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Operating on a
franchise system
A sick
Operations Manual is usually a reflection of a sick franchise
system and urgent surgery is required in most cases!
In my many
years as a franchise consultant, I have witnessed an enormous jump
in standards when it comes to the Operations Manuals that
Franchisors are providing for their Franchisees. Long gone are the
days when a twenty page manual with a few ambiguous, and supposedly
motivational comments, would suffice for a Franchisor to
legitimately say to franchise prospects that the system had such a
manual. Franchisees took that on face value, only to be bitterly
disappointed upon receiving their copy, which usually gave them
little or no advice on how to run their new business. Sadly, this
still happens today.
If this
describes your current situation and manual today please read on,
or face embarrassment and possibly even system failure.
Solicitors
who read the Franchise Agreement that connected the Operations
Manual to the System were also often lax in not insisting upon
seeing that the document existed at all, and then failed to advise
their client as to its contents and value. Sadly, this still
happens today too!
Fortunately,
today’s Franchisees rightfully demand a far more professional
standard and solicitors are prepared to delve deeper on behalf of
their clients to make sure the Operations Manual does indeed
provide real value. After all, it is a large part of what a
Franchisee pays a Franchise Fee for in the first place.
The first
outcome from raising the bar was for Franchisors to recognise that
they could not be experts on all things for their franchises. Most
Franchisors could write some sort of reasonable physical
operational guideline on how to bake the bagel, mend the dent or
fix the filter for their system, but many aspects of the manual
required the input of various experts, and across many fields. The
solution was outsourcing sections, or the entire manual, to
professional Operations Manual writers. For example, the old
manuals never had sections on Human Resources, Occupational Health
and Safety, Manual Handling or Food Safety Programmes and yet now
all of these areas are vital ingredients of the “How to” book that
a Franchisee can refer to everyday.
Computers and
the internet were a boon for the Operations Manual too, with access
being provided on line at the touch of a button for the busy
Franchisee who was in store with an urgent customer query and an
irate customer in front of them. The introduction of wireless
connection for laptops has seen the Franchisee in the field also
being able to instantly access important help and advice. These are
now really minimum standards and expectations for franchise
systems. Good manuals go further and are hyperlinked to avoid
lengthy searches for relevant material as well as being properly
indexed and referenced.
At Franchise
Alliance we constantly remind our clients that an Operations Manual
may help a Franchisee run their particular franchise but should
also advise and guide a Franchisee on the obligations and solutions
of running a small business in general terms. These two issues do
overlap, but require many different areas of information to be
provided.
We believe a
Franchisor has an onus to include materials such as where to go to
get tax or wage advice. We don’t recommend that the Franchisor
takes on such a mantle but should certainly include in their
manuals how to guide a Franchisee to get the right advice.
GST, BAS
returns, PAYG tax, hiring and firing staff, working out gross
profits, margins and break evens, establishing a chart of accounts,
even basic accident treatments should all be included in an
Operations Manual and are, more frequently then not, completely
omitted.
This is just
not good enough in today’s complex business World.
All this
information then produced the next phase of Operations Manual
development. The plethora of data produced Operations Manuals of
400 pages or more that Franchisees couldn’t jump over and were so
frightened of their volume that they chose never to open them at
all! Operations Manuals everywhere were busy collecting dust and
being totally counter productive to their original intention of
providing instant answers. Franchisors couldn’t understand why
Franchisees kept ringing them to provide answers to questions that
were answered in the manual. Thankfully the age of digital
photography dawned and two paths emerged.
Firstly, the
introduction of colour and photographs at very little cost gave
rise to manuals that were eye-catching, a pleasure to read and,
more importantly, very easy to follow. Pictures of the hamburger on
the grill at every stage of its cooking process left the Franchisee
and their staff with no questions as to when to turn it
over!
Training was
dramatically enhanced by this development and a good Operations
Manuals should always be written with Induction and Ongoing
Training in mind. In fact, the Training Officer within the
system is the very best person to be charged with the
responsibility of ensuring the Operations Manual is up to date as a
true reflection of the system. An out of date manual sees a
Franchisee quickly lose faith in any of the inclusions if some are
inaccurate and old. Keeping the manual up to date is an absolute
necessity and it should always be recognised that an Operations
manual is a living breathing document. Constant changes in
legislation and industry regulations dictate the need for continual
reviews and updates. The Manual must constantly change to reflect
the business evolution; a lack of change may indicate a stagnant
business.
Bringing
training and presentation to the fore then saw the cumbersome
Operations Manuals being broken down into logical and more easily
handled sections, with many franchises then having more specific
Manuals on a variety of topics such as “Opening and Closing
Procedures”, “Merchandising Manual”, “Human Resources/Staff”,
Branding Manual”, Local Area Marketing”, etc. Apart from being more
practical, the existence of the various manuals clearly
demonstrated to a potential Franchisee that the business had indeed
been properly documented and systems had been developed and
committed to paper. This in turn provided Franchisors with a
valuable selling tool when recruiting new Franchisees.
Far too many
Franchisors have very sub standard manuals. We have been surprised
over the years at the poor efforts that some major brand franchises
have made with regard to manuals for their Franchisees. Writing an
Operations Manual, or the supplementary Manuals that accompany the
main document is an onerous, and very time consuming task. If you
find it too daunting, companies such as ours are only too willing
to help. At Franchise Alliance, we implore you to diarise regular
returns to the document to ensure its accuracy and try and improve
it every time you revisit. Your Franchisees will appreciate it and
the phone will ring less in the Support Office for insignificant
enquiries, allowing the core focus to continue on proactive issues
and opportunities.
Let’s all
raise that bar still further and give the Franchisees a tool to
improve.
E-mail
phil.blain@franchisealliance.com.au for a
“Hints and Tips” document on Operations Manuals. | 