Franchise Operations Manual

A sick Operations Manual is usually a reflection of a sick franchise system and urgent surgery is required in most cases!
 
In my many years as a franchise consultant, I have witnessed an enormous jump in standards when it comes to the Operations Manuals that Franchisors are providing for their Franchisees. Long gone are the days when a twenty page manual with a few ambiguous, and supposedly motivational comments, would suffice for a Franchisor to legitimately say to franchise prospects that the system had such a manual. Franchisees took that on face value, only to be bitterly disappointed upon receiving their copy, which usually gave them little or no advice on how to run their new business. Sadly, this still happens today.
 
If this describes your current situation and manual today please read on, or face embarrassment and possibly even system failure.
 
Solicitors who read the Franchise Agreement that connected the Operations Manual to the System were also often lax in not insisting upon seeing that the document existed at all, and then failed to advise their client as to its contents and value. Sadly, this still happens today too!
 
Fortunately, today’s Franchisees rightfully demand a far more professional standard and solicitors are prepared to delve deeper on behalf of their clients to make sure the Operations Manual does indeed provide real value. After all, it is a large part of what a Franchisee pays a Franchise Fee for in the first place.
 
The first outcome from raising the bar was for Franchisors to recognise that they could not be experts on all things for their franchises. Most Franchisors could write some sort of reasonable physical operational guideline on how to bake the bagel, mend the dent or fix the filter for their system, but many aspects of the manual required the input of various experts, and across many fields. The solution was outsourcing sections, or the entire manual, to professional Operations Manual writers. For example, the old manuals never had sections on Human Resources, Occupational Health and Safety, Manual Handling or Food Safety Programmes and yet now all of these areas are vital ingredients of the “How to” book that a Franchisee can refer to everyday.
 
Computers and the internet were a boon for the Operations Manual too, with access being provided on line at the touch of a button for the busy Franchisee who was in store with an urgent customer query and an irate customer in front of them. The introduction of wireless connection for laptops has seen the Franchisee in the field also being able to instantly access important help and advice. These are now really minimum standards and expectations for franchise systems. Good manuals go further and are hyperlinked to avoid lengthy searches for relevant material as well as being properly indexed and referenced.
 
At Franchise Alliance we constantly remind our clients that an Operations Manual may help a Franchisee run their particular franchise but should also advise and guide a Franchisee on the obligations and solutions of running a small business in general terms. These two issues do overlap, but require many different areas of information to be provided.
 
We believe a Franchisor has an onus to include materials such as where to go to get tax or wage advice. We don’t recommend that the Franchisor takes on such a mantle but should certainly include in their manuals how to guide a Franchisee to get the right advice.  
 
GST, BAS returns, PAYG tax, hiring and firing staff, working out gross profits, margins and break evens, establishing a chart of accounts, even basic accident treatments should all be included in an Operations Manual and are, more frequently then not, completely omitted.
 
This is just not good enough in today’s complex business World.
 
Franchisees rightfully demand a far more professional standard and solicitors are prepared to delve deeper on behalf of their clients to make sure the Operations Manual does indeed provide real value. After all, it is a large part of what a Franchisee pays a Franchise Fee for in the first place.
 
All this information then produced the next phase of Operations Manual development. The plethora of data produced Operations Manuals of 400 pages or more that Franchisees couldn’t jump over and were so frightened of their volume that they chose never to open them at all! Operations Manuals everywhere were busy collecting dust and being totally counter productive to their original intention of providing instant answers. Franchisors couldn’t understand why Franchisees kept ringing them to provide answers to questions that were answered in the manual. Thankfully the age of digital photography dawned and two paths emerged.
 
Firstly, the introduction of colour and photographs at very little cost gave rise to manuals that were eye-catching, a pleasure to read and, more importantly, very easy to follow. Pictures of the hamburger on the grill at every stage of its cooking process left the Franchisee and their staff with no questions as to when to turn it over!
 
Training was dramatically enhanced by this development and a good Operations Manuals should always be written with Induction and Ongoing Training in mind.  In fact, the Training Officer within the system is the very best person to be charged with the responsibility of ensuring the Operations Manual is up to date as a true reflection of the system. An out of date manual sees a Franchisee quickly lose faith in any of the inclusions if some are inaccurate and old. Keeping the manual up to date is an absolute necessity and it should always be recognised that an Operations manual is a living breathing document.  Constant changes in legislation and industry regulations dictate the need for continual reviews and updates. The Manual must constantly change to reflect the business evolution; a lack of change may indicate a stagnant business.
 
Bringing training and presentation to the fore then saw the cumbersome Operations Manuals being broken down into logical and more easily handled sections, with many franchises then having more specific Manuals on a variety of topics such as “Opening and Closing Procedures”, “Merchandising Manual”, “Human Resources/Staff”, Branding Manual”, Local Area Marketing”, etc. Apart from being more practical, the existence of the various manuals clearly demonstrated to a potential Franchisee that the business had indeed been properly documented and systems had been developed and committed to paper. This in turn provided Franchisors with a valuable selling tool when recruiting new Franchisees.
 
Far too many Franchisors have very sub standard manuals. We have been surprised over the years at the poor efforts that some major brand franchises have made with regard to manuals for their Franchisees. Writing an Operations Manual, or the supplementary Manuals that accompany the main document is an onerous, and very time consuming task. If you find it too daunting, companies such as ours are only too willing to help. At Franchise Alliance, we implore you to diarise regular returns to the document to ensure its accuracy and try and improve it every time you revisit. Your Franchisees will appreciate it and the phone will ring less in the Support Office for insignificant enquiries, allowing the core focus to continue on proactive issues and opportunities.
 
Let’s all raise that bar still further and give the Franchisees a tool to improve. Email phil.blain@franchisealliance.com.au
 
 


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Robert Toth - Wisewould Mahony

Robert TothRobert Toth is a Franchise Partner at Wisewould Mahony Lawyers and an accredited Business Law Specialist with over 25 years experience as a business lawyer and consultant acting for Australian Franchisors looking to expand overseas and International Franchisors establishing business in Australia & New Zealand.

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Corinne Attard - Holman Webb Lawyers

Corinne AttardCorinne is a franchising and retail specialist with more than 25 years franchising and retail industry experience including extensive in-house experience as general counsel with responsibility for over 350 franchised stores. Corinne's approach is outcome oriented and risk management based and combines practical business advice with legal solutions. She acts for primarily retailers, franchisors, master franchisees and multi-unit franchisees.

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Greg Hipwell - Norton Rose

Greg HipwellGreg has extensive experience advising companies that distribute goods and services through a network or who exploit brands, technology or intellectual property. He has specific experience in trade practices law, particularly in relation to pricing, supply and market conduct issues and the Franchising Code of Conduct.

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Bruce McGregor - Herbert Geer Lawyers

Bruce McGregor - Herbert Geer LawyersBruce is a Partner of Herbert Geer Lawyers and is the national head of the Property - Franchising and Leasing team. He has practiced for over 20 years. Bruce provides franchising advice and guidance in Australia and New Zealand, acting for a number of well known prominent state, national and overseas franchisors, franchisees and master franchisees

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Peter McLaughlin - redchip lawyers

Peter McLaughlinPeter is a partner of redchip lawyers and heads the franchising and distribution team. He has over 15 years franchising and commercial law experience. He has presented papers on franchising at legal education seminars and workshops, and at public information nights regarding franchising, property and business related issues.

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Judith Miller - DLA Piper Australia

Judith MillerJudith Miller is a partner in the Sydney office of DLA Piper Australia and heads the Sydney franchise practice. Her franchising expertise includes advising local and international businesses on the establishment of regional and national franchise systems, and providing strategic advice to established operations.

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