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Franchising is a great way to grow your already successful business across New Zealand. However, to do so, you must ensure that your franchisees have a clear understanding of their duties before running their operations. To ensure that your franchisees can operate a successful replica of your original business, you must provide a detailed blueprint for them to follow. You can achieve this by creating a franchise operations manual. This article will provide some background on franchise operations manuals and explain what details they should contain.

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What is a Franchise Operations Manual?

When developing your franchise, there are various documents that you will need to prepare for your franchisees. These may vary according to your legal needs, although it is likely they will include a:

  • franchise agreement;
  • franchise disclosure document; and
  • franchise operations manual.

An operations manual is an essential document that your franchisees will refer to frequently. It outlines the details of your franchise system and the various resources your franchisees will need to run a successful replica of your original business. In addition, your document should include instructions outlining the daily work that you must complete and the essential procedures that you must follow within your franchise business. 

Drafting a Franchise Operations Manual

The process of drafting a franchise operations manual can be quite complex. As a franchisor, there are many considerations outside of the simple operations of your franchise. For instance, there are legal requirements that your manual may need to meet according to the contractual terms of your franchise agreement. Additionally, you must consider whether your operations manual needs to align with any applicable law. A lawyer can help you draft your manual in a way that protects your franchise from legal liability and potential disputes in the future. Therefore, it is essential to seek specialist legal advice when drafting this document. 

While no franchise-specific law exists in New Zealand, laws that generally apply to business and commercial activity will apply to your franchise. Notably, these include:

  • contract law;
  • privacy law; and
  • employment law.

Furthermore, if you seek aid from specialist franchise consultants, they may be able to draft an initial operations manual for you. Be sure to read over what they create to ensure it applies to your franchise and its unique systems.

Do I Need a Franchise Operations Manual?

There are many reasons why you will need a franchise operations manual. However, most importantly, this document provides a standard set of rules and instructions for all your franchisees to follow. Correctly documenting your franchise system will minimise confusion and disputes amongst your franchisees as they will be operating from the same blueprint. 

Additionally, including sufficient details within your operations manual may reduce the necessary time to train franchisees. Finally, accurately constructing this manual will provide your franchisees with a document they can actively refer to instead of relying solely on their initial training. 

What Should My Franchise Operations Manual Contain?

As a franchisor, the content that you include within your franchise operations manual is your decision. However, to be successful, this document needs to reflect the particular details of your franchise. Additionally, it must include everything that a franchisee will need to know to run a successful business within your system. Therefore, it is important to tailor the document to suit your specific needs as a franchisor.

As a result, your operations manual will likely cover a range of topics, including: 

  • franchisee training;
  • employee training;
  • health and safety;
  • reporting requirements;
  • product and supply information;
  • pricing schedules;
  • ongoing systems updates;
  • technological tutorials for franchise software;
  • references to your franchise agreement;
  • legal compliance standards;
  • performance indicators;
  • privacy manuals;
  • instructions for operation; and
  • whatever resources a franchisee needs for your specific industry.

For instance, if your franchise is in a food-based industry, your operations manual may contain sections regarding recipes, food safety, and ingredient supply.

Constructing a franchise operations manual can ensure consistency in all areas across your business. Ultimately, your franchisees will be operating from the same blueprint. As a result, you must take the time to ensure your operations manual contains everything it needs for a franchisee’s success. Additionally, you should ensure that you keep this document up to date. Finally, you may ask a franchise specialist to look over the contents where required.

If you share your franchise operations manual with potential franchisees before purchase, ask them to sign a confidentiality agreement or other similar document. Doing so will ensure sensitive franchise information does not leak outside your network

Key Takeaways

In short, a franchise operations manual is an essential document for your franchisees. It ensures they are well aware of the workings of your franchise system and their obligations when running their business. Therefore, your manual should contain all of the information they need when running an installation of your franchise. Naturally, this will vary according to the details of your franchise systems. It is important that you seek specialist advice when writing your operations manual to ensure it contains everything your franchisees need.

If you need help drafting your franchise operations manual, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

What is a franchise?

A franchise is a business model that you may use to grow your business. As the franchisor, you will allow other parties, the franchisees, to replicate your business operations in various locations to create their success. As a result, you can grow your brand and receive various fees or royalties.

What should my franchise operations manual cover?

Your franchise operations manual should contain everything your franchisees need to know about running a franchise within your network. This document may contain sections regarding employee training, food safety plans, and customer service requirements.

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