Franchising: An Entrepreneur’s Guide

4e
by Jonathan Comish, Scott Julian, Richard J. Judd and Robert T.
Justis
Chapter 8: Managing the Franchisor’s
Operations Process
Promotional Packet

Written information that represents the types of support a

franchisor provides a franchisee
Used to :
1)Solicit franchisee applicants
2)Provide basic information about the franchise
3)Illustrate the follow-up forms used to sign franchisees
Preparation

1. A description of the business, its products and/or service.

2. Background information about the franchisor and franchised
company.
3. Historical information concerning development and operation of
a franchised unit.
4. Amount of money required for acquisition of a franchise.
Preparation

5. Assistance offered by the franchisor (financial, training, and

services) to a franchisee.
6. Site, equipment, and building information.
7. Marketing factors associated with promotion and sale of the
franchise system’s products or services.
8. Financial information about franchisees and the franchise
system.
Administrative Expenses

In order to expand profitably, a franchisor must keep track of how

much each franchise adds to its administrative expenses.
Make sure that you include these expenses in your growth
estimates so that you do not run into unforeseen expenses

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Recruitment Package

Potential franchisees should be offered a recruitment package

which includes:
Recruitment Brochure
Disclosure Document
Information about the benefits and opportunities of becoming a
franchisee

7 Franchising: An Enterpreneur’s Guide 4e

Operations Package

 Fairly extensive
 Often in the form of a manual
 Designed to assist the franchisee in properly operating the
franchise

8 Franchising: An Enterpreneur’s Guide 4e

Operating Manual

 The “bible” of the franchise system

 Describes each major function and operating procedure of the
business
 In-depth and comprehensive
 Should illustrate the day to day activities

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Training Manual

Illustrates formal training programs and ongoing training programs

 Formal Training Programs- provide opportunity for the
franchisor to help new franchisees develop specific knowledge
about the franchise system
 Ongoing Training- usually provided by field staff after the
franchisee has entered the business
Slide title goes here, Arial 24pt
On one or two lines
Use level 1 text for main slide text in paragraph format. Level 1
text is Arial 22pt, black, flush left, without bullets.
 Do not add bullets to level 1 text
 Instead, use level 2 text for main bullet points
 Use the “Increase Indent” and “Decrease Indent” buttons to
change text levels; do not just click the “Bullets” button
 Avoid paragraph-formatted bullets when possible; try to keep
bullets to a maximum of two or three
– Level 3 and 4 text is Arial 20pt

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Location Selection Criteria

 Assist in determining optimal sites

 States factors to be considered
 Sets criteria of the franchisor for site selection
 Franchisor has ultimate say-so
Marketing Manual

 Franchisor’s marketing philosophy

 Brand name is described
 Quality concept is articulated
 Includes information about labeling, packaging, and consumer
services
 Product classification, features, pricing policies, product
strategies, etc.

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Advertising Manual

 Advertising
 Promotional Strategies
 Graphics and Signage
 Public Relations
 May include examples of advertising material and promotions

14 Franchising: An Enterpreneur’s Guide 4e

Field Support Manual

 Identify and Outline Services provided by the franchisor

 Services like training, inspection, record keeping, financial
planning, and quality control standards
 Recommended forms and procedures
Quality Control Forms

 Policies and Standards for the following:

 Credit services
 Technical services
 Maintenance services

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Quality Control Forms

 Customer inquiries
 Product features
 Delivery Schedules
 How to handle complaints
 Physical appearance of building
 Adherence to operating procedures
 Additional services and procedures

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Pre-Opening Manual
 Not lengthy or over descriptive
 Includes checklists of activities and steps that must be
completed before a grand opening can take place
Important time periods:
1) Six months prior to grand opening
2) Three to six months prior
3) One to three months prior
4) 30 days prior

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Site Inspection Manual

 Helps franchise system achieve consistency among the

businesses
 Physical Attributes (appearance, décor, cleanliness)
 Appearance of Employees
 Other intangibles (Example: Ambiance)
 Includes criteria for inspection
Record Keeping Manual

Standardized accounting and bookkeeping forms for the

franchisee
Most franchisors require the reporting of the following on a weekly,
bi-weekly or monthly basis.
 Total Sales
 Costs of Goods Sold
 Labor costs

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