Franchise Disclosure Agreement Update Tips

The franchise disclosure agreement is the backbone document of all franchise operations and procedures. It is this document that guarantees your business is managed just the way you want by all of the franchisee partners as well as protects your business identity.

Preparing the franchise disclosure agreement is not an easy task. Apart from the fact that the document must address a lot of important issues, there are also some state and federal regulations that must be covered. This is why even experiences professionals often seek the help of franchise consultants and lawyers when writing or updating their franchise disclosure agreements.

Updating your franchise disclosure documents is also quite challenging. If need to update your franchise agreement, you surely can use some help. Here are a few useful tips that can help you throughout the process.

The most important aspects of updating a franchise disclosure agreement.

• Check federal and state regulations. The first thing to do when preparing or updating a franchise disclosure agreement is to check the federal and state regulations. Although you may still need to get the agreement reviewed by a legal consultant, this will help you write it or update it without missing any important details. There are many laws governing franchise operations. Although they may differ from state to state, in general you will need to update the agreement 120 days after the first year and than annually. Missing the state regulated deadlines can result in big troubles and huge penalties so check these as well.

• Check which parts of the agreement must be updated. There are some parts of the disclosure agreement that you will need to update even if there are no changes in the way your company works. For example you need to update item 2 for any changes in the key management, item 3 concerning litigation, item 4 – bankruptcy. You need to update the chapters concerning your opening costs based on recent expenses, the chapter regarding payments to suppliers, items regarding trademark and infringement information and the items concerning lists of existing outlets and terminations. All franchisee disclosure forms should also be updated.

• The annual audit. Each update should be accompanied by an annual audit. Call your audit partners as early as possible as leaving this for the last moment usually results in missed deadlines.

• Take advantage of the update. Updating the agreement is a real burden but it is also provides a great opportunity to review closely some of your operations. You are digging in forms and documents so you can easily go through all your franchise units contracts and check if any updates are needed there too. You can do the same with contracts you have with suppliers or other business partners. While updating the trademark section of the disclosure agreement, check the documents that concern protecting your grand names and logos and file or renew any applications to protect existing or new logos, brand names, trade marks or patents.

How to Write a Franchise Operations Manual

The franchise operations manual is one of the most important documents for any franchise business. It can make the difference between a successful and profitable franchise and a poor performing one.

Writing your franchise operations manual can be a frustrating task, especially if you are new to this business. Here are some tips that can help you throughout the process.

Franchise operation manual tips:

• Get ready. If you have never written a franchise operation manual, you will need to get familiar with the document prior to writing one. Of course every business is unique and there are different business procedures in every company. However you do not need to get into details at this stage. All you need to do is to get familiar with this type of documentation. Find as many operations manuals as you can and read them carefully. Pay close attention to their structure, the information listed and make notes about the most important details. Try to get franchise operations manuals of successful franchises and such that have businesses similar to yours.

• The first draft. After you have an idea what a franchise operation manual is you can proceed to writing the first draft of your own manual. As you have already noticed, the manual can be a bulky document so you will probably need a lot of time outlining all the information and even more time writing the details. This is where a specialized franchise tool can help you. There are some great software products that can provide you with the main frame of your manual. If you choose to use such software, all you will need to do is to customize the ready template.

• Get the draft reviewed. Once you have your franchise operations manual draft ready, you can get it reviewed by other members of the management team. Your management team is the people who know most about the business and each member of the team can contribute to the writing process. In addition, having the manual read by many people will help you a lot in refining it and making it better.

• Get the second draft reviewed by professionals. Once you have an almost ready version of the manual, get a legal professional to review it. This is very useful especially in cases when you are aiming to get franchisees from many different countries. A legal processional specializing in franchising will be able to point out any weak sides of the manual as well as fill any holes that may arise from a legal point of view. You can also get a franchise consultant to review the manual. This step is recommended especially if it is your first franchise business and this is the first time you are preparing such document.

• Make it official. Once you have the second draft ready, apply the final corrections and make the official version of the franchise operations manual. Remember that you may need to review it and change it on a regular basis as your business develops and the market changes.

Franchise Tools That Can Ease Your Daily Work

While many believe owning a franchise business is just a piece of cake while the franchisees are pulling the real load, they are very wrong. Establishing a franchise and making it successful and profitable a challenge. There are so many issues to address and so many things to take care of that the full scope of work can make your head spin. Most franchise owners work day in and day out long hours managing their business.

A franchise business owner has to address many issues – does the system is working smoothly, does all franchisees are following strictly the company procedures, are they profitable and so on. In addition a franchise owner should always look for selling new franchise units, which ultimately leads to more work. Luckily there are some franchise tools that can greatly reduce the load of your shoulders.

Franchise tools that can help run a franchise business

There are several tools developed especially for franchise business owners that can greatly reduce their every day work.

Paperwork is usually one of the biggest troubles for any business owner. This is where products like Franzoom Disclosure Document tool can help you significantly. Such tools have the most important set of documents – the franchise disclosure agreement, done and ready to be customized to perfectly fit your operation requirements. Moreover owning such franchising tools can give you piece of mind that you are updated with the latest Federal Trade Commission regulations.

Other useful franchising tools are those designed to help franchisors create the so called “holy grail” of any franchise business – the operations manual. While writing this bulky document sounds easy, in reality it is a challenging task. A professionally written operational manual should contain a lot of information and cover all possible situations. This document not only outlines the way each of the franchise units must execute their operations but protects your business and controls the quality standards throughout your franchisees network. A franchise operational manual should be regularly reviewed especially when you are planning to expand your franchise. Franchise tools such as Franzoom Franchise Operations Manual can really help you creating and maintaining a professional operational manual.

There are many other franchise tools that can ease the everyday work of any franchise owner. Tools that can help protect your intellectual property, assess the viability of any potential franchise request, make background checks or keep you on track with current state franchise regulations can be real time savers.

Reading all of the above certainly brings a lot of questions to your mind and probably the predominant one is “How much would these franchise tools cost me?” Money always matters especially in times of bad economy. The good side of things is that there are some very affordable franchise tools Moreover if you choose to by franchise tool kits rather than purchasing tools one by one you can actually save a great deal of money. Additionally using specialized franchise tools will actually reduce the workload and you will be able to expand your business without expanding your workforce.

5 Steps to Help You Expand Your Franchise Business

Establishing your franchise business, assuring its smooth operating and profitability is definitely a challenge. Expanding it to its optimum limits however is what many dream of since day one. How you can expand your franchise business and bring in its optimum amount of franchisee units? Here are five easy steps that can help you out through the process.

How to expand your franchise business:

1. Review your current situation. The fact that your franchise business is running smoothly with the current number of franchisees that you have doesn’t necessarily mean you are ready to expand your franchise business. Review all your documents and make sure they can hold the pressure of a larger number of units. Remember – controlling the operations of a few franchisees is absolutely not the same as controlling a big network of units. Double check all your legal documents and operational manuals and make sure there are no gaps in any of them.

2. Are you ready to compete? Once you make sure your business has the stable foundation to expand, check your competition. Having a small, local franchise business differs drastically from having a large, national or international network. Is your branding name and logos good enough? Are the products or services you sell competitive enough? Can you do better? Are your branding materials and products suitable for the new markets you are aiming at (especially if you are going international)? Getting these issues sorted out was crucial when you were launching your business and they will be crucial when you decide to expand your franchise.

3. Money matters. Money is always an issue to address. You may not need the same amount of money that you needed when you first started, however getting new business will require some additional expenses. In addition you should plan ahead any future expenses for extra office or storage space, new employees and office equipment and so on. If you don’t have enough resources to support an expansion check bank loans way in advance.

4. Set goals. Set realistic goals about how your franchise business will expand. How many new franchise units you want to have opened by the end of the month? After 3 months? By the end of the year? A goal orientated attitude will not only provide the frame for your expansion but will help you quickly review your progress. Remember – you must be realistic in your expectations and set realistic goals.

5. Push on marketing. Once you have all well thought of and prepared, push on your marketing. Your marketing efforts should be consistent with your expansion plan. Advertise in areas where you want to get new business, think of clever ways to get to your prospective partners. Good advertising strategies not always require fat marketing budgets so try to be creative and inventive rather than pour hundreds into traditional marketing. If you feel this is a hard task to do yourself, get an experienced marketer to help you set things up.

How to Prepare a Franchise Operating Manual

The franchise operating manual is the heart of any successful franchise business. This is one of the fundamental documents that blueprints the way every single operation in the franchise is executed. This manual should be prepared before your franchise business launches and can be refined as many times as needed along the way.

Writing a good franchise operation manual can be a challenging task. There are a lot of potential difficulties you may face especially if this is your first time writing similar documents. Here are a few tips that should help you get started.

How to prepare a good franchise operating manual:

• Keep in mind that the manual you are writing is like the Bible for your franchise business – it should include a detailed description of all good practices as well as information about the way every single aspect of the business operations. Make sure you have included all important details n the manual.
• Use simple, understandable language. This will ensure that the franchisees can understand what is written in the franchise operating manual.
  Write the manual in a way that you can edit and build upon later on. This is one of the documents that should change as the business grows and as business environment changes.
• If you are planning to grow internationally, you should take into account any local differences. You may need to prepare a different franchise operating manual for each one of the countries where you intend to grow.
• Get the manual reviewed by a qualified attorney or other legal consultant specializing in franchise issues. Once again, if you plan to expand internationally, make sure your overseas manuals are compliant with local laws and regulations.

After we have covered the main points that you need to keep in mind, let’s see which the main parts of any franchise operating manual are.

The nondisclosure agreement (NDA). This is one of the backbones of your franchise business. The agreement basically governs how confidential material, knowledge and information should be handled by the franchisees.

Timetable. The timetable is another fundamental part of your franchise operating manual. This is the section that explains the stages before a franchisee opens their business. For example this section may states what should happen 2 months before opening, 1 month before opening, 3 weeks before opening and so on. There is no standard way of compiling this section and you should tailor it according your type of business and requirements.

Staff policies. This section describes the way the franchisee will work – it covers everything from the way the business environment should look to working times and hygiene requirements. The office equipment and inventory can be included in this part of the franchise operating manual or in a stand alone section.

Business processes. This section of the franchise operating manual governs the way the business is executed. Working times, housekeeping, duties of the staff, inventory and equipment management, security and safety procedures are all described in this section.