Selecting a Franchise: How well is the System Documented?

Recently, on one of the franchisor forums, one of our clients, Thomas Scott of Showhomes, published the following article on how they are using our online manual. It’s a wonderful piece that shows why they are the leader in the home staging business and why they have so many well-informed and successful franchisees.

When you buy a franchise, you are really not buying a business.

You are buying a system for operating a business.

One of the most overlooked pieces of evaluating a franchise is how well the system is documented, how often is it updated and equally important, how accessible is the documentation.

Why is this important?
Most franchise companies use paper manuals – enormous 3-ring binders – that help you get your business off the ground. They may be broken into several smaller binders and labeled Operations, Marketing, Accounting or Grand Opening. These critical documents explain in detail how you open an office, ramp it up, generate revenue and at the end of the day, turn a profit. Following the ‘system’ in a franchise company is the quickest path to becoming a Top Performer.
Not following the system is almost always the quickest path to becoming an Under Performer. Remember, a franchisor doesn’t make money if you don’t so they have a vested interest in making sure you have a well documented, step-by-step procedure to becoming profitable.
Or at least they should. The truth is how do you know before you buy?

At Showhomes Home Staging, my company, we stopped using paper manuals all together. We use a very sophisticated and secure online manual that serves out information in the way you want – always accessible, searchable and secure. Our franchisees can use keyword searches to get basic questions answered, can access documents and can even suggest changes when they come across a hole so our documentation stays sharp 100% of the time. When we add new content, our franchisees get notification emails and have to check off they’ve read the new content so no one gets left behind.

On the franchisor side, we track how often every user accesses the manual, have metrics for how many pages they access and understand how long they spend on each page. This way we know what our franchisees want to learn and what parts are in use so we can always adapt. It also helps us understand what questions franchisees are interested in so we can develop more of what they want and need.

When I ask other franchise executives what percentage of their franchisees access their manual on a regular basis, the number is always shockingly low: 5-10% or less. That means a stunning 95% are not using the system documentation to help them make better decisions day-to-day. Think about it – a huge 3-ring binder is likely to sit on a shelf, gathering dust. Most franchisees have a need to access it but the format makes it difficult. As a result, they ask other owners or call their operations staffer with basic questions, over and over.

Does this hurt the franchisee? You better believe it! When that operations person – the most important person on the corporate team – is answering basic questions, they are not thinking proactively about how to help you grow. Face it – there are only so many hours in a day.

Because we pay attention to this, we know that 35-40% of our franchisees access and use our online manual on a regular basis. We know who does and who doesn’t and this helps our operations and field staff help franchisees grow. It makes for more specific conversations and because our documentation is online, it allows us to leverage the content whenever and wherever we are. Most importantly, it gives our franchisees the ability to help themselves 24 /7. We’d like that number to rise and because we measure it, it will.

Whatever franchise you look at, make sure to ask about the system documentation. Go beyond looking at the table of contents in the FDD. Ask franchisees if they use it on a regular basis and if it helps them run a better performing business. Ask if it is online – in today’s online world, it should be.

We used Kit Vinson from http://www.franman.net/ to help author our manual and port it online.--


Thomas Scott
VP Marketing and Systems Development
Showhomes Home Staging
http://www.showhomesfranchise.com/

Is it OK if your manual is out of date?

“What’s wrong with having a Franchise Operations Manual that is a little out of date? We haven’t changed that much in the past 5 years. Nobody looks at it anyway, right?”

If you have ever thought or said those words, then I encourage you to keep reading because you might walk away from this with a new perspective on your Franchise Operations Manual.

So, what is wrong with having a manual that is a little out of date? There could be a lot wrong with it. Let’s start with the phrase, “a little out of date.” That phrase is relative. To some people, a little out of date might mean 3-6 months. Believe it or not, some franchise systems make it a point to update their manuals every month, and even every week. With the Online Manual by FranMan www.franman.net/onlinemanual.html , you can update your manual multiple times per day if you wanted to. However, the managers that stay on top of the operations manual that way are very few and far between. Usually the manual gets pushed to the back burner because there are always other pressing issues to deal with. This is because most people don’t see a direct correlation between the operations manual and the bottom line. But I digress. We’ll save that topic for another blog entry. Usually, the phrase, “a little out of date” means 5-10 years. I know, it sounds horrible, but I see it all the time.

Here is where the disconnect is. Most people see the operations manual as an event instead of a process. Somehow, somewhere, from somebody, most people are taught that the EVENT of producing an operations manual is completed once the manual goes to print. That is usually followed with a big sigh of relief, “Whew, man am I glad that’s done!” This, in turn, is followed with 5-10 years of silence – nothing but the crickets chirping.

On the surface, everything is fine until one day somebody in the home office decides to crack open the manual and learns that the procedures that are supposed to be the official System Standards are so outdated that they still refer to floppy disks and the up-and-coming World Wide Web. Laugh all you want, but I have seen it, and I have seen it in big systems as well as small ones.

Underneath the surface, however, everything is not fine. A great deal of damage is being done. Here is what’s happening. Existing franchisees have been conditioned to NOT use the manual, and new franchisees learn quickly to NOT use the manual. You might respond, “What? Nobody here teaches our franchisees to NOT use the manual.” Indirectly, you do. By not providing an up-to-date operations manual for your franchisees, you are teaching them that they will not likely find what they need when they reference it. Experience is the best teacher. If experience tells them that the document is useless, then they will conclude that in fact, the document is useless.

Additional damage is being done by the out-of-date manual when it causes franchisees to rely solely on the home office staff to answer all questions. That puts a burden on staff that keeps them from performing other necessary duties. They can’t get anything else done if they spend all day fielding questions from franchisees.

Finally, out-of-date franchise operations manuals can be a nightmare if you ever have to go to court, and the lawsuit involves one of your out-of-date System Standards. That can be very costly.

You can avoid all of this mess by resetting your perception of “manual=event” to “manual=process.” Your Franchise Operations Manual is a process that begins with the production of the manual, but never ends until the company does.

It really does matter if your manual is a little out of date. That’s why nobody looks at it anyway.

Do You "Know" Your Franchise Training Program

Robert Bilotti with Novita www.novitaunique.com recently published a paper that was written for the benefit of the potential franchisee, entitled, “Discovery: The Questions a Potential Franchisee Should Ask About Training.” http://www.novitaunique.com/blog/ (March 26, 2010). In this paper, he does a fantastic job of educating prospective franchisees to ask questions of the franchisor about the training program that they might receive if they decide to invest in the system.

After reading that paper, it should make you think. When was the last time that you stepped back and took a good look at the training program that you provide to your franchisees? I am not talking about the table that you have included in the FDD about what you WANT the training to be like. I am talking about the product that the new franchisee actually receives. Is it organized? Do you provide sufficient training materials? Do you utilize all of the media available to you such as video, e-training, printed materials, etc.? Does your training program actually follow the Franchise Operations Manual that is supposed to be the master document of all of your system standards?

HAVE YOU ACTUALLY SAT IN ON AN ENTIRE TRAINING PROGRAM to “enjoy” the entire experience? Maybe you should.

You should read the article and ask yourself the questions that prospective franchisees may be asking you. Can you answer all of the questions? If you were a prospect, would you be satisfied with your answers?

In reality, you are probably not the best judge of the effectiveness of your training program. Even if you did take the time to sit through your entire training program (assuming that you are not the person that usually delivers it), there is still the problem of perspective. You have a base knowledge of your business that that should be more comprehensive than anyone else in the world. You are the “World’s Leading Authority” on your franchise system. That means that when a concept or procedure is explained in a training program, it could possible sound perfectly clear to you while the rest of the class receives the message with glassed-over eyes.

So, how do you get a fresh perspective on your training program? The best way is to solicit the opinion of a company that specializes in training, more specifically, franchise system training.

To quote Tom Peters, it is always a good idea to “Manage by wandering around” (MBWA). Take off the manager’s cap and wander around your business and observe. Observe your training process for yourself, through the eyes of the student, and see if it meets the same levels of quality that you expect in all of the other areas of your business.

Online manual

It's been a busy month, thus the lack of updates, but if you haven't had the opportunity to look over our Online Manual by FranMan, you should make the time. If you mail out many franchise manual updates, it could save you a ton just on postage and headaches. And as always, if you would like a quick, no pressure, personal demonstration, give Kit a call or drop him an email.

IFA Fran Bowl

The last, and possibly the best, party of the 2010 IFA convention was held at the Alamo Drafthouse. Unless you had seats at the 50 yardline, this was the best way to watch the Super Bowl. The event was appropriately named FranBowl.

The reason Franbowl was the best place to be was because the game was shown in a dinner theatre venue, complete with free food and drinks. Over 500 franchisors, franchisees, and franchise vendors attended the event and watched the Saints win the big game.

2010 IFA convention

The exhibitors are working hard to put the finishing touches on their displays as the IFA exhibit hall nears its grand opening for the 2010 IFA Convention.

Integrated Video

If a picture paints a thousand words, what can you say about a video? One of our clients has begun integrating YouTube video into their online franchise operations manual. While we’ve come to know YouTube a resource for funny videos, there are a tremendous number of very helpful training and instructional videos. For example, in explaining a blog, our client has integrated this video into their online manual.



You may think we talk too much about our online franchise operations manual, and we do. But we're really excited about all the new ways we've been able to help franchisors facilitate their franchisees to better understand and improve their business. If you’d like to see a personal demonstration of our online franchise manual, please give us a call or drop us an email.

Franchise Resolutions

It is January 29th – Do you know where your resolutions are?

The New Year is almost over. Soon we will be into February, then on to the end of the first quarter. Did you make any resolutions relating to your franchise system? Did you resolve to:

• be more responsive to the needs of your franchisees?


• update your Franchise Operations Manuals?


• market your system more aggressively?


• join the 21st century with an up-to-date intranet portal?

If you did, how’s that working for you so far? As they say, the road to hell is paved with good intentions.

If you haven’t yet been able to stick to your New Year resolutions, then consider the idea that maybe you need help. Maybe you bit off a little more than you could chew. This doesn’t mean that your resolutions are were too big. It simply means that you might need some help reaching them. Don’t be afraid to ask a professional for help.

If you need to renew the internal structure of your franchise system so it can be more responsive to the needs of your franchisees, thus deliver a consistent customer experience system wide, then you need to talk to Bob Gappa at Management 2000. www.mgmt2000.com email: m2000@mgmt2000.com.

If you resolved to finally tackle the Franchise Operations Manual that is years out of date and you can’t seem to get to ball rolling, then talk to the professionals who do this for a living, every day; Franchise Manuals LLC. FranMan specializes in:

- Producing professional, custom Franchise Operations Manuals
- Updating existing operations manuals
- Hosting fully integrated and interactive online operations manuals
www.franman.net email: kit.vinson@franman.net

If you need help marketing your Franchise System, call the guy who knows more about contemporary marketing strategies than anybody else, Martin Greenbaum of Greenbaum Marketing Communications. www.greenbaummarketing.com/ email mg@greenbaummarketing.com

If you are looking for the most up-to-date platform to house your system’s intranet, then you should call nobody else but Amit Pamecha at FranConnect. www.franconnect.com email: amit@franconnect.com

Franchise Manuals Interview with David Bullock Part 1

I am talking to David Bullock, the Director of Sales at Franchise Manuals LLC http://www.franman.net/ .

David, you are on the front lines with our potential client base. That means that you hear the good, the bad, and the ugly. One of the things I like to do from time-to-time is to visit with you about the responses and reactions to our product line.

Kit: David, for the sake of the reader, describe the companies that you spend the most time talking to. Are they smaller start-up franchisors, or are they the more established franchisors?

David: The majority of the businesses that I speak with are the more established franchisors. Many of them operate several different brands as well.

Kit: When you talk to them about their manuals, what are their major concerns?

David: You may be surprised to hear that most of them have the same concerns. The difficulties of keeping the manual updated ranks pretty high on the list, if not at the top.

Kit: Why are manual updates so difficult for the companies you speak with?

David: The reality is that most companies don’t have a system in place for accomplishing manual updates. In addition, these companies simply don’t have the human resources to devote to a manual update project. Most employees are already overloaded with a full workload. When the manual update project is added, there just isn’t enough time in the day.

Kit: What is the typical approach by a franchisor for updating their Operations Manual?

David: Typically, a company will pull personnel from other areas of the company in order to complete the project. The problem with this approach is that whenever you delegate the manual update project to different departments, you have multiple authors and it becomes a patchwork set of documents instead of a cohesive Operations Manual.

Kit: What have you heard about our newest product, The Online Manual by FranMan www.franman.net/onlinemanual.html

David: People tell me that the Online manual by FranMan is an incredible product. They love how user friendly the online manual is compared to the traditional paper manual. They also tell me that they love the real time updates feature that keeps their franchisees current on all the system standards. In addition, they say that the system eliminates the added expense of printing and distribution of manual updates.

Kit: David, if anybody reading this has any questions for you, how can they contact you?

David: They can call me at 214-448-6291, or they can e-mail me at david.bullock@franman.net

The Danger of a Poorly Written or Outdated Manual

Does your Franchise Operations Manual updating procedure consist of merely changing the revision date at the bottom of the cover page? Do you have a file folder labeled “Manual Updates” that is filled to the brim with changes that you want to make when you have time to get around to it?

There are very few companies that I have encountered that have a systematic method of updating their manuals on a consistent basis. Based on the conversations I have had with franchisors, less than 10% actually keep up-to-date on revising their Franchise Operations Manuals. Why is this? The answers vary. Some people say that they don’t have enough time, others believe that the changes aren’t important enough to justify their time away from their primary responsibilities.

I am sure that if you “peel the onion” to reveal the real reason, you would learn that they don’t update their manuals because the updates don’t have a direct correlation to the bottom line of the company. If it doesn’t generate immediate profits, then it has to wait until things slow down a bit. The problem is that things rarely, if ever, slow down. The reality is that life in the office continues to gain speed until it reached terminal velocity. At that point, another employee is hired to help manage the chaos. Then, life in the office returns to its usual fast pace and the process starts over again.

So, there you are with a lean staff, everything running smoothly, except for the Franchise Operations Manual. However, since your manual doesn’t have a direct impact on the bottom line, it stays under the radar. But, here is what could also be happening under the radar.

1. Better, cheaper, more thorough methods or systems are put into place and not documented in the manual

2. Home office human resources are being wasted by calls from franchisees who are asking questions about new standards that were introduced but not updated in the manual.

3. Underperforming franchisees are not being held accountable to undocumented, outdated standards.

4. The potential for litigation grows larger and larger with every undocumented system standard.

5. Potential franchisees who are performing due diligence are “turned off” when they visit a site and see a tattered manual with old update pages hanging out of the pockets


All of these problems can be overcome with fully interactive, fully integrated, Online Manual by FranMan www.franman.net/onlinemanual.html

The Online Manual by FranMan is an HTML version of your Franchise Operations Manual. This means that your manual has the style and elegance of your corporate website, it’s not just a collection of PDF files.

The Online Manual by FranMan features instant, real time updates. This means that your manual is never updated and that your franchisees are always operating from the most current system standards.

The Online Manual by FranMan also features a tracking tool that allows you to know which franchisees have read the manual updates, and which franchisees need additional support.

Regardless of the reason, a poorly written or outdated operations manual is a liability to your company, but it doesn’t have to be that way.