What Is a Franchise operations manual?

A franchise operations manual is the primary document that governs the day to day franchise procedures and operational requirements. The manual should be specify in detail the procedures with which franchisees should comply in order to operate their franchise business. The most obvious benefit of the operations manual is that it allows franchisors to teach and implement the business system consistently for all franchisees.

Franchise operations manuals are essential to a franchisor because they act as a training tool for new franchisees. But most importantly, should the franchisor face a claim for franchisees’ errors, the document can serve as demonstrable evidence that the franchisee has received guidance on how to operate and use the business system.

Franchise operations manuals vary in length and content. Some franchisors may be able to prepare their own manuals, but due to the great importance of the manual, franchise consultants are often engaged for this purpose.

Franchise operations manual will address for example, the following categories:

  • Training of new franchisees.
  • Support and references for established franchisees.
  • Quality control documentation to enforce standards.
  • Suggested retail prices.
  • Marketing.
  • Approved Suppliers.
  • Overview of responsibilities – descriptions and specific details of the franchisor’s standards of operations.

There are two prominent areas which may be included in an operations manual, namely:

  1. Operations and procedures
    (which product or service and manner on how it is sold or presented)
  2. Administrative Controls
    (marketing plans, management costs, business planning and equity goals).

Writing a manual isn’t just a matter of writing down what is seen. To document an operating system, there should be adequate time, resources and materials. It is strongly recommended that the franchisor update the operations manuals frequently to ensure effective development and improvement of the franchise system.

More information about Franchise Law:

Franchising – Franchising means the licensing of a franchisor’s business model to a franchisee. The franchisor appoints franchisees to expand its business by means of separate and individual franchise outlets. The franchisor’s success will depend on the success of the franchisees as well.

Franchising in South Africa – When the franchisor grants licensing rights to a franchisee to use the franchise business system. The franchisor will remain the owner of all intellectual property rights surrounding the business system.

Franchise Operations Manual – A franchise operations manual is the primary document that governs the day to day franchise procedures and operational requirements. The manual should be specify in detail the procedures with which franchisees should comply in order to operate their franchise business.

Franchising Legal Advise – Franchise law is specialised and differs from other areas of law, thus you need find yourself an attorney that specialises in this specific type of law. Franchise attorneys represent the franchisor, as well as the franchisee. Smit & Van Wyk, Inc. specialist franchise attorneys  provide both franchisors and franchisees assistance and legal advice.

Franchise Attorneys – Esmari Jonker is an Attorney of the High Court of South Africa with more than 16 years experience with franchise agreements (franchise contracts), litigation and intellectual property. She acts on behalf of local as well as international clients in the franchise industry.

Buying a Franchise – Rather than starting your own business, you can purchase an established successful business franchise. Buying a franchise has it’s advantages and disadvantages, but it is at least a path to self employment. Before you invest, make sure you do a lot of investigating and preparation.

Starting a Franchise – A business that has set out its systems and procedures, and is trading profitably, may choose to start a franchise. Successful franchising is difficult but if you want to expand your business to its’ maximum size and profitability, you may wish to franchise your business. If you are the franchisor you may benefit from additional profits and you may retain control over your business system.

Franchise Agreements – Are you a business owner and want to start franchising, or do you want to purchase a franchise from an existing organization? Regardless, if you are entering a franchise relationship, you will need a franchise attorney to setup the franchise agreements and other legal documents. The franchise relationship between a franchisor and franchisee will mostly be controlled and governed by a franchise agreement.

Franchise Attorneys – How a franchise agreement is setup depends on the type of franchise. Each franchise agreement will have provisions that include royalty payments, franchise location, design, products, operations, insurance, and duration.

Franchise Agreements in South Africa – Principles like fixed pricing structures and the definition of exclusive franchisee territories are contrary to the provisions in the Competition Act. Similarly, principles like restrictive purchase conditions are contrary to the provisions in the Consumer Protection Act.

About the Franchise Agreement – A franchise agreement is in essence not defined in separate category of law, but is governed by existing law of contracts.  More specifically, a franchise agreement is a licence agreement whereby certain intellectual property is licensed by a franchisor to a franchisee.