Operation, Start-up and Policies & Standards (P&S) Manuals all have their place in the franchise system, but why must there be three separate documents and how does a franchisor know when to invest in the development of each? Manuals are communications tools. Franchisors should consider who will utilize the information (the audience), what information is provided (the purpose) and when to implement development of a manual (stages of the business lifecycle).
An Operation Manual is a playbook that clearly and concisely relates your business model and mission to others with the expectation to emulate your success. Instead of reinventing the wheel, franchisee employees in different locations can simply repeat the procedures successfully utilized in the system. The result: consistent customer service and brand uniformity.
In general, Operation Manuals are similarly designed to provide quick and easy access to efficiencies that relate directly to the franchise operators and their day-to-day informational needs. Information is presented in a “why, what and how” style. The intent is to provide the franchise owner/operator tools for communicating to the employee the reasons why a particular program or procedure is recommended, what the program/process/procedure is, and how to implement or “make it happen.”
In the Start-up stage of the business life cycle, an Operation Manual is typically composed of the following:
- Job descriptions
- Contact details
- Documented processes and systems/SOPs
- Occupational Health and Safety instructions
- Emergency procedures
- Company History
- Products and services
- Policy and standards
- Expectations for both franchisor and franchisee
- How to run every aspect of the business
- Training support
- Grand opening preparation
- Marketing guidelines
- Accounting guidelines
Collectively, that’s a lot of information in a single document that serves numerous purposes and addresses distinctive audiences; both franchisee and his/her employees. Regardless of the business life cycle stage, an Operation Manual is necessary to satisfy Federal Trade Commission franchise rules and show prospective franchisees the value of joining a well-designed franchise system.
A Start-up Manual has specific information necessary for the franchisee entering the franchise system for the first time. Separating the Start-up Manual from the Operation Manual isolates employee day-to-day information from franchisee business launch information; segmenting audience and purpose with less clutter.
A Start-up Manual is typically composed of, but not limited to, the following:
- Business formation recommendations
- Business forms and licenses
- Insurance requirements
- Site selection
- Initial expenditures(equipment, product, etc.)
- Payroll and merchant service set-up
- Employee training recommendations
- Grand Opening procedures and checklists
- Accounting recommendations
- Marketing strategies
- POS set-up
Typically, during the Start-up stage, with the guidance of the Operations Manual, a few franchisees will have been secured and businesses launched. The franchise system is beginning to generate a consistent income and with it, the confidence to take on more franchisees. Enter the Growth stage. Acquiring franchisees takes focus along with Start-up Manual development. Timing for documentation is good as “business opening best practices” probably received a few refinements during the Start-up Stage.
Policies and Standards Manual
While an Operation Manual is the “how to” resource for franchisee employees, a P&S Manual is the “must do “ resource for franchisees. As the franchise system expands with an increasing number of franchisees well into their Growth stage, policies and standards begin to take a stronger role to maintain compliance pursuant to the Franchise Agreement. Separating the P&S Manual from the Operation Manual isolates day-to-day information for employees from requirements and brand direction for the franchisee; again, segmenting audience and purpose with less clutter.
In the case of policies, a franchisee is required to adhere to the policy. In the case of standards, the franchisor is setting a goal for franchisees to attain. Policies and standards represent the best practices for the franchise system, create brand uniformity and establish a legally substantial compliance program.
While the Operation and Start-up Manuals require only periodic updates, the P&S Manual require frequent additions as the franchise system becomes increasingly intricate. With accumulating policies and standards, the brand becomes clearer.
Examples of polices and standards:
- Approved Products and services
- Warranty adjustment procedures between franchisees
- Image and upkeep expectations (housekeeping, uniforms, store hours, etc.)
- Licensed marks and trade dress
- Advertising requirements
- Inventory requirements
- Meeting attendance
There are three manuals to evaluate: each with their own solution.
Operations: multiple purposes for a collective audience if developed in the Start-up stage, or a specific purpose for a definitive audience if developed in the Growth stage
Start-up: specific purpose for the franchisee entering the Growth stage
P&S: specific purpose for the franchisee within the Growth stage
Before investing in any manual development, consider the current stage in the business life cycle, the audience and the manuals’ purposes. You might conclude that a single Operation Manual is appropriate in the Start-up stage or, if the business is approaching or within the Growth stage, having all three manuals would be of more value.