 The content of a custom Franchise Operations Manual is usually more complicated

than most people realize.

 The outline below is only a SAMPLE outline that we use as a starting point to create
your custom outline.
 In the case of a manual rewrite, we would use your existing outline as a starting point
and then draw from this outline for missing headings or content.

1. INTRODUCTION TO THE MANUAL

 Manual Organization
 Ownership of the Manual
 Purpose of this Manual
 Importance of Confidentiality Keeping the Manual Current
 Submitting Suggestions
 Disclaimer

2. INTRODUCTION TO YOUR FRANCHISE SYSTEM

o Welcome Letter
o History of the Company
o Who to Call
o Overview of Services Provided to Franchisees
 Site Selection
 Lease Approval
 Initial Training
 Other Initial Support
 Grand Opening Support
 Ongoing Training and Support
 Suggested Retail Prices
 Approved Suppliers
 Marketing
 Internet
o Overview of Your Responsibilities
o Visits From Us
o Fees

3. PRE-OPENING PROCEDURE

o Introduction
o Establishment Of Business Form
 Business Structure
 Overview of Entity Choices
 Liability Protection
 Income Taxation
 Administration
 Other Factors in Entity Choice
 Bottom Line
 Where to Form Your Entity
 Naming Your Entity

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  Assumed Name Certificate
o Site Selection Process
 Site Selection Criteriaa
 Market Analysis
 Seeking Approval of Proposed Sites
 Lease Considerations
 Seeking Approval of Lease
o Licenses, Permits and Taxes
 Introduction
 Business Licenses and Permits
 Optional Certifications
 Tax Registrations and Payments
 State Information Web Sites
 Additional Resources
o Training
 Scheduling Initial Training
 Initial Training Program
 Food Safety Training
o Setting Up Your Facility
 Building Out the Facility
 Construction Specifications
 Required Fixtures, Furnishings, Equipment and Services
 POS and Computer Systems
 Sign Requirements
 List of Approved Suppliers
o Initial Inventory and Supplies
 Required Items
 List of Approved Suppliers
o Utilities / Services
o Uniforms
o Bank Accounts
 Main Business Account
 Operating Account
o Insurance Coverage
 General Insurance Requirements
 Minimum Coverage Amounts
 Insurance Company Requirements
o Grand Opening
 Notification
 Two Weeks Out – Direct Mail
 Soft Opening – Publicity
 Week One
 Week Two
 Week Three
 VIP Invites
 The First Company Meeting
o Pre-Opening Checklist

4. PERSONNEL

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o Introduction
o Employment Law Basics
 Employee Rights / Employer Responsibilities
 Federal Regulations on Employment Relationships
 State Employment Laws
o Preparing to Hire Your First Employee
o Job Responsibilities and Ideal Employee Profiles
 Responsibilities
 Profile of Ideal Employees
 Job Descriptions
o Recruiting Employees
 Sources of Employee Candidates
 Job Advertisements
 Requirements to Advertise Open Positions
o Job Applications
 Application Form
 Confidentiality of Applications
o Interviewing Job Applicants
 Preparing For Interviews
 Conducting Successful Interviews
 Questions to Avoid
o Background Checks on Job Applicants
 General Tips on Background Checks
 Special Rules for Certain Records
o Pre-Employment Testing
o Miscellaneous Hiring Issues
o New Employee Paperwork
o Additional Steps in Hiring Process
o New Employee Orientation
o New Employee Training
o Personnel Policies
 Introduction
 Communicating Work Rules
o Paying Your Employees
 Wages
 Minimum Wage
 Benefits
o Employee Scheduling
o Employee Management Forms
o Employee Morale / Motivation
 Introduction
 Factors of Good Morale
 Signs of Bad Morale
 Improving Morale and Motivation
o Performance Evaluations
o Employee Discipline
o Resignation / Termination
 Resignation
 Termination

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  Post-Separation Procedures
 Final Paychecks
 Explaining Termination to Other Employees
 Giving References
o Summary of Good Employee Management Practices
o Getting Legal Help with Employment Law Issues

5. DAILY OPERATING PROCEDURES

o Introduction
o Required Days / Hours of Operation
o Customer Service Procedures
 Customer Service Philosophy
 Customer Feedback
 Customer Complaints
 Our Customer Complaint Policy
 Refund Requests
o Miscellaneous Customer Services
 Dry-Cleaning
 Lost and Found
o Service Procedures
 Greeting Customers
 Answering the Telephone
 Atmosphere
 Understanding the Product Offerings
 Working / Interacting with Customers
 Job Descriptions
 Suggestive Selling Techniques
 Passive Selling Versus Active Selling
o Merchandising Procedures
 Visual Merchandising Standards
 Merchandising Products
 Using Signage
o Meal Preparation Procedures (This section would apply only to food service
businesses)
 Prepping Procedures
 Setting Up Preparation Stations
 Recipes for All Items
 Preparation Procedures for All Items
 Maintaining Inventory
 Dishwashing / Sanitation Procedures
o Opening / Closing Checklists
 Opening Checklist
 Closing Checklist
o Transacting Sales
 Entering Orders Using the POS System
 Cash Handling Procedures
 Accepting Personal Checks
 Accepting Credit Cards
 Suggested Prices

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 o Gift Certificates
 Issuing Gift Certificates
 Redeeming Gift Certificates
o Inventory Management
 Product Ordering Procedures
 Ordering from Approved Suppliers
 Changing Approved Suppliers
 Product Receiving Procedures
 Storing Procedures
 Labeling and Rotating Inventory
 Spoilage
o Operational and Financial Reporting
 Features of the POS System
 Generating Reports
 Analyzing Reports
 Sample Reports
o Franchise Fees and Reporting Requirements
 Royalty Payment
 Marketing Fee
 Required Reports
 Financial Statements
o Loss Prevention Techniques
 Cash
 Inventory
o Required Cleaning and Maintenance
 Daily Cleaning and Maintenance
 Weekly Cleaning and Maintenance
 Monthly Cleaning and Maintenance
o Safety Procedures
 Preventing Accidents and Injuries
 Crisis Management Policy
 Reporting Accidents
 Worker’s Compensation Issues
 Fire Safety
 Robbery / Burglary
 Unruly Customers
 Using the Alarm System

6. SALES PROCEDURES

o Introduction
o The Sales Process
 Identifying the Customer’s Needs
 Building Rapport with the Customer
 Handling Objections
o Understanding Your Competition
o Competitive Advantages

7. MARKETING

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 o Promoting our Business in Your Area
 Your General Obligations
 Guidelines for Using Marks
 Marketing Standards
o Logo Specifications
o Required Marketing Expenditures
 System Marketing
 Local Marketing Requirements
 Regional Cooperative Advertising
 Grand Opening Marketing
o Local Marketing
 Introduction
 Direct Mail
 Radio
 Television
 Billboards
 Magazines
 Newspapers
 Yellow Pages
 Internet
 Networking
 Word of Mouth / Customer Referrals
o Public Relations / Community Involvement
 Press Releases
 Better Business Bureau
 Local Chamber of Commerce
 Team Sponsorships
 Community Service / Charitable Activities
o Obtaining Marketing Approval

8. ADDITIONAL RESOURCES

o Web Sites For Small Businesses

o Web Sites For Organizations
o Web Sites For Employment Laws
o Web Site For Tax Information

9. MANAGEMENT DOCUMENTS

o Daily Cash Sheet

o Absence Policy
o Applicant Information Release
o Sample Applicant Rejection Letter
o Sample Applicant Acknowledgment Letter
o COBRA
o Sample Collection Letter
o Time Spent During Work Hours
o Customer Satisfaction Survey
o Discipline Documentation Form

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 o Drug Test Consent Form
o Electronic Funds Transfer Authorization
o Emergency Instructions
o Job Application
o General Work Rules
o Holiday / Vacation Policy
o Restroom Inspection Worksheet
o Sexual Harassment Policy
o Smoking Policy
o Termination Meeting Checklist
o Employee Time Records
o Checklist For Handling Workers’ Compensation Claims
o Workplace Safety Rules
o Employee Data Form

10. Others
 This part is divided into business-specific procedural sections generally covering:
 Opening days/ trading hours
 Detailed job descriptions for each member of staff
 Staff training
 Employee standards (i.e. clothing and appearance)
 Employee hiring procedures
 Rules and disciplinary procedures
 Occupational health and safety regulations and standards
 Pricing policy requirements and recommendations
 Supply policies
 Product/Service quality standards - including complaint procedures
 Accounting – a detailed description of the accounting standards to be used by the
franchisee and the financial information that should be provided to the franchisor.
You should specify the methods of collecting and keeping relevant financial
documentation by the franchisee
 Franchisee fees – a detailed procedure for calculating the fees the franchisee is
contracted to pay to the franchisor, including templates of any specific related forms
 Cash-flow control and banking procedures. This includes procedures for handling
checks, digital payments and credit cards
 Insurance policies – details of any insurance program offered through or by the
franchisor; specific requirements the franchisee must include in a policy
 Inventory control procedures
 Advertising and marketing – basic marketing tips and sales techniques used within the
franchise system; point of sale advertising; description of public relations activities
used by the franchise system; instructions on how to organize a promotional campaign
for the grand opening of the franchise
 Requirements for the use of trademarks by the franchisee or any other branded
signage distinguishing the franchise system; full description of the ‘corporate identity’
of the franchise system
 A list of basic legal requirements the franchisee should know

 Services by franchisors

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  Preliminary services for the franchisee (before opening the business)
 Intensive training program covering:
o Products/services offered by the franchise
o Market competition information
o Marketing techniques
o Recruitment and training methods
o Accounting and reporting
o Supply management
o Computer hardware and software
o Service and maintenance of specialised equipment
 Help in choosing a site location
 The franchisor is usually more aware of the geographical demographics that should be
met for the franchise to successfully operate
 Aiding in the construction or renovation of the premises. (A uniformed concept
generally works best for a franchise network. It minimises any disputes and normally
works out to be both faster and cheaper to set-up)
 Ordering and installation of equipment
 Ordering the first delivery of products
 Provisioning of the relevant software
 Staff recruitment. (Many franchisees can lack experience in conducting job
interviews)
 Assistance in organising the promotional campaign for the grand opening of the
franchise
Ongoing services (after the franchise launch)

 Regular visits and advice from a franchisor representative

 Training for new employees of the franchise
 New product research and development. Also, new marketing strategies (many
franchise systems have increased their market share after adopting new concepts
suggested by their franchisees)
 Joint purchasing programs for products and services from third-party vendors
 Advertising and public relations campaigns organised for the entire franchise system
 Providing uniformed promotional materials for use at the franchise outlets
 Organisation of the participation in fairs
 Implementation of uniformed procedures in customer service (customer relationship
management)
 Regular joint franchisee system meetings. Creation of an intranet network. And, or the
publishing of a regular corporate newsletter or magazine.
 Development of a website that provides central access for the franchise network. A
great way to back up important information contained in operation manuals - or to
provide the updates of the operation manuals themselves

Franchise fees

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The franchisor’s revenues gained from the licences granted to use the franchise package
usually bare the following three forms:

 Initial franchise fee (otherwise referred by the initial franchise fee)

 Current franchise fee (ongoing franchise fees or royalties)
 Contribution to a joint marketing fund (advertising contribution/fee)

Initial franchise fee

Trying to calculate the initial franchise fee isn’t always a strict financial equation. The right
fee to charge is generally influenced by the following factors:
 The nature and scope of support being implemented to franchisees in the form of
both initial services and ongoing services
 The cost of these support brackets for the franchisor
 Funds at the disposal of the franchisee
 Comparative initial franchise fees charged by competitors
 Value of the trademark and know-how of the franchisor
 Attractiveness of the concept and business
 The size of the area the franchisee operates
 Terms of the franchise agreement