Understanding the Importance of an Operations Manual

03/03/2018 08:00 | Start a business

The importance of the operations manual in franchising

An operations manual is an extension of the relevant material contained in the franchise agreement. It gives franchisees everything they need to know about how to duplicate the franchise business model. All the elements that have been previously tried and tested and resulted in an effective system are documented so that franchisees can consistently replicate success.

Its likely that there will be more than one operations manual. Separate manuals tend to be created to cover different elements of the business. So, there would be one manual for training, another for management of employees, and another for marketing, for example. Franchises that invest time and effort into developing detailed operations manuals are more likely to be successful. This is because theres a higher probability of the system being followed consistently in all franchises - which is better for franchisor and franchisee.

Why is the operations manual important?

A well-written set of manuals will support the franchise agreement in areas that need to be followed to protect the integrity of the brand. It doesnt matter which franchise a customer visits, the experience should be entirely consistent. Each franchise location should deliver a uniform product or service. It is through consistency that a robust and reputable brand is established.

Benefits of the operations manual

The operations manual can help both franchisor and franchisee in several ways.

For the franchisor, it is a way of documenting all the knowledge and experience that they've built up while developing their business. As this priceless information is detailed in a simple to follow format, the franchise becomes more valuable as franchisees can replicate it more easily. It is also a blueprint for the standard thats expected for the franchise.

Similarly, franchisees also benefit from a good operations manual. A proven business system and brand are the reasons why franchise investments are so appealing to prospective franchisees. Rather than creating a business from scratch and having to learn from mistakes as they go along, a franchisee has the benefit of simply being able to follow the operations manuals.

What elements are included in the operations manual?

No two operations manuals are the same and will differ from franchise to franchise. The level of detail the manual provides to reinforce the franchise business model will also vary, but the following elements are generally covered:

  • Outline of the franchise and its goals
  • Roles and responsibilities of the franchisor and franchisee
  • Location selection and fit out
  • Operating standards and policies
  • Stock suppliers and ordering protocol
  • Opening and closing procedures
  • Full job descriptions
  • Employee recruitment and training
  • Administration, accounting, and reporting requirements
  • Correct use of the brand
  • Local marketing initiatives and advertising templates
  • Cleaning and hygiene expectations
  • Legal requirements

Although the franchisee is the primary beneficiary of the manual, it will be used by everyone within the franchise. Employees of the franchisee should also be able to pick it up and read how to do what needs to be done on a daily, operational basis.

Does the operations manual change?

As a franchise business grows, so will the operations manuals. The manuals will evolve and become more comprehensive as policies and procedures are polished and improved over time. The way things are done within the franchise are prone to change with the introduction of new technology and operating systems. To make sure that the manuals reflect the franchise business model accurately, they should be reviewed and updated at least once a year.

To enable them to be regularly updated, many operations manuals are stored online. This gives the franchisor the comfort that the correct version of the manuals is held by all franchisees. It also makes it a lot easier for franchisees to access the part of the manual that they need at any point in time. The manuals are essentially the reference materials that franchisees need to run a successful business.

Must the operations manual be adhered to?

Yes. In the franchise agreement, it will state that complying with the operations manuals is part of the franchisees responsibilities. Without adherence to the manuals the reputation of the brand can be jeopardised, so franchisors take lack of conformity very seriously.

Also, as the operations manuals outline how to run the franchise successfully, their contents are fundamental and valuable. For this reason, the franchise agreement will also detail how they should be stored and kept confidential. Failure to comply with this will undoubtedly result in the franchise relationship being terminated.

Making the most of the operations manual

Its in all franchisors interests to support their franchisees; if franchisees are successful then so are the franchisors. Part of the support on offer comes in the form of performance monitoring. Being able to give guidance on how the franchisee can improve is a great benefit of being part of a franchise system and is made much easier when the standards required are defined in the manual. Where franchisees are not achieving these standards, any gaps in skills or knowledge can be recognised and a training plan put in place.

The operations manual should be read and understood entirely by franchisees. This way they can own and operate their franchise more efficiently and profitably, which will ultimately result in a better relationship with the franchisor.

The manual should be viewed as the informative and valuable document that it is. If used probably then it can lead to success for all involved in the franchise. Brand awareness is increased through standardisation, customers receive a consistent and quality service whenever they encounter the brand, and the franchisor and franchisee reap the rewards of a lucrative business.

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