A Guide To Writing An Excellent Operations Manual

The franchise operations manual is an essential document that all franchises need to put a great deal of time and effort into perfecting. If you're new to the concept of a franchise operations manual, we've constructed this helpful guide to creating a great document, which will help you grow and expand your business in an efficient, safe, and profitable manner.

What is an operations manual?

An operations manual is a document that the franchisor passes on to every franchisee that buys into the business. It details the rights and responsibilities held by both the franchisor and franchisee and explains how the franchise business model operates. Primarily, it contains all the information that makes a franchise a success.

When franchisees sign up with a franchise, they do so expecting that they'll be provided with all the tools they need to set up the business correctly. The operations manual may be the most important of these tools. It offers insight into the franchisor/franchisee relationship, establishes how the business is run and provides the vast majority of the franchise information you’ll require to make the new unit work. Without it, there would be no standardisation across the franchise system, and franchisees would be able to run their unit in any way they deemed fit.

Why is an operations manual necessary?

As we’ve already touched upon, the operations manual is particularly important because it ensures standards are maintained across the entire franchise system. To a certain extent, franchising depends on businesses guaranteeing a similar level of service at all their units. If they didn’t, the brand’s reputation would suffer. Customers who had a bad experience in one unit may avoid all other franchise units, and the entire business would struggle as a whole. If we look at a fast food franchise like McDonald's, it's clear that a large part of the chain's appeal is that no matter where you go in the world, you can walk into a McDonalds and know what you’re getting. Without the operations manual, standards vary between franchise units and the appeal is tarnished.

Operations manuals are also necessary because they ensure all franchise units are using the same IT systems, financial controls, and health and safety procedures. This makes it far easier to incorporate information, communications, and performance records into a single centralised system that the franchisor can control. If franchisees were utilising different software and running their business according to different procedures, there could be severe integration problems and the franchise would not be able to operate in an efficient or streamlined manner.

What should an operations manual aim to do?

On a basic level, the operations manual should aim to introduce depth to anything mentioned in the franchise agreement. For instance, if the franchise agreement contains a list of obligations, the operations manual should attempt to detail how each of the responsibilities should be met and fulfilled.

It’s also likely to include information related to how a location is chosen, how the business is set up, and what the franchisee has to do to start trading. Similarly, it will probably tackle the issues associated with day-to-day management of the franchise and how a franchisee can grow and expand their business.

Operations manuals generally vary from industry to industry, so a manual crafted for a fast food franchise is likely to look very different to a manual for a hardware franchise. While they’ll cover many of the same areas, operations manuals need to be reasonably exhaustive, so there'll be plenty of divergence too.

What should an operations manual include?

If we’re going into greater detail as to what a franchise manual needs to include, it’s a good idea to break down the contents into three types of information.

1. Information relating to the franchisor’s obligations and responsibilities.
2. Information relating to the franchisee’s obligations and responsibilities.
3. Information relating to the minimum standards expected across the franchise.

More specifically, franchisors will need to think about including the following information in their operations manual.

• Staff training guidelines.
• Health and safety regulations and practices.
• Financial regulations and procedures, including information relating to the systems used to record performance and the metrics used.
• Approved suppliers.
• Guides to any software or equipment used.
• Brand image and marketing guidelines.

This is by no means an exhaustive list, but it does cover some of the critical aspects of any operations manual.

How do you legally protect the operations manual?

The operations manual is one of the most important documents any franchise possesses. As it contains an incredible amount of information that's crucial to the success of the business, measures need to be taken to guarantee it is protected against misuse. One of the best ways to achieve this is by ensuring that as few people as possible see the document before having signed a franchise agreement. While it would be helpful to limit access to only those that have signed an agreement, it’s usually necessary to let those potential franchisees close to signing look through the manual, too. In such cases, a confidentiality agreement should be signed before access is provided. It's also essential to consider liability issues when writing a franchise manual. For this reason, experts in franchise law and professional editors should be used to ensure your manual is up to scratch.

Conclusion

There’s an enormous number of factors to consider when writing an operations manual and many of them will be specific to your industry and profession. However, we’ve tried to cover the considerations shared by all franchises. When writing an operations manual, it’s vital that you think about its purpose and plan the document in a way that ensures it covers all necessary aspects of the business. This will be the business’ key text, so it’s also important that it’s professionally edited and checked before it’s distributed. Due to its strategic value, it’s worth taking the time and investing sufficient resources in the operations manual. After all, it will form an essential cornerstone for your future expansion.