and aligned franchisee performance.