How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
I’ve heard it many times in franchise circles; complaints about keeping franchise manuals updated. The chief frustration of many franchisors is the fact that after the first review, many franchisees don’t consult the manuals again. Thus it can seem that countless hours of staff or consultant time are invested for no good reason. Rest assured, there are many good reasons to keep those manuals current as well as ways to encourage their ongoing use by franchisees.
Think of the manuals as the DNA of your system; with proper execution by the franchisee, what you document in manuals is replicated from unit to unit. It is essential to have in place current and easily understood policies and procedures. Asking franchisees and their staff to comply with practices you haven’t yet fully documented and conveyed to them is impractical at best and at worst creates tension in the franchisee/franchisor relationship.
For most franchisors, the operating manual is expressly incorporated into their franchise agreements and referenced in their disclosure documents. Products, services, standards and procedures inevitably change over time. To secure compliance as the brand evolves, manual updates must keep pace with changes.
Tip 1: Schedule Annual Updates
Unfortunately, the longer franchisors wait to update material, the more daunting the project becomes. At a minimum, aim for annual manual updates. These allow for incremental changes that are easier to document and easier to convey to franchisees. Put a date on the company calendar following the update of your disclosure document and franchise agreement, by which time manual updates must be completed. This is a good time for an annual vicarious liability and co-employment audit of the manuals as well. Best practice: make manual updates ongoing and communicate them to franchisees every time they log on to your password protected site.
Tip 2: Assign a Project Owner
Having one person in charge of an annual manual review process is essential. The individual becomes the funnel for changes and/or reaches out to solicit changes on a scheduled basis. Additionally the project owner should be tasked with obtaining appropriate approvals for all content changes. Consider a person who is either head of your training department or who has a strong involvement in training, since manual content and training programs should be tightly integrated.
Tip 3: Don’t Underestimate the Time
Revamping a manual that has gone stale should be considered a substantive project that will require well thought through inputs from multiple departments. To prevent project drift, top management must prioritize the project by setting goals and timelines, holding personnel accountable for timely contributions.
Tip 4: Streamline Verbiage and Enhance Layout
Crisp, bulleted content and layout that allows for easy reading along with online documents with search capability promotes ongoing use of manuals by franchisees and their personnel.
Treat manual updates with the same discipline that your company brings to annual updates of its legal agreements – minus the legalese. System manuals are after all, an extension of your legal contract and as such, strengthen your ability to hold quality and service standards which tie to your brand’s reputation.
