Making sure the blueprint is right

The preparation of the operating manual is the least exciting part of launching a business-format franchise, but it is nevertheless vital to the success of the system. This is the one document that enables each franchisee to replicate the system in every detail, and provides the franchisor with the closest it can get to a guarantee that the quality of service will be the same across the whole of the network. It is no over-statement to say that without an effective manual a true business-format franchise cannot exist. By Penny Hopkinson, founder of Manual Writers International.

Why do I need a manual?

It will enable you to copyright your ideas, know-how and trade secrets and, assuming you have an ethical franchise, it will be one of your contractual obligations to provide each franchisee with a copy on loan for the duration of their contract.

The manual will also reinforce the terms of the agreement, establish – and enable you to maintain – quality standards, impose conformity and uniformity across your network, provide a means for monitoring and control, set benchmarks for continuous improvement, and provide you with the means by which you can update and introduce new systems.

How will the manual benefit my franchise?

If you are to have a strong brand, the business must be consistent in every way. You and your franchisees must live up to the brand values of the system and deliver your customers’ expectations. Superior quality in terms of knowledge, selling skills and all-round professionalism is vital in promoting brand values and products/services.

A well-written and produced manual will help you to achieve:- greater efficiency; new levels of customer satisfaction; greater customer loyalty; stronger links between you, your franchisees, and your customers; improved understanding of the business partnership between you and the franchisees, and of franchising as a system; better targeted help and advice from your franchise support office; and a reduction in the number of unnecessary enquiries.

When must I have the manual ready?

Your franchise agreement should require you to have the manual ready for your first franchisees. Ideally, it should be issued to franchisees when their induction training commences. Therefore, it makes sense to prepare your manual in such a way that it dovetails with the subjects covered in the induction programme and later in your development training programme.

How can I keep track of the number of manuals and amendments issued to franchisees?

You should issue a numbered copy of the manual on loan for use by the franchisee and his staff, but it remains your property for the duration of the agreement. When it terminates, the franchisee must return the manual to you, together with any other related documentation. By numbering each copy you will be able to keep track of all the copies. The numbering is particularly useful when it comes to issuing new editions of the manual and checking in returned obsolete copies.

Great care must be taken to ensure that no part of the manual falls into the hands of any unauthorised person because it contains information about your working methods and practices that you would not want generally disclosing. Franchisees and their employees should be asked to sign a confidentiality agreement before they are issued with a manual and this should be kept with it as a permanent record. Franchisees must not be allowed to make copies unless they have been given written permission.

Can I charge franchisees for copies of the manual?

It is part of your initial franchise package and the cost of producing it must be covered in your business plan. However, you can make a charge (probably anywhere between £200 and £1,000) to replace it, providing your franchisees have been made aware of the replacement cost.

Who owns the copyright of the manual?

You, as franchisor, own the copyright. The manual should be prefaced with a copyright notice and we recommend you incorporate the copyright symbol into every page. This can be printed on – or even watermarked into – each page.

Normally, we add a disclaimer to explain that, although the manual contains references to legislation and regulations affecting the franchisee’s business, they are only summaries of the position and should not be relied upon as full statements of rights and obligations.

My franchise is a relatively simple concept. Surely there can’t be many procedures to document?

Franchisors with simple concepts are often surprised when we begin to draw up the contents of their manual. For example, a manual for a home delivery franchise can run into several hundred A4 pages, supported by additional worked examples, and business forms for monitoring and controlling the business.

During the pilot stage of the franchise, it is our standard practice at Manual Writers to produce a pilot manual which can then be fine tuned to progress to the first full edition for publication just prior to the official launch. The final stage, perhaps 18 months after launch, would be to update the manual in line with your on-going obligations, such as development training.

An amendments sheet at the front of the manual is the usual method by which updates are recorded by the franchisee. You should make regular checks that your franchisees have been diligent in adding these amendments to their manuals and thus ensure the integrity. After all, it is vital that everyone sings from the same hymn sheet.

How can I maximise the value of the manual?

It should fulfil the following four main functions. It should be a comprehensive reference source, a training tool (for the franchisor at the induction training stage, or when training at arm’s length, and for the franchisee when training his own staff), a marketing tool, and a business development tool.

Therefore, the manual must underpin the franchise agreement, define your core values, describe precisely your definition of quality, identify your franchisees’ responsibilities, ensure franchisees and staff understand their role in attaining quality, document the main operating requirements and the main management requirements, dovetail with existing documentation (via cross-references), provide accurate franchise support office reference points for help and advice, set new standards in customer service, and benchmarks for further improvement.

How should I structure the manual?

Manuals should, of course, be tailored to the individual franchise, but the contents usually fall under three main headings – set up and support, day-to-day operating and management requirements, and business development. We will look at these in turn.

Set-up and support – Firstly, it will provide incoming franchisees with all the information they require at the planning stage prior to signing the franchise agreement – what precisely can be expected in terms of their input (financial and otherwise), a description of the pre-launch support and timing, and details of the obligations, risks and rewards.

Secondly, the franchise support staff by documenting the procedures for attracting, interviewing, recruiting, setting-up and supporting franchisees for the first 12 months will understand more precisely what support they must provide and the quality standards they must establish and maintain.

Here it is worth noting that where a prospective franchisee has not already signed the franchise agreement, he should have signed an undertaking of confidentiality prior to having sight of the manual.

Day-to-day requirements – These operating and management requirements form the core content of the manual and this section should deal in depth with every aspect of the day-to-day running of the business – product knowledge, the safe operation of the equipment and its maintenance, the pricing of the products/services, customer service, marketing and promotion, selling skills, staffing and the financial management and reporting requirements.

Business development – As part of your on-going obligations, you should equip your franchisees with the advanced skills that are necessary to grow the business by providing them with development training and on-going support.

This section of the manual should focus on the methods that can be employed to improve competitiveness, increase profitability, gain new markets, and set new benchmarks for improvement.

An important component here is a business and financial review procedure to monitor the financial health of the franchised unit and take remedial action where necessary. This will use traditional methods to evaluate the unit’s business performance – revenue, production costs, effective use of resources, return on investment, and cash-flow. Well-established franchise systems may also employ less traditional methods, such as customer focus research and attitude surveys, to determine how customers perceive the franchised unit, and whether or not the actions being taken are improving those perceptions.

What title should I give the manual?

The term ‘franchise manual’ is generic and covers all the written information that will be used to set-up, operate and develop a franchise. The title you use should mirror that in your franchise agreement – usually ‘operations manual’, ‘operating manual’, or ‘operational manual’ (the latter being a more accurate indication of its contents). However, some franchisors prefer to chose a title that reflects the importance of quality standards as evidenced by Unigate’s Franchisee Quality Manual.

What is the difference between operating and operational?

We often hear people asking for what they want in terms such as ‘good’, ‘the right size’, or ‘on time’. Obviously these words mean something to the person using them. They also mean something to the person hearing them. But will the two meanings be the same? Only the use of operational definitions can guarantee a correct interpretation.

A definition explains what something means. An operational definition does much more. It explains how something should be observed, measured, or decided. Without definitions, ambiguity can easily arise. Training seeks to qualify operational definitions and demonstrate that only the highest quality service and product standards are acceptable.

Generally speaking, operating definitions are set out as checklists. These are highly effective in themselves as aide memoires. An example would be a store standards checklist.

However, operational definitions are required to describe sufficiently all the steps necessary to complete a given task to the required quality standards.

In a food service franchise, for example, the easy option would be to tell the franchisees that cleaning must be carried out frequently. But this, in fact, tells them nothing. The franchisor would need to explain what must be cleaned (kitchen floor, equipment, surfaces), what must be used to clean them (list of approved cleaning solutions), how these solutions should be used, what are the logical steps in carrying out the work, how often cleaning will take place, and at what times.

We recommend that this information should be reinforced as a daily cleaning checklist to be used by the owner/manager to ensure that such jobs are completed. It would also be helpful to explain why this is a requirement (e.g. to prevent cross-contamination).

How can we make the manual user-friendly?

Here are some proven suggestions that will help to make it user-friendly and thereby likely to be referred to more frequently and enthusiastically.

  • Develop an easy-to-follow, logical structure.
  • Compile a comprehensive table of contents.
  • Apply a good and consistent method of indexation.
  • Provide a simple system of consecutive cross-referencing.
  • Set a common style to run parallel with the corporate image.
  • Adopt an appropriate viewpoint for communicating procedures in an unambiguous way to reinforce the terms of the franchise agreement.
  • Use an appropriate medium for the type of user (i.e. hard copy, electronic format).
  • Create a simple, easy-to-read visual presentation for the pages, making use of white space and a plain sans serif typeface of at least 10 point.
  • Produce, say, a separate volume of worked examples, business forms work, etc. for easy reference.
  • Adopt a format that makes it easy for you and the franchisees to update the manual.

Can I write my own manual, or should I use a specialist?

Many franchisors have produced their manuals in-house with varying degrees of success, but others have sought external help having recognised that they needed professional guidance, and/or specific authoring, editing and publishing skills.

Some people find it impossible to fit project managing and writing a manual into their busy schedule, whilst others find that they have priorities that are always more pressing or, indeed, preferable. Information provided by their colleagues often turns out to be operating rather than operational, listing the tasks that need to be undertaken, but failing to describe how they should be carried out and with what frequency.

In-house writers can often fail to approach their subject objectively and, because of familiarity, cannot describe the procedures precisely. Another problem is that they do not know how to ensure that their manual underpins the terms and conditions of their franchise agreement. At the initial stage, they keep re-writing, but find it difficult to complete the job because their franchise business system is continuously evolving and improving during the first year of the pilot operation.

In contrast, an external resource, such as Manual Writers, can quickly become part of the franchisor’s team, absorbing everything about the business.

Manuals do not lend themselves to an off-the-shelf database solution. They all need to be tailor-made for each specific franchise operation because in today’s competitive world it is the individual franchisor’s distinctive management style, know-how and business system that make the difference and this can only be reflected throughout the network by all the units working from an exhaustive professionally-produced operating manual.