chapter 3

• Franchise Operations Manual:

  • A document describing processes, procedures, and policies to operate a franchise unit
  • Guides franchisees to operate in accordance with franchisor's standards
  • Ensures consistency across franchise system for brand strength and customer loyalty
• Franchise Operations Manual Content:

  • Includes instructions on product or service offering, marketing and advertising, training, operating procedures, human resources, safety and security, legal and regulatory compliance
• Site Selection Process:

  • Trade Access, Consumer/Market Proximity, Business Community and Culture, Proximity to Talent Sources
  • Physical Site Characteristics: Parking, Foot Traffic, Vehicular Traffic, Accessibility, Visibility, Signage, Branding Opportunity
  • Demographics: Total Population, Median Age, Household Income
  • Trade Area: Cotenancy, Restaurants, Theaters, Groceries, Hospitals, Military, Universities, Hotels, Convention, Office
• Franchise Marketing and Advertising:

  • Franchisors develop materials to promote the franchise brand
  • Includes branding elements like logos, slogans, color schemes
  • Advertising materials such as television commercials, print ads, social media posts
• Franchise Support:

  • Training and support help franchisees operate successfully
  • Training covers business operations, products and services, marketing and sales
  • Technology training on POS systems, online ordering
  • Franchise technology transfer ensures consistency with franchisor's standards
• Optimizing the Operations:

  • Balance between centralized control and local autonomy
  • Importance of standardization for consistency, training, inventory management, customer experiences
  • Leveraging technology for efficiency, communication
  • Effective supply chain management for product availability, cost minimization, inventory optimization
• Bookkeeping:

  • Core function of franchise accounting
  • Records, stores, and retrieves financial transactions
• Financial Management:

  • Balance Sheet: Assets, Liabilities, Owner’s Equity
  • Income Statement: Net Income calculation
  • Cash flow Income Statement: Operating, Investing, Financing
• Business Financing:

  • Financing provides funds for business activities, purchases, or investments
  • Debt Financing: Similar to a loan with regular payments
  • Equity Financing: Investment in the business for ownership percentage
  • Mezzanine Capital: Combines debt and equity financing, lender may convert debt into ownership