You have developed one or more pilots: the goal of your network development is to allow each member of the network to replicate your success. It is therefore necessary to formalize the recipes of your concept.
What is your expertise? You must be able to identify all the operating tools, through processes, data sheets, an organization, which will ensure that the pilot is well exploited.
Be careful, even if you do not have “know-how” in the legal sense of the term, an essential element in the creation of a franchise network, you can develop a network in another legal form: brand license, affiliation commission, concession… A specialist lawyer will usefully advise you on the legal form adapted to the mode of development you wish to adopt.
All of these identified elements must then be studied with a view to duplicating your concept for exploitation by a franchisee. You must ensure that the future affiliates of your network benefit from the same quality of tools and know-how that exist in the pilot.
In practice, it is necessary to directly interview the operational staff on the site, and to identify what they are working with: a sales brochure, a sales pitch, a cycle of understanding the customer’s request, etc. It is necessary to bring together all the elements that serve the pilot’s operational staff on a daily basis.
We will then transpose this information into operating manuals commonly called “the bible or the manop”, so that the franchisee can operate his point of sale as serenely and with the same performance as if he were in a branch.
Formalization of the concept
Why write an operating manual?
From a purely practical point of view, the operating manual will serve as a reference guide for franchisees to exploit the franchisor concept. It is therefore a transmission tool, an educational tool; it is thanks to this manual, which is the transmission belt, that the franchisee will be able to reproduce what the franchisor has done in its own branches, thus correctly operating its point of sale.
From a legal point of view, the operating manual is very important because it identifies the know-how and the provision of know-how is a condition for the validity of the franchise contract.
What is a good operating manual?
A good operating manual is a manual that, from a practical point of view, will be an exhaustive educational tool; it must from A to Z understand what is necessary to operate a franchise. This means that it must be free, that the information must be accessible but also that it must be complete, and I end on this on the practical level.
From a legal point of view, the identification of the know-how will allow the judge, if the franchisee challenges the qualities of this know-how, to ensure that it is secret and substantial.
I usually tell the brands that consult me that this operating manual must be large in volume and that I prefer to have it delivered to the Commercial Court by van several volumes of operating manual rather than carrying in my towel an operating manual that would consist of a few pages and which would ultimately be quite inconsistent.
So a good operating manual is a manual that identifies all the know-how and which, in fact, will reveal all its complexity by making it accessible.
Is the operating manual likely to create risks for the franchisor?
Yes, first of all a risk of nullity of the franchise contract for lack of consideration for royalties if the know-how is ever inconsistent, that is to say that the operating manual is downright indigent, because it is drafted too quickly, not reflecting the know-how.
A possible risk of reclassification of the franchise agreement as an employment contract, if this operating manual ever reveals an interference by the franchisor in the management of the franchisee’s company. What is called a hierarchical power in labor law that can be characterized by the imposition of opening hours of the point of sale, the franchisee’s agency, by the definition of internal rules of the franchisee’s company in the operating manual. But that’s not all; this manual can create significant risks in competition law and in particular reveal the existence of a price cartel, if for example the manual imposes minimum prices or absolute customer protections if it ever comes to reserve customers for a whole bunch of rules to protect the competitive interests of franchisees.
In this case, there can be a cartel, and this is serious since the sanction for the cartel can be up to 10% of the company’s global turnover. This is extremely heavy, in addition to damages.
These operating manuals really need to be reviewed by a lawyer to ensure that this type of risk is not present.
In addition to the operating manual, are there other supports that the franchisor must provide?
Reference systems are needed to ensure the homogeneity of the perception of the brand image by the public; this means that there must be a graphic charter, an architectural charter for the layout of the point of sale but these elements may appear in the operating manual.
Then, there are elements that are not strictly speaking the know-how transferable to the franchisees but which will be necessary for the management of the network, such as for example the developer processes, the visit reports and in general, it would be necessary to achieve a kind of standardization of all the documents to be exchanged with the franchisees to standardize them and that they have a sufficient quality that does not create risk in the execution of the franchise agreement.
La formalisation des outils du franchiseur (manuel opératoire et supports opérationnels)
