Introduction

This will be our final post on building your franchise network on a solid foundation.

We’ve covered the beginning – the 3 pillars:

·       a robust recruitment process

·       a comprehensive induction training programme

·       a thorough launch and initial support programme.

Two Key Supporting Documents

Now for the 2 key supporting and very probably most important documents you will need to manage and monitor your franchise network:

• Franchise Agreement
• Operating Manual

A well-drafted franchise agreement is worth its weight in gold and contributes significantly to the overall value of your franchise network. The franchise agreement should also be supported by an equally well-written operating manual. These 2 documents are crucially important when establishing the foundations from which to develop and expand a successful franchise network.

The franchise agreement will set out the day-to-day responsibilities and other obligations that the franchisee must carry out to operate their franchise in line with the franchisor’s tried & tested systems and methodology, which should also have been explained to the franchisee while they attended their induction training. The manual will bring those responsibilities and obligations alive by explaining or illustrating exactly how and when they must be completed. And which again will have been explained clearly to the franchisee while they complete their practical induction training sessions.

As a general rule franchise agreements tend to operate over a 5-year term, and during that term, there will inevitably be amendments and changes needed with the day-to-day operation of the franchise business because laws or regulations or accepted best practices also change. Think of franchise models covering home care or providing children services such as swimming, education, hospitality and food. It is not practical to have to amend or change a legally drafted franchise agreement that forms the contract between franchisor and franchisee, but when the agreement refers to the Operating Manual then you do have the flexibility you (the franchisor) need to ensure franchisees comply with current laws, rules and regulations etc. Updating your operating manual enables any changes or amendments that affect your franchise model to be implemented as part of the approved current methodology set out in the operating manual and referred to in the franchise agreement.

Protecting Intellectual Property

But perhaps the greatest incentive for franchisors to have a well-drafted agreement and up-to-date manual is that it will be much, much easier to protect their intellectual property and enforce the terms of their franchise agreement, should the need ever arise.