Reading time: 3 minutes

For any business owner that wants to begin operating under a franchise model, developing an operations manual is a significant step. The franchise operations manual is not a legal document in itself. However, it runs through specific details of how the franchisee should run a franchise through practical explanations of the day-to-day operational tasks.

The Operations Manual Can Bind a Franchisee 

As noted above, the operations manual is not a legal document. That being said, it is standard practice for the franchise agreement to refer to the operations manual. Through this reference, the franchisee may also be bound by the terms of the manual as it forms part of the contractual terms of the franchise agreement. How the operations manual is drafted is then critical, and it is important to delineate the content that the franchisee should take as recommendations and the content that a franchisee is obliged to follow. Recommendations can come in the form of a description of your franchise’s core values whereas obligations can come in the form of key performance indicators.

What Should I Include in the Operations Manual?

The operations manual is usually quite detailed and includes aspects of the business that are needed to maintain consistency among all franchisees. When developing your operations manual, you should begin thinking about the following areas:

  • Products (what can/cannot be sold);
  • Suppliers (where can a franchisee purchase products);
  • Prices for goods and/or services;
  • Use of any software;
  • Use of technological equipment;
  • Marketing strategies;
  • Performance targets; and
  • Compliance standards.

When Should I Provide the Operations Manual?

As the operations manual usually includes details that are confidential in nature, many franchisors are hesitant in providing the operations manual to potential franchisees in the first instance. After the franchisor can gauge better the seriousness of a potential franchisee, they usually provide the franchise agreement and disclosure documents before providing the operations manual. As an extra precaution, many franchisors require the potential franchisee to sign a confidentiality or non-disclosure agreement before providing a copy of the operations manual.

Key Takeaways

The franchise agreement and disclosure document are not the only documents that a potential franchisor will need to set up their franchise. The operations manual is often one of the most detailed and comprehensive documents that need to be prepared, and the franchisor should take their time to ensure that the document is as detailed as possible.

Questions on how to draft your franchise’s Operations Manual? Let our franchise lawyers know on 1300 544 755.


How to Protect and Enforce Your Trade Mark

Wednesday 11 May | 11:00 - 11:45am

Protect your business’ brand from copycats and competitors. Register for this free webinar to learn how.
Register Now

Corporate Governance 101: Responsibilities for New Directors

Friday 13 May | 11:00 - 11:45am

If you are a new company director, join our free webinar to understand your legal compliance obligations. Register today.
Register Now

How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer