When prospects buy a franchise, they buy 2 things: a limited license to use brand Marks and an operating system.  This fact sheet focuses on the operations manual, which is the backbone of your brand operating system.  Below are some basic premises and guidelines to aid in your preparation and maintenance of the operation manual.

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The operations manual is an instruction manual for franchisees.  The operations manual is your opportunity to take your knowledge, skills, and experience about how to operate your business and convey it new franchisees.  A good operations manual will build brand quality and uniformity.  When determining the content of the operations, track your daily, weekly, monthly, yearly activities.  Think back to when you started your business, what did you do?  What should you have done?  Write down what you did and how you did it, and when you did it.  Your target audience is someone that is foreign to the business, a complete outsider.  Keep your audience in mind.

The operation manual is a living and breathing document.  The operations manual, unlike the franchise agreement, will and should change over the life of the franchise agreement.  However, the operations manual cannot change or modify the terms of the franchise agreement.  The operations manual should address how to operate a franchised business, not the legal obligations of the franchise.  For example the operations manual may contain the forms franchisees are to use in reporting their royalties, but the operations manual does not state what royalties the franchisees must pay.

 The operations manual should contain information cited in the franchise agreement.  The franchise agreement in numerous sections makes reference to the operations manual.  Cross check your operations manual to make sure that if the franchise agreement says information is contained in the operations manual, that the information is contained in the operations manual.

 The operations manual is confidential information.  Make sure that your operations manual, on the first page, states that the operations manual is confidential information belonging to you, the franchisor.

 Give notice that you have the right to change the operations Manual.  Also on the first page of the operations manual give the franchisee notice that you can and will modify the operations manual.

 Create an operations manual table of contents.  Create an Operations Manual table of contents showing the pages of each section or chapter and the total number of page in the manual.  The Operations Manual table of contents is included as an exhibit to your FDD.  The FTC rule requires the showing of number pages per section and total number of Operations Manual pages.

 Leverage the operations manual for training.  When composing your initial franchisee training program, leverage the operations manual for setting the curriculum and as an instruction book during training.

For more information about operations manuals or building your brand, contact Gettins & Nelson, LLC at 513-400-3895 or my email at mbgettins@gettinsnelsonlaw.com

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