Franchise Operations Manuals – How To Write A Franchise Operations Manual In Three Easy, Affordable Steps
Franchise operations manuals may seem daunting, especially for a company that has never written an operations manual before. Bewildered by the new business of franchising, with its legal requirements, franchise disclosure documents, operations manuals, training programs, etc., many companies delegate responsibility to a high-priced franchise consultant.
But using someone to write your franchise operations manual who knows literally nothing about your business, never makes any sense when everything is considered objectively. And, besides a hefty price tag of $20,000 or more to write the manuals, using franchise consultants brings another, expensive result – legal risk. Here are some drafting tips and strategies from a recognized, international franchise expert.
Why Franchise Consultants Are Risky Business
Paying someone who knows nothing about your business, and having them learn it from scratch at your expense is really just common sense. Using franchise consultants for what is a relatively easy and straightforward task has never made any sense – except to the franchise consultants who charge exorbitant amounts to write an operations manual. It’s one of those little franchise secrets that the consultants don’t ever mention or discuss.
Using a franchise consultant to write a franchise operations manual also carries legal risk. The principal legal risk comes from including inappropriate topics, chapters and policies that are commonly found in company-owned, chain operations manuals. If these are included, as they often are in franchise operations manuals, very significant franchise liability issues arise. Because the franchise consultants are not franchise attorneys or experts, they are entirely oblivious to this risk. They don’t know where the bullets come from in franchise litigation. As a testifying and consulting franchise expert, I routinely find franchise operations manuals drafted by franchise consultants and do-it-yourself manuals containing inappropriate chapters or topics. And, because they rely on boilerplate manuals used for other clients, where (hopefully) all instances of burgers, for example, are searched and replaced with tax returns, the end result is not only dangerous – it is also very mediocre. Giving a mediocre operations manual to a franchise owner who has invested hundreds of thousands (or in some cases millions) of dollars in your franchise model is definitely not the best way to start or ensure a smooth franchise relationship.
The Best Practice Approach To Drafting Franchise Operations Manuals
Besides the expensive and legally risky approach there is another, best franchise practice approach based on almost three decades of writing, editing and reviewing hundreds of franchise operations manuals. The essence of this approach is also common sense – letting the true expert in your business write the manual. Typically that person is the founder of the business, or a small team of management personnel who know business operations inside and out. While a franchise expert should be involved in the process, the expert’s role should be limited to a planning and editing capacity.
Three Easy Steps For Drafting A Franchise Operations Manual
The drafting process begins with planning and developing the Table of Contents for the franchise operations manual. This includes making sure all the appropriate chapters and topics are included, and the inappropriate ones are not. Knowledge of franchise management best practices is essential here, and that’s why a franchise expert’s input and planning is so important. Because most franchise operations manuals are incorporated by reference in the franchise agreement (which is a franchise industry best practice) the franchise contract is also reviewed. Some operations-specific information may be inadvertently included in the contract by the attorneys, which is not a good thing. This needs to be moved out or appropriately amended.
The second step is giving the person(s) within your company who have drafting responsibility samples of operations manual writing styles, guidelines and instructions. With these, they can begin drafting each chapter of the manual using their extensive operational knowledge of the day-to-day, week-to-week, etc. aspects of your business.
The third and final step is having the franchise expert review each chapter as it is drafted and comment on the professionalism and sufficiency of the chapters from a franchise industry best practices and franchise operator perspective.
The first couple chapters are typically the hardest to draft, as you or your management personnel learn and apply operations manual drafting techniques under the guidance of a professional editor. But after that, it’s smooth sailing through the balance of the document. This approach produces a professional, easy to use and update franchise operations manual. It also ensures the most efficient use of resources and talent, and eliminates having to pay a franchise consultant $20,000 or more for this relatively simple task. Whether or not a company ultimately franchises, the process of planning, documenting and implementing standardized operating procedures and systems via operations manuals, like blue chip franchise and non-franchised companies do, makes any firm operate more efficiently and competitively. In a franchise environment, it ensures consistent and uniform operations, helping personnel with different skills learn to perform tasks in a consistent manner throughout the franchise network. Finally, it’s important to realize the process of writing a franchise operations manual never stops. As the business model evolves, so must the operations manual – the ultimate reason why writing the manual yourself to begin with makes imminent common sense. As one franchise company executive observed “I found that not only was writing my own operations manual a cost savings; it was imperative.”
copyright 2008-2009, Kevin B. Murphy, B.S., M.B.A., J.D. – all rights reserved
For further information, visit the Franchise Foundations website
About the Author
Franchise Attorney and internationally-recognized franchise expert, known in the industry as Mr. Franchise, Mr. Murphy is also an author, teacher and former franchise owner. He holds degrees in Business Administration (B.S.B.A.) and Law (J.D.) from the University of San Francisco and a Master’s degree in Business Administration (M.B.A.) from San Francisco State University. For the past twenty-eight years he has specialized exclusively in the franchise industry as a San Francisco franchise attorney and owned a very successful franchise in the home improvement field. He has written over 30 publications, including four books on franchising and one book on trade secrets. Mr. Franchise instructs franchise company personnel in best franchise practices and teaches franchise, licensing and intellectual property courses to attorneys. He has drafted, reviewed and negotiated over 500 Franchise Disclosure Documents. Mr. Franchise is a franchise attorney and Director of Operations for Franchise Foundations a San Francisco-based professional law corporation.
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