66 minutes | Dec 5th 2020

Episode #31 - The Franchise Operating Manual

My Podner in this episode is me, Kit Vinson (finally!), and I'm going to talk to you about what franchisors should know about their franchise operating manual. Time Stamps Kit Vinson Intro 00:00:29 Segment 1 00:02:15 Get to know Kit Vinson Segment 2 00:13:30 Topic Segment – The Franchise Operating Manual Segment 3 00:00:00 There are no Quickdraw Questions in this episode   Topics Discussed in this Episode What’s Included in a franchise operating manual? Every manual is customized to the industry of the company, but there are elements of a franchise operating manual that are common to all manuals. Introductory chapters Pre-Opening chapter Human Resource chapter Daily Operating Procedures chapters Marketing chapter Sales Chapter   What is the process for producing a franchise operating manual? Creation of the custom outline for the manual Legacy documentation review Identification of the content experts Information gathering phase Production phase Revision phase Make the manual creation process fun so that you can start the flow of your team’s creativity juices.   How often does the typical franchise manual need updating? Manual updates should be completed on a regular basis. Younger franchise systems will need to update their operating manual more frequently because their systems seem to evolve at a much faster pace than that of a mature franchise system. If you do not keep your franchise operating manual updated regularly, you increase the probability of you having to explain to a judge why your manual isn’t up-to-date.   How are franchise operating manuals typically distributed to the franchisees? Hard copy (paper) PDF Web based platform (Wiki-style) Hard copy manuals have extreme limitations. They are not secure. They are only a snapshot of your system on that day. Media limitations. PDF manuals are searchable, but they are not secure. They are also a snapshot of your company’s system on that day.  They are relatively easily to update but you run the risk of having multiple versions of your manual floating around your system. Web based, online operating manuals are secure, they are extremely easy to update, you can track your franchisees activity in the manual, and you can include multimedia content such as videos.   What are the functions of a franchise operations manual? First, the Franchise Operations Manual is the authority document of the franchise System Standards. The System Standards are the standard procedures that a franchisor requires of all franchisees in order to duplicate the customer experience in every location. The customer experience is the driving force behind profitability. If you can duplicate a favorable customer experience, then you may have a business that you can franchise. If you have a well prepared Franchise Agreement, it will refer to the Franchise Operations Manual as the System Standard. This way, as your system grows and your System Standards change, you only have to update the manual instead of updating the Franchise Agreement.   Second, the Franchise Operations Manual is the most effective tool for protecting your Brand. A company’s Brand is one of its most valuable assets. The Brand is also the asset that is at most risk when a company decides to franchise. When you franchise a concept, you are putting your Brand in the hands of other people, all of whom likely have different ideas about the best direction for the company. A properly prepared Franchise Operations Manual, with well-defined and organized System Standards, will be one of the few tools you have to manage the Brand and control the franchisees when they try to act on their vision for what is best for your Brand.   Third, the Franchise Operations Manual will likely be the principal tool for training new franchisees. It is the “Your Company for Dummies” book. You have to assume that most of your franchisees will not have experience in your industry. They may not have any business experience at all. It is very common for a retired schoolteacher or a retired military person to invest in a franchise. This is not to suggest that schoolteachers or military personnel don’t have any business savvy, it is only to say that they were not formally trained in business and have not practiced it during their career. Your manual needs to be a document that not only trains them on your system of providing a favorable customer experience, but also one that brings them up to speed on how to manage a business.   Fourth, a well prepared documentation of the procedures that has helped make your company a success will help you sell your concept to potential franchisees. Put yourself in the shoes of a potential franchisee. If you received a Franchise Disclosure Document (FDD) that showed you that the company had a 50 page document describing all of its operating procedures, you might be a little concerned. You will also take your Franchise Operations Manual with you when you meet with potential franchisees for the first time. In that meeting, you will attempt to sell the concept to the prospect. Like all good sales people, you will likely have a few sales tools to assist you. You will probably present a PowerPoint presentation of the concept, you will review the company’s performance in the FDD, and you will present the Franchise Operations Manual as your proof that you have a well documents system for success.   Fifth, you don’t get very many opportunities to convey your corporate culture to your franchisees. Initial training lasts a week or so. Annual conferences last a few days per year. Ultimately, it is the franchise operating manual that will have the most contact with your franchisees, so what better place to show them who you are.     Kit Vinson www.franman.net kit.vinson@franman.net 214-736-3939 x 101  
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