Documenting Your Business for Franchising

By Marla Rosner, Senior Learning & Development Consultant, MSA Worldwide

If you are contemplating franchising your business, one of the essential tasks will be to document your operation for the purpose of guiding franchisees about how to meet your standards and execute the brand with integrity. While you may have heard that franchises require Operations Manuals, documentation may be a task that you imagine confronting “sometime in the future” – after that dental surgery, a trip to the Bahamas, or hiking Kilimanjaro, for example.

Aversion to the task is understandable. It takes dedicated time and resources to create your first set of manuals, and this inevitably competes with the day-to-day operation of your business. Yet, if you wait too long, you will find that the documentation process may slow you down – significantly – once you’re ready to move forward with franchising.

Many business owners heading toward franchising have difficulty documenting their business, but it’s a hurdle that’s worth the hassle; your franchise manual library serves as the DNA for the replication of your concept. While there are other ways to convey the standards and core procedures of your brand, e.g., classroom training, webinars, videos, etc., these all build upon the content written in the Operations Manuals. Your franchise system’s library of manuals becomes the core reference materials for both franchisees and corporate personnel.

What Is Included in Franchise Manuals?

Think in terms of a library of manuals – not just one. This enables you to break content into the most user-friendly organization, with appropriate information distributed at the right time to the right people.

Brick-and-mortar businesses require a minimum of two manuals in franchising:

• A Start-Up Manual addresses all activities required of franchisees from the time they sign their franchise agreement, to the time they open their doors for business. Its purpose is to provide clear instructions about site selection and build-out requirements and approvals, pre-opening marketing, timelines, and a host of other administrative launch details.
• An Operations Manual addresses franchisees’ obligations in the areas of brand standards, and any critical procedures that may apply to meeting those; financial management, including reporting and fees due to the franchisor; and marketing requirements and approvals, among other topics.

Additional manuals may include:

• Employee Training Manuals: Because the franchisor wants to enable franchisees to effectively train their personnel, most franchisors also develop material that franchisees can adapt for new employee training. Note: It is generally the franchisee’s job, not the franchisor’s responsibility to train employees. Within the limitations we are anticipating flowing from the National Labor Relations Board (NLRB), franchisors will likely be focusing more on training their franchisees’ management teams and, through them, their staff.
• Architectural Guide: This is created by an architectural firm and provided to franchisees for their architect to adapt for their site.
• Local Marketing Manual: This includes sample local marketing tactics and addresses how to use them.
• Brand Guide: This includes specifics about what is and isn’t permissible regarding logo usage, tagline usage, etc. Any established formats, colors, and sizes of the visuals associated with the brand are included here. This is often combined with the above Local Marketing Manual.
• Prep, Recipe, and Build Manuals: This includes detailed recipe information and may also include how the plate is assembled/presented.
• Food Safety Manual: This includes food safety and sanitation for food and beverage management and employees.
• Technical Manual: Instructions related to building or assembling the product or implementing a service, e.g., painting, lawn fertilization, tiling, etc.

What Should You Do Now?

If you are aspiring to become a franchisor, but have not yet developed the associated legal documents, you can and should begin making progress on documenting processes and procedures in the areas above that relate to your business. For the Start-Up Manual, start gathering the following information:

• Square footage requirements
• Electrical and plumbing requirements
• Equipment requirements and vendor contacts
• Furnishings and vendor contacts
• Signage and vendor contacts
• Smallwares and vendor contacts

If you have records for these items, sift through them and you’ll be ahead of the game. If you also happen to be opening another location now or in the near term, make notes of all criteria you are using in selecting a new site, as well as what costs are involved. While the latter does not need to be in a Start-Up Manual, you will be asked for estimates of opening expenses for the creation of your legal documents.

For an Operations Manual, start establishing standards for your brand, if you haven’t already. Are there time standards for service or product delivery? Are there methods or procedures that must be used to ensure a quality product or service? If yes, then write down the steps. Start creating checklists for daily procedures that future franchisees (or your own managers at other locations) can use to easily systematize operations. Are there scripts your team uses for sales visits, or phone scripts for greeters? If you have an approach that works with prospects and customers that represent your business well, document this with the aim of sharing it with franchisees.

What if You Already Have Training Material?

If you are the rare entrepreneur who has already developed training material for your personnel, whether in writing, webinars or videos, congratulations! You have a leg up in providing important resources to your future franchisees. They can adapt them for use with their employees. In this case, you would cross-reference these materials in your Operations Manual, and provide them to franchisees with appropriate caveats that acknowledge that the franchisee, not the franchisor, is the employer of his or her crew.

While documenting your business is time-consuming, it is a necessary investment for franchising. Importantly, even if you opt not to franchise, your operation will benefit substantially by having written training tools for replacement managers and for opening new locations on your own.