Ready to Grow? How to Create a Franchise Manual

franchise manual

Any business considering adopting a franchise model will need a franchise manual. This lengthy document will define your franchise for employees and franchisees and give them an idea of how you expect it to operate. A detailed, easy to read manual will greatly reduce uncertainty and minimise the chances of miscommunication between you and your employees and franchisees.

Below is everything you need to know to create an effective franchise manual that will benefit you, your employees, and franchisees.

Describe the relationship in detail

One of the primary functions of a franchise manual is to ensure that franchisors, workers, and franchisees are all on the same page regarding what they can expect from one another. Everyone needs to be clear on what their obligations are and how the franchising relationship will benefit them.

This section should enable prospective business partners to familiarise themselves with the process of setting up a new franchise and developing it during its first few months of operation. Ensure you include all the information a franchisee needs to know to set up their business and hit the ground running.

Set out your processes and procedures

This part of your franchise manual should go over how your business operates on a day to day basis. Ensuring a uniform set of policies and procedures across the entirety of your business is an integral part of the franchising model. Any inconsistencies between franchises will undermine the integrity of your whole operation.

As well as covering the daily processes employees and franchise managers need to follow, this section should also set out your financial policies and procedures and how you will measure the performance of each business. For more complex processes, flowcharts can help make them easier to digest.

Give information about your brand identity and products

Effective branding is integral to the success of any franchise business. Of all the metrics that investors will judge franchise opportunities on, brand strength is one of the most important. The stronger the underlying brand, the faster and more reliably it can expand through franchising.

Your franchise manual should offer a detailed description of your brand and how you want it to be used by franchisees. This is also the part of the manual where you should set out your marketing guidelines. It is common for franchisors to handle global marketing while leaving it up to franchisees to tackle local marketing in their respective areas. However, you should set some ground rules so franchisees can market your brand appropriately and in a manner that fits with your established brand identity.

Highlight anticipated HR issues

Individual franchisees will handle the recruitment for their business, but you will still want to ensure that you have the right people representing your business on the frontline. Giving franchisees as much detail as possible about your recruitment and training processes will enable them to hire new workers with confidence and give you peace of mind that they will choose the right people.

You should also use this section to provide prospective franchisees with the names and contact details of the most important people in your business and make it clear who answers to who. A poorly defined corporate hierarchy and structure can create a lot of problems down the road.

If you regularly engage in audits, assessments, or any other monitoring of your franchisees, you should provide them with details about what to expect and how often these will occur. This document is also your opportunity to let franchisees know about any sanctions or other penalties they will face if they fail to meet pre-agreed performance targets. Make sure you highlight any KPIs that they need to stay on top of.

Conduct a document review

Before you start franchise advertising, it’s always important to have the right documentation in place, and the franchise manual is no exception. Before you publish your franchise manual and start handing it out to franchisees, make sure you have covered everything you want to and that the manual is easy to read and understand for someone who has no prior knowledge about your business.

You want to create a good impression with any new franchisees and set a standard that workers will adhere to. To that end, your operations manual should be presented professionally and should command the reader’s respect. Check it carefully for typos and factual errors; you don’t want to have to send out corrections later.

To be effective, your operations manual needs to strike the right balance between going into detail on all the information provided and remaining easy to read and understand. Operations manuals generally contain a significant amount of sensitive corporate information and should be protected accordingly. Be careful about sharing its contents with anyone who hasn’t yet signed a franchising agreement with you. You will often need to share at least some of your manual with potential franchisees who are still on the fence, but most people will be happy to sign a non-disclosure agreement first.