DEVELOPING A GOOD MANUAL

There are nine steps in developing a good manual:

• 1.outlining the system;
• 2.creating a system questionnaire;
• 3.engineering the system;
• 4.indexing the manual;
• 5.structuring the manual;
• 6.manual writing style;
• 7.responsibility for policies and procedures;
• 8.appendices and forms;
• 9.review of the documented system.

1. Outlining the system

First, consider all the aspects of your business that you need a franchisee to copy or to understand.

Arrange them first by operational function such as set-up, operations, marketing, etc., then, within each function, arrange systems in the order that a franchisee would naturally use them so that the manual is easy to refer to.

For example, under ‘set-up’ you might start with ‘Finding premises’, then ‘Acquiring premises’, ‘Building works and decoration’, ‘Installation of equipment’, and so on. The last chapter in such a section might be ‘Opening your doors to the public for the first time’ and the first chapter in the next section, if it was ‘Day-to-day operations’, might be ‘Greeting customers’.

Then create the sub-systems under each chapter. For example, under ‘Finding premises’, you might list the subjects ‘How to search’, ‘Specifications of approved premises’, ‘Premises appraisal checklist’, ‘Creating a shortlist’, ‘Headquarters visits to appraise your shortlist’, ‘Getting our approval for your selected premises’, etc.

You should end up with what looks like a list of contents for your manual, probably some 40 to 60 pages long.

In fact it’s more important than just an index to your future paperwork; it is a list of all of the elements of your business that you must:

• design systems for (if they don’t exist);
• refine in your own business to meet the standards that franchisees expect;
• learn and create – because you didn’t need them before franchising;
• support in your new role as a franchisor.

Don’t worry if you have to change or add to this list as you develop your new systems or refine existing ones. Manuals should be ‘living documents’ and it is normal that your outline will change.

An example of a good outline is shown on page 120.

2. Creating a system questionnaire

As you should now have a fairly comprehensive list of the aspects of your business that you need to include in your system – and eventually in your manual – you will be able to start delegating the completion of different sections to your staff and your franchise consultant.

One of the most efficient ways of doing this is to create a long questionnaire based on your outline. This helps you ask yourself and your team the right questions and makes it easier for others to get back the information you really want.

If any part of the questionnaire is left blank or comes back with the answer ‘.. .don’t know’, then you probably need to create a system or policy that does provide an answer.

The following is an example from such a questionnaire that you might send to your marketing department:

*		Level
		0	I	II	III	IV	V	Question/answer
Who	Section							SECTION F – MARKETING, SALES AND COMMUNICATION
M	F	4						What is our marketing philosophy for the network?
M F	F	6						Who pays for marketing and advertising? Please list by every type of marketing activity that we are involved in.
								Are there any marketing or promotion activities that we would ever ask contractors, recruiters or end clients to participate in?
								How much of their revenue do you expect franchisees to reserve for local marketing? (Irrespective of any advertising levies that they may pay us.)
								What national advertising do we actually do? (Or plan to do?)
								Etc.

3. Engineering the system

The manual itself is less important than the systems that it documents. You should engineer your systems around your experiences with your first franchisees and what they really need.

The aim of the best franchise systems should be to create working practices, policies, procedures, tools, and training that help your business and the businesses of your franchisees ‘run by themselves’ without anyone ever needing to refer to the manual.

Creating the manual is an inherent part of engineering a good system because it helps you map out what you need to get done, and what you need to train and support franchisees. It then documents those things, so that you know what you have implemented or planned.

4. Indexing the manual

When putting together a manual it is important (if it isn’t automatically updated and interactive) that you index every page. This is so that you can easily instruct franchisees what pages to replace when you send them updates.

An example of a page-header index might be:

FRANCHISOR NAME	Subject:	Franchisee Operations Manual
Date:	01/2007	Issue/Rev:	01	03
Section/Title:	B Concept	Responsible:	AB/CD & EF	Page 49 of 579

5. The structure of a good manual

A good franchise consultant has the experience to help you design your manual to cover all the subjects that a franchisee would expect or need to be advised on and those subjects that require policies for effective franchisee management.

A modern franchise manual might contain all of the following:

SECTION A MANUAL CONTROL AND CARE

The administrative and document-control paperwork that precedes the contents pages of any manual.

SECTION B INTRODUCTION TO THE CONCEPT

A section that hopes to provide franchisees with an overall understanding of the concept, rather than launch them into the detailed operations sections.

SECTION C CORPORATE IDENTITY AND USAGE

This section documents the importance of the brand and the policies and procedures that are in force to protect it for the benefit of everyone involved in the network.

SECTION D PRE-TRADING MANUAL

This section assists franchisees through the process of starting up as a new franchisee in your concept and launching their new business.

SECTION E OPERATIONS (THE SYSTEM)

This section forms the ‘meaty middle’ of any manual and documents the way that you work, and the way franchisees are expected to work, to serve your customers properly and to help ensure franchisees’ profitability.

SECTION F MARKETING, SALES AND COMMUNICATION

This section documents how to use marketing and communication effectively to increase sales, and details the sales processes and standards that franchisees are expected to use.

SECTION G QUALITY AND CUSTOMER CARE

This section documents the importance of delivering the system’s products or services to the required standards.

SECTION H GENERAL ADMINISTRATION

This section contains the detail of running the administration of the franchise and dealing with office management, records, accounts and banking, compliance and so on.

SECTION I HUMAN RESOURCES AND RECRUITMENT

This section shows franchisees when and how to recruit and manage staff and handles their contracting, induction training, payment, treatment and discipline.

SECTION J TRAINING

This section documents the training programmes and policies and often replicates the induction-training programme that you gave franchisees for their use in training their future staff.

SECTION K FRANCHISE COMMUNICATIONS

This section documents policies and procedures that are imperative in maintaining a good relationship for mutual success between franchisor and franchisees.

SECTION L REALISING THE VALUE OF YOUR INVESTMENT

This section documents the pros and cons of franchisees selling their franchise in the future, how to build it into an asset that is worth something, typical calculations for valuation and the process that must be followed should they ever wish to sell.

APPENDIX 1 STANDARD FORMS

This is an appendix holding copies of all the forms, letters and standard documents contained within or referred to by the manual. It is used both as a reference and as a master document to make copies from as and when franchisees need them.

APPENDIX 2 EMPLOYEE HANDBOOK

Herein franchisees should find a copy of the handbook that they are to give to every member of their future staff.

APPENDIX 3 DIRECTORY OF CONTACTS AND PNS

This details all the useful contacts at your head office, among the network and at large. It also details any preferred nominated suppliers (PNS) that you prefer franchisees to use, and the specifications of supplies that they are already authorised to make available to franchisees.

6. Manual writing style

Manuals should be written in plain language that is clear, concise and unambiguous.

The manual writing style needs to be professional but it should reflect the attitude, character, philosophies and values of the business.

7. Responsibility for policies and procedures

There are aspects of your franchisee’s business that are just that – their business.

If you suggest in your manual that your franchisees adopt certain tax, data protection, health and safety or employment practices and they turn out to be inappropriate for their size of business in their location, you might end up in a questionable position over who is responsible for their actions should their implementation of those policies end up in criminal prosecution or legal action.

It is often better to outsource advice on these matters to relevant professionals who will be aware of these sorts of issues and how to avoid them. A list is available from the Franchisee Support Centre.

8. Appendices and forms

Franchisees, like most of us, hate administration. They want to get on with making money not filling in forms.

A good manual probably won’t need more than ten forms, especially if you ask for formal communication on most issues requiring approval by a simple letter or e-mail.

9. Review of the documented system

Once your manual is complete it is important to review it in the following ways, for the following reasons:

• 1.Read through it carefully yourself, so that you can:
  • understand what you have promised to franchisees in the manual;
  • see what elements would benefit the rest of your organisation if implemented there;
  • mark the systems that are as yet untested and that you will monitor to ensure their effectiveness.

• 2.Pass a copy to every department in your organisation (confidentiality permitting) so that they can:
  • confirm that the contents are accurate for their function;
  • agree that they can do or supply what the manual requires of them;
  • implement new systems that are promised in your manual.

• 3.Test it with initial or pilot franchisees, so that you can:
  • fine tune it to work with future franchisees;
  • roll it out as a proven system;
  • develop further or discard the aspects that were a ‘good idea at the time’ but really don’t work in practice.

• 4.Periodically review the manual, so that you:
  • can keep it up to date.

HOW TO PROTECT YOUR MANUAL

Once you have completed a comprehensive manual, it should cover all aspects of duplicating your business successfully – including all of your trade secrets, tips and tricks. Unfortunately, this will also mean that any competitor that gets hold of the manual could use it to reduce the gap of competitive advantage between you and them.

Of course, you shouldn’t keep your trade secrets from your franchisees because these secrets are part of the reason that they have bought into your franchise. On the other hand, there are several ways that you should consider protecting your most important trade secrets.

• Copyrights – you should make your copyright clear on every page of the manual and lodge one copy with a solicitor so that they can verify when it was authored. Unfortunately, the sheer volume of most manuals, the fact that much of what they contain will be in the public domain anyway and the ease with which they can be transliterated all reduce the power of protection that you will enjoy by copyrighting. Anyway, once your ideas are out, a copyright does more to protect the way in which the ideas are written down than to prevent someone else implementing them.
• Registration – you should register each manual with its own serial number on every page, so that you will know which franchisee had allowed it to be copied. If the serial number is preserved on the copies, you will know which franchisee allowed it to be copied.
• Watermarking – you can physically or electronically watermark each page so that it is clear that you were the author of any copies. To be a little more devious, you might subtly change one or two words on each page and register who was given which version.
• Distributing the manual in unprintable versions – if you distribute your manual electronically you might want to make it unprintable (except for forms). You should also make it locked for editing, so that there is less risk of someone else changing it and passing it off as their own. Be careful, if you lock a document for editing in Microsoft Word, one still may be able to ‘copy and paste’ from that document to a new document and retain all formatting and structure – Adobe Acrobat Writer makes this more difficult. Properly hacker-protected online interactive versions of your manual will also be less easy to copy and edit.
• Recording interactive access to the manual – if your manual is online and interactive through your intranet or extranet, you could record who accessed what and when. By doing this you can monitor, or get your systems to flag up, abnormal access to the manual.
• Signing up franchisees’ staff to non-disclosure agreements – make sure that a franchisee’s staff are contracted not to reveal the contents of the manual or to copy it.
• Giving the manual at the right time – never hand out your manual to a prospective franchisee who has not signed up to your franchise agreement and paid their joining fee. To go one step further, it may also be advisable only to hand the manual over to a franchisee once they have successfully completed each section of training.
• Disseminating some trade secrets outside the manual – if you believe that some of your trade secrets are so valuable that they shouldn’t be recorded in the manual, you might pass them on to your franchisees in other ways – verbally through training, for example.
• Protecting some trade secrets in systems – some of your trade secrets may be so sensitive that you want to guard them from franchisees. You might be able to find ways to protect such secrets through your system by managing them centrally. For example, if you had a secret recipe sauce, you might supply that sauce to your franchisees, rather than have them make it from scratch in their store. Or, to give an example in a service business, if you had a loans business and your competitive advantage rested on your relationship with lenders, you might take on the underwriting role at your head office and forbid franchisees from dealing directly with those lenders.