Create an Operations Manual Before Franchising Your Business

If your business only runs smoothly when you are there, your know-how is not yet ready to be passed on to another entrepreneur. Before offering franchises in the Philippines, turn your day-to-day operations into a clear manual that can be tested in practice. In franchising, this bridges the gap between your personal approach and a system others can replicate.

1. Record what actually happens, not what you assume happens

Start by observing a typical business day. Follow opening procedures, goods receiving, customer service, cash handling, cleaning and closing. Include tasks that only you know how to carry out, such as approving substitute ingredients or handling complaints that staff cannot resolve.

Do not start by writing a lengthy document. List the processes with the greatest impact on safety, quality, finances and the customer experience. Prioritise these over minor details of the shop layout.

For each process, answer the following:

• Who is responsible? Identify the role, not just the name of the current employee.
• When is it done? State the scheduled time or the event that triggers the task.
• What are the steps? Use short instructions in the correct order.
• What proves it has been completed? This could be a log, photograph, receipt or a sign-off by the person checking the work.
• What happens if there is a problem? Explain when to stop the task and who should make the decision.

For example, “check the delivery carefully” is not enough. More useful instructions would tell staff to compare quantities against the delivery note, inspect the condition of the goods, record any shortages and set aside products that fail the checks.

2. Distinguish fixed standards from what can be adapted

Not every practice at your first outlet needs to be copied. Premises may differ in size, supplies may arrive at different times, and customer numbers may vary. Make it clear what cannot be changed and where managers have room to adapt.

Group the manual’s content into three categories:

• Mandatory standards: safety, product quality, correct use of the brand and safeguarding cash.
• Adaptable practices: task schedules and allocation of responsibilities, provided the required outcomes are achieved and employment law is followed.
• Changes requiring approval: new suppliers, product changes or local promotions using the brand.

Include example photographs and simple forms where helpful. For sensitive information, such as formulas or payment system permissions, restrict access according to role. Not every employee needs access to the entire manual.

Give each section a date, version number and the name of the person authorised to approve it. This helps prevent different outlets from following conflicting instructions at the same time.

3. Test the manual without running the operation yourself

The most important test is not whether the manual is well written, but whether it works in someone else’s hands. Choose a manager who does not rely on your personal explanations. Train them using the manual, then let them take charge while you observe and remain ready to intervene on safety matters.

Cover both routine operations and realistic disruptions: staff shortages, delayed supplies, complaints, faulty equipment and stock discrepancies. Do not deliberately create dangerous situations; use discussion-based exercises for these instead.

Record every occasion when the manager needs to call you. Are the instructions incomplete? Is decision-making authority unclear? Or is the training insufficient? Each calls for a different solution.

Measure outcomes that matter to your business, such as order errors, product waste, cash discrepancies and the time taken to resolve complaints. Set your own benchmarks based on actual operations rather than guesswork. Repeat the test after revising the manual. There is no single testing period that suits every business.

4. Align the manual with the agreement and the law

The Philippines has no single comprehensive law covering all franchises, but that does not mean franchising is unregulated. The Civil Code is important for contracts, while the Intellectual Property Code, or Republic Act No. 8293, governs matters relating to trade marks and licensing.

Executive Order No. 169, series of 2022, sets minimum provisions for franchise agreements with franchisees that are micro, small and medium-sized enterprises. These include clear rights and obligations for both parties. It also directs the Department of Trade and Industry (DTI) to create a register of the relevant agreements; confirm the current procedures and applicable compliance requirements with the DTI.

Ask a lawyer experienced in franchising to review how the obligation to follow the manual should be incorporated into the agreement. Clarify the procedures for amendments, notification, training and remedying breaches. The manual should not be used to change material rights agreed between the parties without their knowledge.

Practical step: Choose one critical process, write it down and ask someone else to carry it out without verbal guidance. Their questions will give you your first list of issues to address before expanding.