CHAPTER 7
MANAGING THE
FRANCHISOR'S
OPERATIONS PROCESS
LEARNING OBJECTIVES
The students will be able to
Learn why a franchisor has a promotional and operations
process
Learn about the components of the promotional package
Learn about how to develop the operations process.
Learn about the components of the operations package
FRANCHISE PACKAGE
A franchise package, otherwise known as a franchise license
is at the heart of every franchise system. It contains the
franchisors complete business concept.
Franchise Package Consist of:
Promotional Package
Operations Package
PROMOTIONAL PACKAGE
Solicit franchisee applicants
to the franchise system.
Provide basic information
about the franchise.
Illustrate the follow-up
forms used to sign
franchisees.
Essentials of franchising
agreement of advertising.
COST ASSOCIATED IN SOLICITING NEW
FRANCHISEES
1 . A d m i n i s t r a t i ve E x p e n s e s
2. Recruitment Cost
a. Advertising
b. Sales
3. Promotion Cost
4. Training and schooling Cost
5. Supplementary Services and Related
expenses
6. A d m i n i s t r a t i ve C o s t
a. Personal contact
b. Follow-up
c. Personal Data Sheet
d. Financial Data Sheet
1. ADMINISTRATIVE EXPENSES
Hiring and training salespeople to recruit or solicit
prospective franchisees.
Non-personal costs of franchisee recruitment
a. cost of publishing brochures
b. advertising
c. promoting the business through trade show
Running background checks on prospective franchisees.
Performing analyses.
2. RECRUITMENT PACKAGE
It is usually consist of a recruitment
brochure, a disclosure document,
and other information about the
benefits and opportunities of
becoming a franchise with the
franchise system.
This package is used as part of the
franchisor’s response to initial
inquiries by the prospective
franchisee.
RECRUITMENT BROCHURE INCLUDES THE
FOLLOWING INFORMATION:
[Link] of the business
2. The principal people in the franchise system
3. The franchise system
Territory covered
Operating assistance
Needed to start franchise
Ongoing assistance through franchisor
Franchise system regional and national
Marketing programs
Credit card system
RECRUITMENT BROCHURE INCLUDES THE
FOLLOWING INFORMATION:
4. Operating a franchise
Location
Training
Insurance
Assistance
Management and planning
Standards of performance
Trademarks and trade names
Duration of the franchising agreement
Franchising and others fees
Franchisee right to assign
Business forms recommended and supplies
5. Investments
6. Franchise application
3. PROMOTIONAL PACKAGE
A description of business, product or services.
Background information about the franchisor and franchised
system.
Historical information concerning development and operation
of franchised unit.
Amount money required for acquisition of franchise
Assistance offered by the franchisor.
Site, equipment, and building information.
Marketing factors
Financial information about franchisee and franchise system.
PERSONAL CONTACT INFORMATION
SHEET
is a form for recording preliminary
information about a prospective
franchisee, including the
prospect's , and phone number,
how the contact was made, and an
impression of the initial contact
recorded by the person contacted.
4. TRAINING AND SCHOOLING COST
the actual materials created or
utilized for training and time spent
in each training module or
conference.
This is calculated into the total
because every moment an employee
spends in training is time away from
their job.
5. SUPPLEMENTARY SERVICES AND
RELATED EXPENSES
Supplementary services, supporting, or enhancing include
safekeeping, consultation, expectations, and hospitality. On
the other hand, facilitating supplementary services include
payment, billing, order-taking, and information
They include packaging, pick-up and delivery, assembly,
installation, leaning, and inspection. Sometimes there's a
charge for these services.
6. ADMINISTRATIVE COST
expenses an organization incurs that are not directly tied to a
specific core function such as manufacturing, production, or
sales.
These overhead expenses are related to the organization as a
whole, as opposed to individual departments or business
units.
Examples:
a. Personal contact
b. Follow-up
c. Personal Data Sheet
d. Financial Data Sheet
OPERATIONS PACKAGE
fairly extensive, and the materials often put in the
form of manuals. The information contained in the
manuals is meant to assist the franchisee to
properly conduct the operations of the franchise.
10 MAJOR MANUALS IN A FRANCHISE
BUSINESS
1. Operating Manual
2. Training manual
3. Location Selection criteria
4. Marketing Manual
5. Advertising Manual
6. Field Support Manual
7. Quality- Control Manual
[Link]-opening Manual
9. Site inspection Manual
[Link] and Reporting Manual
1. OPERATING MANUAL
Operating manual is often referred to as the bible of franchise
system.
It should describe each major function and operating
procedure of the business.
The manual typically illustrates in graphs, charts, and
pictures how the franchisor and franchisee conduct business
together
It also an instructional tool useful in the programs run by the
franchisor for training new franchisees.
Covers the essential administrative, legal, and functional
aspects of the franchise system.
2. TRAINING MANUAL
It is a guide for teaching operating procedure and personnel
management.
Category of Training Programs
Formal Training Program- provide opportunity for the
franchisor to help new franchisee develop special knowledge
about the franchise system and the business factors
important to running a successful franchised business.
Ongoing Training Program- is usually provided by field staff of
the franchisor after the franchisee has entered business.
OUTLINE TOPICS IN THE OPERATING
MANUAL
Section1: Introduction
Section2: General Rule of Operation
Section3: Unit Operation
Section4: Management
Section5: Store Operation
Section6: Sales Operations
Section7: Inventory
Section8: Maintenance Control
3. LOCATION SELECTION CRITERIA
Economic strength and potential of a particular region.
Economic strength and metropolitan area
Availability of transportation for supplies
Employment trends and employment mix
Demographic characteristics within the particular market
segment in terms of purchase of product or services.
Land development and construction cost
Location of primary competitors.
4. MARKETING MANUAL
It describes the franchisor’s marketing philosophy.
It discusses in a detail the features and characteristics used
to market the franchised business’s offering, which may be
consumer or industrial goods, durable or non durable goods or
service.
5. ADVERTISING MANUAL
Advertising manual covers at least four topics:
Advertising-is an effective communication and promotion of
the franchised product to the targeted audience.
Promotion- promotion materials are designed to attract
market response or enhance existing customer demand.
Graphics- provides the franchisee with information about how,
where, and when to use trademarks, logos, and service marks
Public Relation Program- is to generate favorable publicity for
the franchise system as well as for the individual franchise
location .
6. FIELD SUPPORT MANUAL
Should identify and outline the
services provided by the franchisor
to each franchisee.
Field Support Manual includes
service such as: training,
inspection, record keeping,
financial planning, and quality
control standards and procedures
7. QUALITY CONTROL MANUAL
Helps the franchisee maintain
desired standards of quality, service
and performance, and presentation
8. PRE- OPENING MANUAL
Includes checklist of activities and steps that must that must
be completed before a grand opening can take place.
9. SITE INSPECTION MANUAL
Describe s each item that is included in an inspection, along
with the criteria used and procedures to be followed by the
franchisee including a daily or weekly log for the franchisee
to complete.
2 Major Category of Site Inspection
Appearance Category- list items for inspection that are
internal and external to the business facility.
Maintenance Category- contains items by which to rate the
neatness and cleanliness of customer and employee work
areas, as well as adherence by the franchisee to the
recommended preventive maintenance program.
10. RECORDING AND REPORT KEEPING
MANUAL
Describes a standardized accounting and record keeping
system that will provide a means of obtaining accurate
financial information with a minimum of time and effort
End of Presentation
