Step-by-Step Guide for Writing an Effective Franchise Operations Manual

Writing an operations manual is an important step when you’re starting a franchise. But it’s a lengthy document, and should give franchisees and employees alike a good understanding of the business and how to operate within it. So, here’s our step-by-step guide to writing an effective franchise operations manual.

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What is an operations manual?

First of all, what actually is an operations manual? Well, it’s a document written by the franchisor for the franchisees who buy into the business. It details the rights and responsibilities held by both the franchisor and franchisee, and explains how the franchise’s business model works.

When you invite franchisees to run branches of your business in new territories, they’ll expect to be given all the information and tools they’ll need to set up and run the business correctly. The operations manual is probably the most important of these tools. Without it, there would be no standardisation across the franchise system, and franchisees would be able to run their unit in any way they wanted to.

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Why do you need an operations manual?

As previously mentioned, the operations manual helps maintain standards across the business network. This is vital, as the success of a franchise relies, to a certain extent, on providing the same service at every unit. If this isn’t the case, the brand’s reputation is likely to suffer, for two main reasons:

a. The business will seem unprofessional. b. If inconsistency results in one or more branches with a sub-standard service, customers who visit them may avoid the other units in the franchise network.

Prioritising consistency across the network is a huge part of many franchises’ success. Take McDonald’s, for example. No matter where you go in the world, you can walk into a McDonald’s outlet and know what to expect. Customers on one side of the world can enjoy the same tasty meals as their counterparts on the other side. Without an operations manual, standards will inevitably vary between franchise units and damage the brand’s reputation.

Operations manuals also make sure all franchise units use the same IT systems, financial processes and health and safety procedures. This makes it easier to incorporate information, communications and performance records into a single centralised system controlled by the franchisor. If franchisees each used their own software and ran their business according to their own specifications, there would be significant issues when managing the franchise as a whole.

Steps for writing an effective franchise operations manual

Writing a franchise operations manual can seem like a daunting task, but if you break it down into its core parts, it’ll be easier to tackle. Essentially, the document includes three main categories of information:

• The franchisor’s obligations and responsibilities
• The franchisee’s obligations and responsibilities
• The minimum standards expected across the franchise

But here’s a more exhaustive step-by-step guide to writing your franchise operations manual:

1. Describe the franchisor-franchisee relationship

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Explain which responsibilities the franchisor and franchisee each have and how the business association works. In this section, you should also walk the investor through the process of setting up a new franchise unit and how they could develop it over time. Be sure to provide all the key pieces of information they need to know when launching their business.

2. Detail the business processes and procedures

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This is where you spell out how the business operates. It’s normally the longest section, as you’ll need to be thorough to avoid franchise-wide inconsistencies. Give details about the financial procedures and how performance is measured and provide examples of best practice in every business area. It might be useful to create flowcharts when explaining complex processes, so readers can easily follow them.

3. Provide information about your brand identity and products

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Give your investors a better understanding of the franchise by describing the brand and how it should be portrayed. Here, you should create marketing guidelines and specify when and how franchisees should use your logo and other imagery. Also, give more information about your product range or services, how they’re priced and which suppliers you use. Don’t forget to include details of any specialist software or equipment franchisees will need to use.

4. Clarify your business policies

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This section is particularly important, as it essentially lists the ‘rules’ franchisees must stick to. Explain how you handle business tasks and any issues that crop up, and include any specific information relating to the running of the franchise. In this section, you should also outline the health and safety regulations and any emergency procedures.

5. Add a section for HR issues

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Describe your recruitment and staff training processes, so franchisees can hire employees in your place. Then, you’ll need to create a list of key players in the business, with their job descriptions and contact details, which will help resolve any issues quickly and easily. Record individuals’ responsibilities and who they answer to. You should also include information on audits, assessments and monitoring processes and how complaints are managed.

6. Review the document

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Before you publish your franchise operations manual, make sure the layout and formatting are consistent throughout. This step will give the document a final touch of professionalism, which should motivate franchisees to respect it and adhere to it.

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7. Publish your franchise operations manual

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The way you do this is up to you. In the past, many franchisors have made multiple print copies of the manual and distributed it to everyone in the business. Today, this can seem unnecessary and unsustainable. As an alternative, you could publish it on an online portal or other secure space your franchisees have access to.

Things to bear in mind

• Go into detail – On a basic level, the operations manual should provide more details about the information provided in the franchise agreement. For instance, if the franchise agreement contains a list of franchisee obligations, the operations manual should explain how each of the responsibilities should be met and fulfilled.
• Legally protect the manual – Operations manuals contain an incredible amount of information and, often, it’s key to the success of the franchise. As a result, you should take measures to protect it against misuse. One of the best ways to do this is by limiting the number of people who see the document before signing a franchise agreement. Ideally, you would only give it to those who have signed on the dotted line, but you will usually need to let potential franchisees who are close to committing take a look too. In these cases, they should sign a confidentiality agreement first. You should also consider liability issues when writing the manual, so it may be helpful to consult an expert in franchise law and a professional editor.

Get started today

When writing a franchise operations manual, it’s vital you think about its purpose and plan the document to make sure it covers all the necessary aspects of the business. This will be the business’ key text, so you should make sure it’s been professionally edited and checked over before distributing it.

If you’d like some more help with the layout, click here for examples of different templates for franchise operations manuals.

Or head back to our franchise directory to find the perfect franchise for you.