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Nov, 07 2014

How important are franchise manuals?

Standard Operating Procedures (SOPs) in franchising provide know-how of running the business profitably.

So, franchisors should make sure to invest time and money in developing detailed biz operating procedures to guarantee its franchisees the best bet.

Once you decide to cash in on a proven concept of franchising, make sure you write a powerful operating manual for your business. This manual has to be the best as it will be the foundation of your franchise, and you will have to live it and breathe it in order to guarantee the success of your business and your franchisees as well.

What are Sops

Standard Operating Procedures (Sops) or manuals are used widely in franchised businesses as it allow franchisees to replicate the business model from A to Z and allow franchisors to maintain a high level of quality control over its franchisees the way they manage the brand's franchise operations.  A well-planned franchise operations manual will go a long way towards your long term success as a franchisor. Sops are widely used across every sector where franchising is used as a cost effective concept for tapping aggressive expansion plans. Sops are vital for franchisor's success as it helps in standardising procedures and assuring a successful quality control over franchisees.  It also guarantees operational uniformity of a franchise network during the developmental and expansion stage. There are many advantages of having a comprehensive, detailed and well-written set of operating procedures for running the franchised businesses.

SOPs are regarded as a vital tool for making a successful enterprise. So, it's important to maintain the brand's quality standards as per the franchisor's guidelines and thereby saving the brand from any dilution. We know that the franchisor makes the brand but it's the franchisee who represents the franchisor's name in the market. Sops lists in detail all the tasks required to operate the business and involves information and guidance on all aspects of what a franchisee needs to do in order to run their business as per the operational and branding guidelines of the franchisor. Franchisee should adhere to all guidelines and follow uniform operations in terms of store's look and feel, products and services.

Significance of Sops

SOPs are introduced to adopt best of practices in the franchising business and to help newbies in business to initiate pre-store launch and post store launch operations successfully. With established standard operating procedures and processes, franchisor ensures to offer a transparent environment for consumers. In franchise businesses, it's important that you work diligently on Sops to make your brand a strong foundation by providing similar look and feel of stores and standardised operations. 

No one can deny the fact that well-planned Sops are certainly play a key role in stimulating profits, enhancing productivity and attracting more customer footfalls. Agreeing to the same, C.K. Kumaravel, CEO and Co-Founder, Naturals, says: “SOPs are the crux and backbone of any franchising business. The simpler the format of the SOPs, the easier it becomes for the franchise to draw more footfalls. It is of utmost importance to understand the business operations to frame the SOPs to ensure a successful model. We believe that instilling the best process and procedures for handling clients, day-to-day work flow and employees will stabiles the entire process of our operations.”

It's important for every brand to upgrade Sops as per the changing market trends. Talking about the multiple intervals at which they upgrade the Sops, Anupam Bansal, Executive Director, Liberty Shoes Ltd, says: “The up-gradation of Sops is a continuous process. It keeps evolving depending upon global best practices and the local practices. As and when, we make certain changes in our Sops, we expect our franchisee to adopt these changes accordingly and invariably, we notice that almost all of them comply with the new guidelines as the changes besides helping the company are also likely to benefit them.”

While, G Ramachandran, Director & Promoter, Gold's Gym India feels that timely up-gradation of Sops ensures more uniformity and effective store operations. She further adds, “We change Sops as and when a situation demands. It could be for the better functioning of the system or new technology or material available in the market. Sometime it is changed if the current system suffers a setback due to a calamity or an incidence which could have been avoided. It could be addition/modification of a policy or simply a cancellation of a policy or service. We do not charge a fee but sometimes if it involves adding something to the infrastructure then it could add to expenditure to the franchisee.” Kumaravel says: “When a new service is introduced, we send across a Sop for the same and do not charge a fee for the same.” 

Controlling quality & generating profits

On safeguarding the brand from any dilution and ensuring that quality standards are followed via Sops, Bansal adds: “We have our dedicated area sales manager and zonal sales manager who keep advising our franchisees, help them in sorting out their problems and ensure that they follow the best practices as advised by the company from time to time. The system is working fine for us and most of our franchisees cooperate as much as possible in practicing and maintaining Sops.”

Franchisees are supposed to follow the guidelines as given by the franchisors. On maintaining the standards on par, Ramachandran, says: “At Gold's Gym, we strive on a few models to make sure a franchisee benefits through the Sops. We monitor them right from identifying the location and setting up interiors to training of gym staff on the latest international training modules in health and fitness, the management software and constant up-gradation of knowledge to the benefits of the users, customer service, as well as the conduct of day-to-day operations. We create the campaigns and material; then share the same with the franchisees. We keep in close contact with the franchisee to ensure he does well and follows all Sops to ensure a profitable business. There is a team based out of different parts on India geographically to ensure they get timely support in sales, operations, marketing, IT and accounting.”

Overcoming challenges

Most of the times, it happens that some franchisees fail to operate the brand's franchise as per given guidelines. And this results in damaging the brand's reputation in the market. On this, Anupam Bansal, feels: “Any practices that a company adopts is intended not only to benefit the company, but all its stakeholders, which includes franchisees as well. Generally, our experience has been that if communicated and explained properly, franchisees have little problem in adapting to changes in Sops. If any, we try to persuade them to adopt the best in their own interest. As such, we do not have to take action or penalize them.” Whereas Kumaravel says: “If any deviations are found, we communicate to the salon what the deviations have been and what were the effects of the same. If the same is repeated again, we call for a meeting with the franchise partner to make them understand how the deviations are affecting the brand. We still have not encountered a situation where the deviations have not been rectified even after the issue has been communicated to the franchise partner.”

Franchising your business is surely regarded as proven way to rapid growth but becoming a franchisor is not a ticket to success until your biz operating processes are not well in place. So, it's best to go that extra mile and provide your franchisees with detailed procedures for managing business operations successfully. Keep a regular check on quality, offer identical look and feel of store, support your franchisees by upgrading Sops and this will definitely multiply your franchise network.

Are you a new franchisor and looking to get into franchising?

Take a quick look at the checklist that will help you in making standard operating manual.

= Design of franchise store-get up and appearance

= QC for trademark/design of flyers, hoarding, ads etc

= Advertising procedures

= The procedure of selecting and recruiting employees

= Process of making sales

= Format of invoices

= Maintenance of inventories/ accounts

= Reporting guidelines

= Inspection timings and processes

= Free offers and other marketing promotion strategies and processes

= Royalty payments and paperwork


Source: Karnika Seth, Attorney at Law and Partner,

Seth Associates





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