Want to save $20,000 or more that franchise consultants charge to write an operations manual? Already have an operations manual but want it reviewed by a franchise expert?
The information contained in the article below, based on experience reviewing and drafting hundreds of franchise operations manuals will do just that - and more.
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.
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
may seem 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. Intimidated by the franchise
industry's legal requirements, FDD franchise disclosure documents,
operations manuals, training programs, 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 or more to write the manuals, using franchise consultants
brings another, even more expensive result – legal risk.
WHY USING CONSULTANTS ARE RISKY BUSINESS Paying
someone who knows nothing about your business, and having them 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 a franchise
operations manual. It’s one of those little franchise secrets that
consultants, not surprisingly, don’t ever mention or discuss.
Using
a consultant to write a franchise operations manual or buying a template operations manual also carries 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 often are in franchise operations manuals,
very significant franchise liability issues arise. Because the
franchise consultants are not franchise attorneys or experts, they are
entirely oblivious to this risk. They don't know 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 manuals containing inappropriate
chapters or topics. The plain truth is franchise consultants don't even
bother to 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
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.
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 almost 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 in your
business write the manual. Typically that person is the founder of the
business, 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, the expert’s role should be carefully limited
to a planning and editing capacity. 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 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 that assertion is not
included and it's 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. Certain business models, restaurants for
example, have 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 under 100 pages. How long was
the original McDonalds operations manual? Would it surprise you to
learn it was only 15 pages long? Currently the Mighty Mac franchise
operations manuals are many volumes and thousands of pages.
THREE EASY STEPS FOR DRAFTING AN OPERATIONS MANUAL The
drafting process begins with planning and developing the Table of
Contents for the operations manual. This includes making sure all
appropriate chapters and topics are included, and the inappropriate
ones are not. 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. 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 parts 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.
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. With these how to write an operations manual
instructions, they 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. The first two steps can be accomplished in a couple of hours.
The third and final step is
having the 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.
Many of our clients comment on a unforeseen positive byproduct of the
editing process. Based on the comments made and "what if" questions asked as we
edit each chapter of their manual, the client considers and re-focuses the metrics of
their entire business model, resulting 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 level.
SUMMARY 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 and styles under the 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. 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. 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.
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. We will respond promptly.
"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. Our international franchise attorney San Francisco franchise lawyer and MBA franchise
expert assists you with how to franchise a business and franchising a
business, franchising vs. licensing, drafting a franchise operations
manual, buying a franchise opportunity, franchise analysis reports,
franchise due diligence, franchise relationships and franchise expert
consulting to avoid the scars of franchise litigation or resolve
existing franchise disputes, franchise litigation - franchise lawsuits.
The information you obtain at this franchise website is not, nor is it
intended to be, franchise legal advice. You should 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: January 4, 2010 Singapore
