If you’ve decided that it’s time to franchise your business concept, you probably know or have been told that you need to write a Brand Standards Manual, also known as an Operations Manual, that describes your franchise system standards. This Manual will be one of the most valuable assets to your franchisees. While your initial training program will instruct franchisees in the operation of their franchised businesses, after the training, franchisees will refer to the written or electronic Brand Standards Manual regularly to refresh their memory on what they learned at that training.
Writing a Brand Standards Manual may seem like a daunting task, but in many cases much of the information needed for it is already contained in your databases, or scattered across emails and documents. For example, a contact list of suppliers and vendors and operating procedures will all become part of the Manual. Startup franchisors should begin by gathering these emails and documents.
What is a Brand Standards Manual?
A Brand Standards Manual is a document (either written or electronic) that contains all the information necessary for a franchisee to meet the standards required by the franchisor in the operation of their franchised business. In layman’s terms, it is the lines within which the franchisee must operate their business. It should contain detailed required and suggested procedures, standards and other minimum requirements instructing the franchisee in the operation of their business. A well-written Manual will be a tool the franchisee can consult on a daily basis.
Why is a Brand Standards Manual Important?
As a franchisor, you’ll be managing several aspects of the business to make sure you’re growing your brand and supporting franchisees. A carefully-drafted Brand Standards Manual will not only make you more efficient, but it will also create consistency in the customer experience across your brand. How, you ask? The more detail in your Manual, the less time you will need to spend answering franchisee questions related to operations or correcting a franchisee’s inappropriate procedures.
The Manual is a living document—you can add to, delete from, or otherwise update at any time to impose changes to the system necessitated by changing circumstances so long as your Franchise Agreement has been drafted in such a way as to give you this right. For instance, the franchisor should keep a continuously updated list of approved suppliers and vendors in the Manual.
What Should be Included in the Brand Standards Manual?
The Manual should address the operational and quality standards the franchisee must meet in the operation of their franchised business. When the Franchise Agreement refers to compliance with the franchisor’s standards, those standards should be contained in the Manual.
The Brand Standards Manual commonly addresses the following subjects: franchisor’s mission and goals (culture); construction; approved suppliers and vendors; how to deliver products/services; marketing and advertising; reporting requirements; insurance; apparel; opening; hours of operation and any other obligations identified in the Franchise Agreement.
- Company’s Mission and Goals. A detailed description of the business plan including the company’s story, an overview of products and/or services offered, a description of the customers, and specific brand promises or expectations.
- Approved Suppliers and Vendors. This includes a list of the contact information for suppliers and vendors that have been approved by the franchisor.
- How to Deliver Products/Services. This includes the actual steps of delivering the products/services and how to deal with the public, including, how to develop new products/services and detailed steps of any processes specific to delivering your products or services to ensure a consistent brand experience across all locations. For example, how to answer the phone, how to deal with customers, and how to address customer complaints.
- Marketing and Advertising. This includes best practices for advertising and marketing, suggestions of various media available, and your experience in the best use of the franchisee’s local advertising dollars. Also, if there are any limitations on advertising those should be listed. Your Manual should also include similar information for social media and public relations activities.
- Reporting. This includes detailed bookkeeping and accounting procedures or requirements, administrative and reporting obligations, required forms, and detailed instructions regarding the form, manner, and frequency of reporting.
- Other Obligations Under the Franchise Agreement. This includes a detailed description of the required equipment/software, insurance requirements, other best practices, etc. that are specific to your franchise system.
Topics to Avoid
While the list above is certainly not all-inclusive, as each Brand Standards Manual needs to be tailored to the specific business, there are a few topics that you may address in a company store manual or employee manual, but should not be included in your Brand Standards Manual. For example, you may have addressed work hours or employee benefits, and compensation in your company stores, but you should not prescribe these items to franchisees to avoid joint employer liability. Additionally, policies and procedures related to recruiting, hiring, firing, and training should not be included. If you find that it is imperative to address these topics in the Manual, then you should provide suggestions—but not requirements.
A good rule of thumb is you shouldn’t prescribe to your franchisees “back office” items. In other words, if the public can’t see it or it doesn’t impact the customer experience, you shouldn’t mandate it.
Start Franchising with Larkin Hoffman
Developing system standards is an ongoing process for franchisors. First, when starting to franchise, franchisors will need to prepare an initial Brand Standards Manual. We work with startup franchisors in reviewing these Manuals to ensure they cover many of the most important aspects in franchising, based on our decades of experience working with some of the largest and fastest growing brands. We also help our franchisor clients protect their brands and system standards should a franchisee fail to follow the requirements of the Manual.
Whether you’re just starting to franchise or a mature franchisor, Larkin Hoffman’s leading franchise attorneys can work with you to ensure your Manual protects your brand. Reach out today to learn more about how we can help your franchise system run smoothly.