Why the Operations (Systems Operations) Manual?
Let me first be as clear. The “systems operations” manual is an integral part of any franchise.
On the plus side, it provides for uniformity and consistency from location to location, service area to service area. Attorney Jeffery Goldstein says that it is the “Bible” for operating the franchise.
This article by no means attempts to express a legal position but only to make prospective Franchisees aware of the nuances and control that the “systems operations” manual requires of its Franchisees.
Except for a table of contents in the franchise disclosure document, Prospective Franchisees do not know what these contents include in the “Operations Manual” for any specific franchise unless provided a copy in advance.
This request is often not approved, given the confidentiality of the manual itself. When utilizing the services of a competent Franchisee centric Attorney, it is possible to obtain the manual by request and after signing an NDA.
Even then, it’s a difficult read and a costly proposition. Instead, your Attorney could ask several key questions relative to the manual, as explained in the videos provided below by Jeffery Goldstein of the Gold Law Group.
Rightfully, the contents of the operations manual are confidential, speak to the essence of the franchise systems, policies, regulations, procedures, approved supplier listings, remodel specifications, upgrade modifications, and more.
The document (manual) is as vital as any other agreement you may execute with the franchisor. It is written and designed to maintain the integrity of the franchisor’s consistency and operational accuracy throughout its system.
Generally, however, the new Franchisee doesn’t understand that until they receive the manual, which happens typically after they’ve signed a franchise agreement unless requested upon executing an NDA, the manual is essentially an extension of the franchise agreement itself.
It is a “controlling” document, subject to change and amendment by the franchisor at any time, and is referenced in the franchise contract repeatedly.
Examples of Operations Manual references are as follows (Restaurant):
Aspects of the System are described in the Disclosure Document and the Confidential Operations Manual (the “Operations Manual”), which you should expect to evolve over time and provided to you as a franchisee.
You must purchase or lease and install all fixtures, furnishings, equipment (including point of sales system), décor items, signs, and related items we require, all of which must conform to the standards and specifications stated in our Operations Manual or otherwise in writing unless you have first obtained our written consent to do otherwise. You may not install or permit to be installed on the Franchise premises any fixtures, furnishings, equipment, décor items, signs, games, vending machines, or other items without our written consent or that do not comply with our specifications.
To ensure that the highest degree of quality and service is maintained, you must operate the Franchise in strict conformity with the methods, standards, and specifications described in the Operations Manual or otherwise in writing. You must maintain sufficient supply and use and sell at all times only those food and beverage items, ingredients, products, materials, supplies, and paper goods that meet our standards and specifications. All menu items must be prepared by the recipes and procedures specified in the Operations Manual or other written materials. Without obtaining our written consent first, you must not deviate from these standards and specifications by using or offering non-conforming items or differing amounts of any items.
We can and expect to modify our standards and specifications as we deem necessary. We will notify you in the Operations Manual or otherwise in writing (such as via e-mail) of any changes in our standards and specifications.
A complete list of our approved products and suppliers will be included in the Operations Manual and is subject to change over time. We will provide you notice in the Operations Manual or otherwise in writing (such as via e-mail) of any changes to the lists of approved products and approved suppliers.
In addition, all your advertising and promotion in any medium must be conducted in a dignified manner. They must conform to the standards and requirements in the Operations Manual or otherwise.
Confidential Operations Manual: You must operate the Franchise following the standards and procedures specified in the Operations Manual.
We may revise the contents of the Operations Manual, and you must comply with each new or changed standard. You must also ensure that the Operations Manual is kept current at all times.
If there is a dispute regarding the contents of the Operations Manual, the terms of the master copy maintained by us at our home office will be controlling.
You must comply with Operations Manual as amended.
For a fairly extensive review of “Franchise System Standard Manuals,” see these videos prepared by Jeffery Goldstein of the Gold Law Group – firstname.lastname@example.org
Do I Have to Abide by Franchise System Standards Manuals? – Part 1
Do I Have to Abide by Franchise System Standards Manuals? – Part 2