Operations Manual or Management Manual, Which One Do You Need?

What’s the difference between the operations manual and the management manual? A lot of times, there is confusion between both, and more often than not, franchisees have one but not the other.

Although each serves very different purposes, both are critical to franchisee success. I’ll explain why in this blog post.

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What is the Franchise Operations Manual? 

The franchise operations manual is a step-by-step handbook that the franchisor gives franchisees to guide them in duplicating the brand and producing a positive customer experience, which then brings sales to the business.

When you buy a franchise, you are investing in the secret formula that created the proven brand you invested in. This manual contains those critical elements and tools, along with everything you need to properly train your managers and team members on all aspects of that brand.

The franchise operations manual should include the following: 

Chapter 1: The Brand Culture 

• The history of the brand, where it came from, and what it took to make it what it is today.
• Who the founders are.
• The brand’s mission, vision, and values.
• The culture that the franchisor wants to build among all their units in the state, country, and across the world.

Chapter 2: The Product or Service

• The product or the service the brand is selling to consumers.
• The detailed step-by-step instructions to produce those products or deliver those services to the customer so the franchisee can duplicate them exactly as the franchisor has proven it to be successful.
• The stations’ layout where the product or service gets delivered.
• The quality level that should be maintained so that the product or service is consistent every single time it is delivered.

For example, if you are a food service restaurant selling sandwiches, this section would have to explain how to create the sandwich, from baking the bread and the ingredients to include in each recipe to the portions and placing of the ingredients so they look consistent every time. 

Keep learning: How to achieve consistent execution

Chapter 3: The Service Processes

• The way to execute the processes to deliver this service or product to the customer so they have a positive customer experience every single time. 

One thing is how to build the product, but another is how to deliver it to the customer. That’s what this section would explain. Do you do it through a drive-thru? Through a menu style line? In a dining room or for delivery?

Chapter 4: The Brand Image

• The brand’s name and logos.
• The furniture, counters, lobbies, uniforms, and trucks or delivery vans (if the business goes to the people's homes).
• In summary, everything that the consumer sees, touches, smells, or experiences when they use the franchise’s products or services.

Chapter 5: The Marketing Strategy

• The marketing area the franchisor covers, assuming that they collect a marketing franchise fee to deliver regional and national marketing to their franchisees. 
• The library of resources available to franchisees to conduct their local store marketing campaigns following the brand guidelines and standards. 

The franchisor develops the franchise operations manual to protect the brand and ensure consistency from franchisee to franchisee. That’s why it is so important. 

What is the Management Manual? 

Just as the franchisor defines, documents, and shares the operations manual with detailed instructions to duplicate and execute the brand, the franchisee must develop step-by-step procedures, policies, and processes to turn the generated revenue into profitability. 

The management manual offers guidance for unit managers and assistant managers on how to manage the business. Your leaders may have prior experience, but please don’t assume they've been properly trained for that job. Instead, build this manual to clearly instruct them on how to operate your business.

These are the sections that your management manual must include: 

Chapter 1: The Employee Lifecycle

The franchisor cannot train the franchisees on the employee lifecycle or how to manage their people, not only because of a lack of resources but also because of joint employee liability. Otherwise, they would be as responsible for these employees as the franchisee.

To avoid liability or control over the franchisee business, the franchisor does not provide any resources or training on managing the employee lifecycle. 

The employee lifecycle refers to the phases that every employee goes through while working for their employer. It all starts with the recruiting process, followed by the interview process. Those who are a good fit then proceed to the hiring process and the onboarding. These four phases are what we call the hiring process. 

The next four phases are what we call the retention process. They include the training process, the motivating process, the disciplinary process, and then the termination process. 

Each phase has specific processes, procedures, and policies you must determine and document. This will ensure that your managers can handle new hires and retain current employees effectively.

If you don't provide that guidance, you will have to execute those eight phases for every employee in every unit, which will be impossible if you want to grow into a multi-unit organization.

So, you must define, document, train, and delegate these processes to your managers so that they can represent you with your employees and you can focus on scaling your company. 

Don’t miss: Employee Life Cycle: The 8 Phases and Tips to Manage Them

Chapter 2: The Cost Control Strategies

Depending on your industry, your unit managers and leaders must learn to manage certain controllable costs. However, they also need to understand the expectations regarding these costs. 

For example, in terms of labor costs, you must define:

• How do you do a proper schedule based on your projected sales? 
• What policies do you want them to follow when building a schedule?
• Do you do pay breaks or non-pay breaks?
• When do they need to have a pay break? 

Another big cost you may have is cost of goods, food cost, or product cost. What procedures do you expect them to follow to have the most efficient cost? You must provide them with a manual that tells them how to manage this. 

Chapter 3: Security Procedures

Your management manual must also include security procedures. What happens if there is a robbery, or if someone slips and falls, or if somebody gets hurt? How should your unit managers act, and what procedures should they follow in case of an incident or an accident?

Don’t leave it to chance or guess! As a multi-unit franchisee, you won’t always be in the stores. That’s why your leaders need to know what to do in an emergency, and that’s what this section is for. 

Keep learning: Keep your Employees Safe! Key Safety Policies and Procedures

Chapter 4: Local Store Marketing Activities

Another area that you must cover in the management manual is the local store marketing activities. 

It is true that your franchisor will share with you what marketing strategies they will implement with your franchisee fees, as described in the operations manual. However, those efforts will be focused on regional and national marketing. 

When it comes to local franchise marketing, you are responsible for guiding your team members on how to promote your business with the communities around your stores. Among other things, you must explain:

• How to build a marketing plan.
• What activities they can do to attract local consumers.
• How often should the campaigns be executed.
• The indicators to determine if the actions have a positive or a negative outcome.

As you can see, the management manual is a critical element of a successful franchisee. If you want to delegate operations to your leaders, you need to define, document, and train them on what you want them to do. This will help them meet your expectations. 

In summary, the operations manual is the document that the franchisor provides to the franchisees to duplicate the proven brand they invested in exactly as it was designed so that they can achieve the best possible sales and revenue. 

The management manual, on the other hand, is the guidance that the franchisee develops and provides to the unit leaders so that they know how to manage the business, turn revenue into profitability, and build a winning team. 

Hopefully, you have invested in a great brand and you have an amazing operations manual that allows you to duplicate the brand with the highest level of excellence. And if you have a management manual to guide your managers, congratulations! You are on the right path.

However, if you are struggling to create a comprehensive management manual or are unsure of where to start, the American Franchise Academy is here to help through our COMMAND Program. 

This mastermind program is specifically designed for franchisees like you. In it, you will be able to define and document your business systems and create your organization's management manual. This will allow you to grow your business into a multi-unit enterprise and provide your unit leaders with the tools they need to succeed.

To learn more about the COMMAND program, click here!

Schedule a call with our admissions office and ask any questions you have about our program before you decide to join us. You can make an appointment at https://admissioncall.com/

Reflections:

• Have you defined and documented how your recruiting, hiring, and onboarding processes should be carried out?
• Have you spent enough time training your employees on the how-tos of your business so they can perform the way you expect?
• Are you able to truly delegate operations, or do your leaders keep asking for your guidance?
• What can you do to have a higher level of execution in your business?

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