Learn how to leverage your operations manual to support franchisee consistency, compliance and success.
Key Takeaways
As the blueprint for your franchise system, the franchise operations manual is a critical resource for franchisees.
Keeping your operations manual consistent with your franchise agreement can prevent unnecessary confusion.
Performing an annual audit of your operations manual and other documents can support your organization’s long-term success.
Launching a new franchise can be one of the most exciting moments in an entrepreneur’s career, but it can also be a lot of work – especially when developing your franchise operations manual.
As the how-to guide and blueprint for your franchise system, the franchise operations manual contains critical information about everything from internal policies to systems, procedures, daily operations, corporate contacts and more. Because of that, your operations manual is the key resource that helps franchisees manage their businesses consistently, effectively and successfully across the entire franchise system.
So how can startup and emerging franchisors get the most out of their franchise operations manual? In this article, we’ll explore strategies for improving and using your manual to support your franchisees’ success while avoiding common mistakes that can negatively impact your business – and theirs.
1. Keep your operations manual consistent with your franchise agreement
In a heavily regulated industry like franchising, building a rock-solid legal foundation for your business is important for limiting liability and ensuring compliance as your brand matures. To prevent confusion and support franchisees across locations as your brand scales, the information in your franchising documents must remain consistent – especially your operations manual and franchise agreement.
“One thing we discuss with clients is, hey, we're using this general term ‘systems’ in the franchise agreement, and we'll consistently refer to ‘systems and standards’ in the operations manual. A lot of times, I think emerging brands don't make the connection of, are we articulating those standards there,” says Charles N. Internicola, a franchise attorney with over 25 years of experience and the founder of The Internicola Law Firm, a national law firm that provides boutique-level legal and consulting services to franchisors and entrepreneurs.
To ensure that your franchise operations manual’s contents are consistent with your franchise agreement, perform a cross-check of both documents and look for the following:
Cross-references. Look for references to the operations manual in your franchise agreement and vice versa, ensuring that all cross-references are addressed in each document.
Inconsistencies. Missing or inconsistent information between documents can cause confusion, so make sure to reconcile inconsistencies.
Misalignment. Watch out for missing or conflicting policies, fees, penalties and other information between documents and update them to align with your brand’s current policies.
By ensuring that the information in your franchise operations manual matches your franchise agreement, you can avoid confusion and offer franchisees a solid foundation to successfully operate their businesses on.
2. Include content that supports franchisee success
Your franchise operations manual is an important tool for franchisees to find answers about running their businesses successfully – including daily operations, systems, standards, operations, procedures, policies and more. Because of that, it’s critical to ensure its contents address topics that matter to franchisees and support them as business owners.
“Think of the ops manual as a hub of information pathways. And on the initial training, you have your boot camp or your playbooks there,” Internicola says.
For startup franchisors, it can be helpful to develop a table of contents before creating your franchise operations manual. Remember to think of the manual as an educational resource that franchisees can use as a tool to operate their businesses, rather than developing content geared toward your corporate team.
Topics to consider addressing in your franchise operations manual might include, but are not limited to, the following:
Table of contents. Keep in mind that while the contents of your operating manual is confidential, its table of contents must be included in your Franchise Disclosure Document (FDD).
Confidentiality and legal notices. Any legal documentation or policies associated with the operations manual.
Corporate team. Include contact information about key members of the corporate team that franchisees might need to reach out to for support.
Marketing and development. Address issues related to marketing and developing the business before, during and after opening.
Systems, processes and how-to’s. Discuss systems, processes and recipes or explainers for products and services.
Other critical information. Address policies, procedures and any other critical elements of the business to support franchisees in their daily operations.
Although your franchise operations manual should address the key elements of your company’s systems, standards and operations, it’s important to avoid overwhelming franchisees with too much information. Consider keeping the manual’s contents straightforward while including references to supplemental resources where franchisees can learn more about each topic.
3. Include training during your onboarding process
To ensure franchisee consistency and success, franchisees must know how to use the operations manual in their daily operations. Because of that, offering an operations manual training or workshop during the franchisee onboarding process can be helpful.
“For our onboarding, we called it ‘boot camp.’ We had lots of different training processes, but we actually did have an entire class on the operations manual. How to use it, what it’s there for, what you will find in it,” says Kelley Rosequist, a franchise growth advisor at The Internicola Law Firm and the former CEO of a dog training franchise brand with over 450 locations nationwide.
To make sure franchisees understand how to use the operations manual, consider addressing the following in your onboarding process:
Introduction to the manual. Introduce the franchise operations manual and discuss its purpose and contents.
Where to find answers. Educate franchisees about how to find answers to common questions and how to locate supplemental materials.
Additional resources. Inform franchisees about supplemental materials or corporate contacts that can help them understand various topics more comprehensively.
By providing training or workbooks that empower franchisees to use their operations manual efficiently, new and emerging franchisors can support their overall franchise system’s success while scaling their business effectively.
4. Update the operations manual as your brand evolves
As a new or emerging franchisor, it’s important to remember that your franchise operations manual is a living document that must be updated as your brand matures and grows.
“I remember how exciting it was when we finally finished our operations manual, only to realize we had to change it two or three times a year for the next 10 years,” Rosequist says, recalling her experience growing her former franchise system.
As your franchise system expands into new regions, onboards franchisees and achieves growth and success, its systems, standards, policies and operations will evolve to keep up with those changes. It’s important to update and master the franchise operations manual as those changes are implemented.
Common updates to operations manuals often include, but aren’t limited to, the following:
New systems, policies or standards. Update your operations manual to include new or altered policies, processes, systems and standards.
Addressing pain points. As your brand evolves, update your operations manual to address franchisee pain points to help them overcome common challenges.
Answers to common questions. Update the operations manual with new content that addresses common franchisee questions as those answers become available.
Table of contents. The table of contents of your franchise operations manual must be included in your FDD, so remember to update it whenever your manual changes.
By keeping your operations manual up-to-date, you can prevent confusion among franchisees and ensure their daily operations can run smoothly.
5. Perform an audit of your franchise documents
To avoid common mistakes franchisors make when preparing their franchise operations manual, it can be helpful to schedule an annual audit to review all of your franchise system’s documents with your team.
“The biggest audit opportunity every year is right after your FDD renewal. That’s a great time to sit down with the team and make sure that those documents still match because so many things change,” Rosequist says.
When performing an audit of your franchise operations manual and other franchising documents, consider evaluating the following:
New information. Have you added or changed any of your policies, systems or standards in the last year? Has your corporate team changed? If so, update your manual to reflect those changes.
Outdated information. Is any information in your operations manual outdated? If so, remove it and replace it with up-to-date information.
Legal compliance. Are your brand’s systems, standards and processes legally compliant? Do the contents of your operations manual adhere to federal and state regulations? If not, consult a franchise attorney and make the appropriate changes.
Consistency. Is the information in your franchise operations manual consistent with your other business documents? If not, update the documents to match.
As a new or emerging franchisor, it’s important to remember that the first version of your franchise operations manual likely won’t be its last – or even close. Instead, consider the manual a living document and an important part of your evolution as an entrepreneur and franchisor.
“When we're speaking with our clients, especially new franchisors, I'm like, the ops manual you start with is a version 1.0, and two years from now, you may be on version 3.8. But I think a big takeaway … is you need those consistent updates. You need that consistent communication, because then it becomes a living document that people actually follow,” Internicola says.
If you want to improve your franchise operations manual but aren’t sure where to start, our team can help. Contact us today!
