Want to save on the $20,000 to $25,000 that franchise consultants charge to write an operations manual? Already have an operations manual but want it reviewed by a franchise expert? Need a sample table of contents and technical writing instructions so you can get started writing your own operations manual?
The information contained in the article below is based on 30-years experience reviewing and drafting not just dozens, but hundreds of franchise operations manuals. It is also based on experience testifying in franchise litigation cases involving pitfalls and other "problems" in operations manuals. The end result is a common sense approach to help you write a customized manual that is more professional and user friendly than one produced by a high-priced franchise consultant. And you will avoid the high legal risk of using franchise kits and template manuals.
A legal introduction to franchise operations manuals: Because the operations manual is incorporated by reference in the franchise agreement, it becomes a living legal document requiring oversight and review by a franchise attorney. This is not to say a franchise attorney should write your operations manual. Heaven forbid, doing that would be very, very expensive. And, for the reasons discussed below, it would also be a waste of money and result in a very mediocre manual.
Building A Solid Foundation For Franchise Operations Manuals
Drafting A Franchise Operations Manual in Three Easy Steps Copyright 2008-2010, Kevin B. Murphy, B.S., M.B.A., J.D.
OVERVIEW OF AN OPERATIONS MANUAL DRAFTING - REVIEW PROCESS Drafting a franchise operations manual seems daunting, especially for a company that has never written one
before. A franchise operations manual is actually easy to draft, but
requires a special focus to avoid franchise liability issues
unique to the world of franchising.
Written correctly, an operations manual is a daily reference tool, guiding someone
unfamiliar with your business through the day-to-day operating procedures. An operations manual is often called the Bible of Operations and so different from an Employee Handbook (a much smaller document covering employment conditions,
corporate culture and on-the-job behavior policies). A good operations manual reduces the user's endless stream of questions, like "how do I do this," and becomes a 24/7 reference guide.
Intimidated by the franchise
industry's legal requirements, FDD franchise disclosure documents,
operations manual and training program disclosures, etc., many companies delegate
responsibility for writing their manual to a high-priced franchise
consultant. But using someone to write your 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 to $25,000 to write the manual, using franchise consultants (or template operations manuals)
brings another, even more expensive result – legal risk. WHY USING CONSULTANTS AND TEMPLATES ARE RISKY BUSINESS Paying
someone who knows nothing about your business, and having them try and learn it
from scratch, at your expense, is just a common business sense bad idea.
Using franchise consultants for what is a relatively easy and
straightforward task has never made any sense - except to the
consultants who charge exorbitant amounts to write franchising
operations manuals. It’s one of those little franchise secrets that
consultants, not surprisingly, don’t ever mention or discuss. Actually, they probably laugh about it as they go to their bank to cash your checks.
Using
a consultant to write a franchise operations manual or buying a template operations manual also carries significant, long-term 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 invariably are in franchise operations manuals and template operations manuals,
very significant franchise liability issues arise.
Because franchise consultants are not franchise attorneys or experts, they are
entirely oblivious to this risk. The same goes for companies that hawk cheap template manuals. They have no clue where the bullets come
from in franchise litigation. As a consulting and testifying franchise
expert, I routinely find operations manuals drafted by franchise
consultants and do-it-yourself template manuals containing inappropriate
chapters or topics. And these get franchise companies into hot legal water that becomes very expensive.
The plain truth is franchise consultants don't even
bother to try and learn your business before writing the operations manual.
Instead, 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 an operations manual that
is both dangerous and very mediocre. Giving a mediocre operations
manual to a franchise owner who has invested tens to hundreds of
thousands (or in some cases millions) of dollars in your business model, as well as ten to twenty years of their life,
is definitely not the best way to start or ensure a smooth franchise
relationship.
And if your operations manual contains inappropriate chapters or topics, the seeds of a future franchise lawsuit are sown and can't be undone. Be prepared to spend mind-boggling amounts when you enter the franchise litigation arena - where the price tag is hundreds of thousands of dollars and up. This is also a fact you won't hear from companies selling operations manual templates that are supposedly "fast and affordable."
THE BEST PRACTICE APPROACH TO DRAFTING A FRANCHISE OPERATIONS MANUAL Besides
the expensive and legally risky approach there is another, best
practice approach based on thirty years of writing, editing and
reviewing hundreds of franchise operations manuals. The essence of this
approach is also common sense - letting the true expert on your
business write the manual. Who is that? Typically this person is the founder, or a small team of management personnel who know business
operations inside and out. While a franchise expert's involvement in
the process is important, even critical, the expert’s role should be carefully limited
to a planning and editing capacity. That way, you're not spending money foolishly and unnecessarily. This is not something you'll ever
hear from franchise consultants and for a good reason. They don't want
to shoot themselves in the foot and let a $20,000 to $25,000 project slip away. HOW LONG SHOULD A FRANCHISE OPERATIONS MANUAL BE? I've
seen statements like "A good operations manual should be at least 500
pages long." Of course the support behind this assertion is not
included and it's just another bit of misinformation. I have edited very
professional operations manuals that are just under 100 pages in length
and do a very competent, professional job. I've also reviewed franchise
operations manuals that are volumes long and thousands of pages in
length.
There is no formula or true answer other than . . . it depends
on the business model and the life cycle of the business. Certain business models, restaurants for
example, require a lot more detail and can be lengthy. But I have come
across very good restaurant operations manuals that come in at under
200 pages. Other business models, education for example, require less
detail and can do a very adequate job at 100 pages or less. How long was
the original McDonalds franchise operations manual? Would it surprise you to
learn it was only 15 pages long? Of course, this was in an era when franchise companies did not have to disclose anything; there were no FDD's etc. Currently the Mighty Mac operations manuals are many volumes and thousands of pages.
HOW LONG DOES IT TAKE TO WRITE A FRANCHISE OPERATIONS MANUAL? There are online statements from franchise consultants that "It takes 300 to 1,000 hours to write it all down. Employing a franchise consultant to do it for you can free up that amount of time which you can then spend on further developing your business." Let's stop and apply a little common sense. The franchise consultant spends 300 to 1,000 billable hours that your company is paying, trying to learn your business from scratch and write it all down? And this frees you up to work on other parts of your business, no hand-holding or answering a barrage of consultant questions? Give me a break - it should be obvious to anyone with half a brain how ridiculous these statement are.
If you follow the three steps outlined below, you can produce a professional, customized operations manual, in-house, using your own team of experts in under 200 hours (4 to 5 weeks).
THREE EASY STEPS FOR DRAFTING AN OPERATIONS MANUAL:
1. Develop a Custom Table of Contents The
drafting process begins with planning and developing the Table of
Contents for your operations manual. The Table of Contents is ultimately based on the metrics of your particular business. A good starting point is a review of various tables of contents used either by competitors or companies in the same industry segment. From this review, you will get an idea of what should be included in an operations manual. We can obtain various tables of contents for your company to review as part of developing its own table of contents for your business model. For example, if you operate a restaurant, we can provide a sample restaurant operations manual table of contents. Or a learning center sample table of contents, etc. Click on the email link at the bottom of this page.
An important part of the Table of Contents planning process is making sure all
appropriate chapters and topics for the operations manual are included. But an absolutely critical part is ensuring that inappropriate subjects and topics are not included. Knowledge of both franchise management best practices and
franchise manual legal pitfalls is essential here. That's why a
seasoned franchise expert's input and planning is so important during this first step. A testifying franchise expert will know where the bullets come from in franchise litigation. As mentioned, franchise consultants and operations manual template companies, on the other hand, have absolutely no clue.
Also,
because the operations manual is incorporated by reference in the
franchise agreement (which is a franchise industry practice) it
becomes a living legal document, requiring legal oversight by a
seasoned attorney. Depending on content, certain parts of the operations manual may need to be disclosed in the various items of the FDD Franchise Disclosure Document.. The franchise contract is also reviewed with a
particular focus. 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 over to the operations manual or
appropriately amended.
2. Draft the Individual Chapters The second step is giving the person(s)
within your company who have drafting responsibility samples of
franchise operations manual writing styles, along with coaching on drafting techniques, guidelines and order of topics. The writing style for an operations manual is the first and principal difference to learn. In school, most of us learned the narrative writing style: the standard sentence-and-paragraph format. Its purpose is to impress the reader, and is usually descriptive, lengthy and complex. Letters and memos are common examples of narrative writing. Good for a letter or memo, but not effective for complicated and lengthy material. When you write an operations manual, an entirely different style of composition - technical writing - is required. Its purpose is not to impress, but to get a message across quickly and clearly. Technical writing is not rocket science. Technical writing rules, do's and don'ts, can be easily learned and applied. All that's required is some minimal instruction by us, what we call Technical Writing 101.
With these how to write an operations manual
instructions, your people 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. This is where over 90% of the work will be done as it should be, in-house, by your management team. Getting them to this starting point can be accomplished in a few hours of outside professional time.
3. Professional Editing and Review The third and final step is
having a 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 - franchise operator perspective.
It is also the time to make sure your operations manual will not get you into legal hot water down the road. This is where the remaining 10% of the time is spent.
Many of our clients comment on a positive byproduct of the
editing process. Based on the comments made and "what if" scenario questions asked as I
edit each chapter of their manual, the client considers and re-focuses the metrics of
their entire business model. The results in a stronger and more
competitive approach to both marketing and operations. In short, the final operations manual takes the entire business to a higher level. The manual also becomes a training and continuing reference tool for
managers and employees, allowing them to perform their tasks at a more
optimal and consistent level.
SUMMARY - IT'S LIKE RIDING A BICYCLE FOR THE FIRST TIME Like doing anything new for the
first time, the initial chapters are always the most difficult to
draft, as you or your management personnel learn and apply operations
manual drafting techniques using a technical writing style under the advice and guidance of a
professional editor. But writing a franchise operations manual is not
rocket science. After a brief, initial learning curve, it’s usually
smooth sailing through the rest of the document.
This approach produces
a professional, easy to use and update manual based on the best
knowledge and operational techniques known by the true expert in how to
operate your business - you and your management team. 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, but important
task. Following our recommended approach will entail paying an outside expert $2,000 or so.
Whether a company ultimately franchises or not, 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. It ensures consistent and uniform
operations, helping train personnel with different skills learn to
perform tasks in a consistent manner. This is important for any
business and more than justifies the investment of time and effort.
Also, once you've learned the technical writing style, this can be applied to other forms of communication and documents in your organization, with positive effects on clarity and understanding.
Finally, it's important to realize the process of writing your
operations manual never stops. As the business model evolves in
response to opportunities and threats, so must the operations manual –
the ultimate reason why writing the manual yourself to begin with makes
imminent common sense. As one franchise company's chief executive and
founder observed "I found that not only was writing my own operations manual a cost savings; it was imperative."
FOR OPERATIONS MANUAL PLANNING AND EDITING ASSISTANCE Send us an email.
Include whether you’re looking for help planning and developing or reviewing a
franchise operations manual or just a regular operations manual for a
non-franchised business, along with some background information about
your business. Also indicate if you're interested in a sample table of contents for your industry or type of business. We will respond promptly.
REVIEWING YOUR EXISTING OPERATIONS MANUAL If your company already has a franchise operations manual, we can review it. As a consulting and testifying franchise expert, I've encountered
franchise operations manuals and other factors that expose even some
fairly large franchise chains to unnecessary vicarious liability risk.
It's something worth looking into. Identifying and eliminating pitfall
areas makes a lot of sense from a cost-benefit standpoint.
"Enlarge the place of thy tent, and stretch forth the curtains: spare not, lengthen thy cords and strengthen thy stakes" Isaiah 54:2
Copyright 2010, Franchise Foundations, a San Francisco professional law corporation. The information you obtain at this franchise website is not, nor is it intended to be, franchise legal advice. You should always consult a franchise attorney - franchise lawyer for individual advice regarding your own situation and franchise disclosure documents. Use experienced FranchiseLawyers and FranchiseAttorneys for advice with your franchise legal documents and needs. Use an experienced MBA Franchise Expert for help with franchise consulting issues.
Last Franchise Website Update: April 8, 2010 Singapore
