confidential operations manual - michael j childs · © [[franchise company]] • all rights...

© [[Franchise Company]] All Rights Reserved

Confidential Operations Manual [[v01.01.XX • January 1, 20XX]]

Supersedes all Previous Versions

THIS MANUAL IS FOR THE CONFIDENTIAL USE OF [[FRANCHISE COMPANY]] FRANCHISEES. IT IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND OTHER COUNTRIES AND BY INTERNATIONAL TREATY PROVISIONS. NO PART OF THIS MANUAL MAY BE PUBLISHED, BROADCAST, REWRITTEN, OR REDISTRIBUTED, REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS WITHOUT WRITTEN PERMISSION FROM [[FRANCHISE COMPANY]].

The [[Franchise Name]] Confidential Operations Manual is the property of:

[[Franchise Company]]

[[Street Address]] [[City/State/Zip]]

[[[email protected]]] [[(555) 555-1212]]

© [[Franchise Company]] • All Rights Reserved

TABLE OF CONTENTS (Restaurant Example)

CHAPTER PAGE

1. THE CONFIDENTIAL OPERATIONS MANUAL

OVERVIEW ................................................................................. 1.1

OWNERSHIP / MODIFICATION .......................................................... 1.1

CONFIDENTIALITY / RESPONSIBILITIES ................................................ 1.1

LIMITATIONS .............................................................................. 1.2

STORAGE .................................................................................. 1.2

RECEIPT .................................................................................... 1.2

2. INTRODUCTION TO THE FRANCHISE SYSTEM

WELCOME LETTER ........................................................................ 2.1

HISTORY ................................................................................... 2.2

SUPPORT ................................................................................... 2.2

Corporate Address ........................................................... 2.2

CONTACT INFORMATION ................................................................. 2.2

Franchise Compliance ....................................................... 2.2

Training .......................................................................... 2.2

Insurance ....................................................................... 2.3

Marketing ....................................................................... 2.3

3. SERVICES / OBLIGATIONS

SERVICES WE PROVIDE .................................................................. 3.1

Site Selection .................................................................. 3.1

Lease Approval ................................................................ 3.1

Initial Training ................................................................. 3.2

Other Initial Support ........................................................ 3.2

Opening Support ............................................................. 3.2

Ongoing Training and Support ........................................... 3.2

Suggested Retail Prices .................................................... 3.3

Approved Suppliers .......................................................... 3.3


Marketing Programs / Brand Building Fund .......................... 3.3

Internet ......................................................................... 3.4

VISITS FROM US ......................................................................... 3.4

CONVENTIONS ............................................................................ 3.5

YOUR OBLIGATIONS ...................................................................... 3.5

4. INITIAL TRAINING OVERVIEW ................................................................................. 4.1

Initial Training ................................................................. 4.1

Expenses ........................................................................ 4.1

Hotels ............................................................................ 4.2

Scheduling Initial Training ................................................. 4.2

Instructional Materials ...................................................... 4.3

Training Agenda .............................................................. 4.3

Training Schedule ............................................................ 4.3

ADDITIONAL TRAINING .................................................................. 4.5

Food Safety Training ........................................................ 4.5

5. OPENING FOR BUSINESS

OVERVIEW ................................................................................ 5.1

FORMING AN ENTITY ..................................................................... 5.1

Sole Proprietorship ........................................................... 5.1

General Partnership ......................................................... 5.1

Limited Partnership .......................................................... 5.2

“C” Corporation ............................................................... 5.2

“S” Corporation ............................................................... 5.2

Limited Liability Company (LLC) ......................................... 5.3

Naming Your Entity .......................................................... 5.3

Fictitious Name (DBA) ...................................................... 5.3

Transfer to Entity ............................................................. 5.4

6. SITE SELECTION

OVERVIEW ................................................................................. 6.1

LOCATION GUIDELINES .................................................................. 6.1


Size ............................................................................... 6.1

Visibility ......................................................................... 6.1

Retail Categories ............................................................. 6.1

Parking .......................................................................... 6.2

Market Analysis ............................................................... 6.2

Approval of Proposed Sites ................................................ 6.3

Lease Requirements ......................................................... 6.3

Approval of Lease ............................................................ 6.4

7. LICENSES / PERMITS / TAXES

OVERVIEW ................................................................................. 7.1

BUSINESS LICENSES AND PERMITS .................................................... 7.1

GOVERNMENT REQUIREMENTS .......................................................... 7.1

Employer Identification Number ......................................... 7.1

Sales Tax Number ............................................................ 7.2

Business License .............................................................. 7.2

State Tax Registrations ..................................................... 7.2

Permits .......................................................................... 7.2

Optional Certifications ...................................................... 7.3

ADDITIONAL HELP ........................................................................ 7.3

State Information Web Sites.............................................. 7.3

Attorney / CPA ................................................................ 7.3

TAXES ..................................................................................... 7.3

8. BANK ACCOUNTS / INSURANCE

BANK ACCOUNTS ......................................................................... 8.1

Opening a Bank Account ................................................... 8.1

REQUIREMENTS FOR BANK ACCOUNT .................................................. 8.1

Overdraft Protection ......................................................... 8.1

Drafting Account .............................................................. 8.1

Changing Bank Accounts ................................................... 8.2

Business Checks .............................................................. 8.2

Line of Credit .................................................................. 8.2

Insufficient Funds ............................................................ 8.2


INSURANCE ................................................................................ 8.2

General Insurance Requirements ....................................... 8.2

Minimum Coverage Amounts ............................................. 8.3

Changes to Minimum Requirements .................................... 8.3

Optional Insurance Coverage ............................................. 8.3

Insurance Company Requirements ..................................... 8.4

9. LOCATION BUILD-OUT OVERVIEW ................................................................................. 9.1

Architect ......................................................................... 9.1

General Contractor ........................................................... 9.2

MANAGING PROFESSIONALS ............................................................ 9.3

A1A Contract Documents .................................................. 9.3

UTILITIES / SERVICES ................................................................... 9.4

INITIAL INVENTORY AND SUPPLIES ..................................................... 9.5

Purchases from Approved Suppliers .................................... 9.5

Initial Inventory .............................................................. 9.5

Required Fixtures / Furnishings / Equipment ........................ 9.5

Interior and Exterior Signs ................................................ 9.5

COMPUTER SYSTEMS ..................................................................... 9.6

Office Computer .............................................................. 9.6

Point-of-Sale System (POS) .............................................. 9.6

Merchant Account ............................................................ 9.7

10. UNIFORMS

OVERVIEW ................................................................................. 10.1

FRONT OF THE HOUSE ................................................................... 10.1

Branded Shirts ................................................................ 10.1

Slacks / Pants ................................................................. 10.2

Hats .............................................................................. 10.2

Name Badges .................................................................. 10.3

Aprons ........................................................................... 10.3

Shoes ............................................................................ 10.3

PERSONAL APPEARANCE ................................................................. 10.3


Grooming ....................................................................... 10.3

Hair ............................................................................... 10.4

Jewelry / Tattoos ............................................................. 10.4

BACK OF THE HOUSE / KITCHEN ....................................................... 10.5

Employee Purchases of Branded Clothing ............................ 10.5

11. GRAND OPENING OVERVIEW ................................................................................. 11.1

Grand Opening Schedule................................................... 11.1

Grand Opening Kit ........................................................... 11.1

Direct Mail Campaign ....................................................... 11.2

Soft Opening ................................................................... 11.2

Follow-Up Meeting ........................................................... 11.3

Grand Opening ................................................................ 11.3

Media Day ...................................................................... 11.4

PRE-OPENING CHECKLIST ............................................................... 11.4

12. HUMAN RESOURCES

OVERVIEW ................................................................................. 12.1

Our Participation .............................................................. 12.1

Your Responsibilities ........................................................ 12.2

EMPLOYMENT LAW BASICS ............................................................. 12.2

QUESTIONS YOU CANNOT ASK ......................................................... 12.2

Posting Labor Laws .......................................................... 12.5

Handling Discrimination and Harassment ............................. 12.5

Immigration Reform and Control Act of 1986 (IRCA) ............. 12.7

Fair Labor Standards Act (FLSA) ........................................ 12.7

Americans with Disabilities Act (ADA) ................................. 12.7

Age Discrimination in Employment Act (ADEA) ..................... 12.8

Consolidated Omnibus Reconciliation Act of 1985 (COBRA) .... 12.8

Title VII of the Civil Rights Act of 1964 ................................ 12.8

State Employment Laws ................................................... 12.9

OSHA ..................................................................................... 12.9

Federal Standards ............................................................ 12.9


State OSHA Programs ...................................................... 12.10

EMPLOYEE HANDBOOK ................................................................... 12.10

13. STAFFING / HIRING

OVERVIEW ................................................................................. 13.1

Advertising Job Openings .................................................. 13.1

RECRUITING ............................................................................... 13.1

Restaurant-Specific Websites ............................................. 13.1

General Job Posting Websites ............................................ 13.2

Referrals ........................................................................ 13.2

Classified Ads .................................................................. 13.3

Help Wanted Signs ........................................................... 13.3

WRITING THE AD ......................................................................... 13.3

AIDA .............................................................................. 13.3

Writing Tips .................................................................... 13.4

JOB POSTING TEMPLATE ................................................................. 13.4

JOB APPLICATION ......................................................................... 13.5

The First Interview ........................................................... 13.5

Tips for Interviewing ........................................................ 13.6

After the Interview ........................................................... 13.7

Employee File .................................................................. 13.8

Keeping Records .............................................................. 13.9

JOB DESCRIPTIONS ....................................................................... 13.9

BACKGROUND CHECKS ................................................................... 13.10

PRE-EMPLOYMENT TESTING ............................................................. 13.11

Drug Tests ...................................................................... 13.11

CONFIDENTIALITY ........................................................................ 13.11

Confidentiality and Non-Compete Agreement ....................... 13.11

14. TRAINING / ORIENTATION

OVERVIEW ................................................................................. 14.1

TRAINING .................................................................................. 14.1

ORIENTATION ............................................................................. 14.2

Orientation Topics ............................................................ 14.2


15. PERSONNEL

OVERVIEW ................................................................................. 15.1

Federal and State Laws .................................................... 15.1

Franchise Standards .................................................................. 15.1

Work Rules ..................................................................... 15.1

PAYING YOUR EMPLOYEES ............................................................... 15.2

Wages ............................................................................ 15.2

Minimum Wage ............................................................... 15.3

Tips ............................................................................... 15.3

Overtime Pay .................................................................. 15.3

Benefits .......................................................................... 15.4

EMPLOYEE SCHEDULING ................................................................. 15.5

EMPLOYEE MANAGEMENT FORMS ....................................................... 15.5

EMPLOYEE BUSINESS COMMITMENT .................................................... 15.5

PERFORMANCE EVALUATIONS ........................................................... 15.6

EMPLOYEE DISCIPLINE ................................................................... 15.8

RESIGNATION / TERMINATION .......................................................... 15.9

Resignation ..................................................................... 15.9

Termination .................................................................... 15.9

Grounds for Termination ................................................... 15.10

Illegal Termination ........................................................... 15.10

Post-Termination ............................................................. 15.10

Final Paychecks ............................................................... 15.11

Explaining Termination to Employees .................................. 15.11

Employee References ....................................................... 15.11

16. DAILY OPERATIONS OVERVIEW ................................................................................. 16.1

HOURS OF OPERATION ................................................................... 16.1

DELIVERY / TAKE-OUT / CATERING .................................................... 16.1

Third-Party Food Delivery ................................................. 16.2

CUSTOMER SERVICE ..................................................................... 16.3

Customer Service Policy .................................................... 16.3

Customer Feedback .......................................................... 16.3


Handling Customer Complaints .......................................... 16.4

The Recovery Process ....................................................... 16.4

Customer Service Hotline .................................................. 16.5

Refunds .......................................................................... 16.6

LOST AND FOUND ......................................................................... 16.6

Credit Cards .................................................................... 16.6

Valuables ........................................................................ 16.6

Clothing ......................................................................... 16.6

Cash .............................................................................. 16.7

SERVICE ................................................................................... 16.7

Greeting Customers ......................................................... 16.7

Answering the Telephone .................................................. 16.8

Creating the Right Ambience ............................................. 16.9

Product Knowledge .......................................................... 16.10

MERCHANDISING ......................................................................... 16.10

Standards ....................................................................... 16.10

SIGNAGE ................................................................................... 16.10

HEALTH INSPECTIONS .................................................................... 16.11

Before Opening ............................................................... 16.11

Food Prep and Storage ..................................................... 16.11

Pre-Opening Inspection .................................................... 16.12

Ongoing Inspections ......................................................... 16.12

The Inspection Report ...................................................... 16.13

Health Inspector Visits ...................................................... 16.13

Preparing for a Health Inspection ....................................... 16.14

ServSafe® Food Safety Training ......................................... 16.15

SANITATION ............................................................................... 16.15

WASHING HANDS ......................................................................... 16.16

When to Wash Hands ....................................................... 16.16

How to Wash Hands ......................................................... 16.16

Creating Handwashing Awareness ...................................... 16.17

OPENING / CLOSING CHECKLISTS ...................................................... 16.17


17. SALES TRANSACTIONS / EMPLOYEE DISCOUNTS / PERKS

SALES TRANSACTIONS ................................................................... 17.1

Point-of-Sale (POS) .......................................................... 17.1

Credit Cards .................................................................... 17.1

Personal Checks .............................................................. 17.1

Handling Cash ................................................................. 17.1

Suggested Prices ............................................................. 17.2

GIFT CERTIFICATES ...................................................................... 17.2

Redeeming Gift Certificates ............................................... 17.3

EMPLOYEE DISCOUNTS ................................................................... 17.3

Employee Discount Policy .................................................. 17.3

SAMPLE EMPLOYEE DISCOUNT POLICY ................................................. 17.4

Application ...................................................................... 17.4

Eligibility ........................................................................ 17.4

Employee Discount Card ................................................... 17.5

Online Purchases ............................................................. 17.5

Personal Use ................................................................... 17.5

Branded Products ............................................................ 17.5

EMPLOYEE PERKS ......................................................................... 17.6

SAMPLE EMPLOYEE PERKS POLICY ...................................................... 17.6

Expenses ........................................................................ 17.6

Company Car Policy ......................................................... 17.6

18. ORDERING / INVENTORY CONTROL

OVERVIEW ................................................................................. 18.1

Cash Flow ....................................................................... 18.1

Order Frequency .............................................................. 18.1

Order System .................................................................. 18.2

CREATE AN ORDER GUIDE ............................................................... 18.2

Order Guide Categories .................................................... 18.2

Food Inventory ................................................................ 18.3

Bar Inventory .................................................................. 18.3

Operating Inventory ......................................................... 18.3

ORDER GUIDE CONTENTS ............................................................... 18.4


Item Description .............................................................. 18.4

Pack and Size .................................................................. 18.4

Purchase Unit .................................................................. 18.4

Count Unit ...................................................................... 18.4

Price .............................................................................. 18.5

Vendor ........................................................................... 18.5

Vendor Item Code ............................................................ 18.5

Par Level ........................................................................ 18.5

Order History .................................................................. 18.6

On-Hand Count ............................................................... 18.6

STORAGE .................................................................................. 18.6

Arranging Products .......................................................... 18.6

Taking Inventory ............................................................. 18.7

Working With Your Food Distributor .................................... 18.7

POINT-OF-SALE SYSTEM (POS) ....................................................... 18.8

AUTOMATED ORDERING OVERVIEW .................................................... 18.8

POS Programming ............................................................ 18.9

Recipe Programming ........................................................ 18.9

Inventory Control ............................................................ 18.9

Electronic Ordering Interface ............................................. 18.10

HYBRID ORDERING SYSTEM ............................................................. 18.10

PROPER STORAGE ........................................................................ 18.10

Storage Guidelines ........................................................... 18.11

Incoming Orders .............................................................. 18.11

ORGANIZING SUPPLIES AND INVENTORY .............................................. 18.11

Storage Racks ................................................................. 18.12

Dating Deliveries ............................................................. 18.12

SPOILAGE .................................................................................. 18.12

Preventing Spoilage ......................................................... 18.12

VENDOR REQUIREMENTS ................................................................ 18.13

Refusing Deliveries .......................................................... 18.13

Check-In Procedures ........................................................ 18.14


19. CLEANING / MAINTENANCE

OVERVIEW ................................................................................. 19.1

Cleanliness Image ............................................................ 19.1

Clean As You Go .............................................................. 19.1

FRONT-OF-HOUSE CLEANING ........................................................... 19.2

Training Staff .................................................................. 19.3

Equipment and Supplies ................................................... 19.3

Front-of-House Cleaning Checklist ...................................... 19.4

BACK-OF-HOUSE CLEANING ............................................................ 19.6

Surface Materials / Zones ................................................. 19.6

Cleaning Kitchen Equipment .............................................. 19.6

CLEANING FOOD PREP SURFACES ...................................................... 19.7

CLEANING SUPPLIES ..................................................................... 19.9

- KITCHEN CLEANING SCHEDULE ......................................................... 19.11

After Hours ..................................................................... 19.12

Open Hours .................................................................... 19.12

MANAGEMENT CONTROL ................................................................. 19.12

Professional Cleaning Service ............................................ 19.13 20. SAFETY OVERVIEW ................................................................................. 20.1

COMMON WORKPLACE INJURIES AND PREVENTION .................................. 20.1

Slips / Falls .............................................................................. 20.1

Knife and Other Cuts ................................................................. 20.1

Burns / Scalds .......................................................................... 20.2

UNCOMMON WORKPLACE INJURIES AND PREVENTION ............................... 20.2

Violence ......................................................................... 20.2

Automobile Accidents ....................................................... 20.3

Bodily Fluids Exposure ...................................................... 20.3

TRAINING AND PREVENTION ............................................................ 20.3

Safety Training ................................................................ 20.4

OSHA Workplace First-Aid Program .................................... 20.4

Safety Supplies ............................................................... 20.5

Crisis Policy .................................................................... 20.6


Reporting Accidents ......................................................... 20.6

Worker’s Compensation .................................................... 20.6

Fire Safety ...................................................................... 20.7

Alarm System ................................................................. 20.8

21. ADVERTISING / MARKETING

OVERVIEW ................................................................................. 21.1

ADVERTISING OPTIONS .................................................................. 21.1

Website and Internet Advertising ....................................... 21.2

Social Media Marketing ..................................................... 21.2

Reputation Management ................................................... 21.3

Food Apps ...................................................................... 21.3

Direct Mail ...................................................................... 21.4

Direct Mail Services .......................................................... 21.5

Every Door Direct Mail (EDDM) .......................................... 21.5

White / Yellow Pages ........................................................ 21.5

Magazines ...................................................................... 21.6

Newspapers .................................................................... 21.7

PUBLIC RELATIONS ....................................................................... 21.8

Press Releases ................................................................ 21.8

Chamber of Commerce ..................................................... 21.9

Better Business Bureau (BBB) ........................................... 21.9

Community Service .......................................................... 21.9

GEOGRAPHIC (GEO) TARGETING ....................................................... 21.10

Designated Market Area (DMA) .......................................... 21.10

Area of Dominant Influence (ADI) ...................................... 21.10

Metropolitan Statistical Area (MSA) .................................... 21.11

BRAND IDENTITY ......................................................................... 21.11

Marketing Material Approval .............................................. 21.11

REQUIRED ADVERTISING / MARKETING COSTS ...................................... 21.12

Direct Mail Campaign ....................................................... 21.12

Postcard Artwork ............................................................. 21.12

Mailing Lists .................................................................... 21.13

Local Advertising / Marketing ............................................ 21.14


Cooperative Advertising .................................................... 21.14

Brand Building Fund ......................................................... 21.14

22. ACCOUNTING / REPORTING / RECORD KEEPING

OVERVIEW ................................................................................. 22.1

Monthly Reporting and Fees .............................................. 22.1

Additional Fees ................................................................ 22.1

Gross Sales ..................................................................... 22.2

ACCOUNTING .............................................................................. 22.2

QuickBooks ..................................................................... 22.2

Chart of Accounts ............................................................ 22.2

Electronic Transfer of Funds .............................................. 22.3

Record Keeping ............................................................... 22.3

End of Year Reports ......................................................... 22.3

23. MENUS / RECIPES / PRESENTATION

OVERVIEW ................................................................................. 23.1

Confidentiality ................................................................. 23.1

MENUS ..................................................................................... 23.1

RECIPE BOOK ............................................................................. 23.2

PLATING & PRESENTATION .............................................................. 23.2 24. RESOURCES OVERVIEW ................................................................................. 24.1

SECTION ONE • EMPLOYEE RELATIONS ................................................ 24.2

Application Acknowledgement ............................................ 24.3

Interview Form ................................................................ 24.4

Telephone Reference Form ................................................ 24.10

Applicant Rejection Letter ................................................. 24.13

Discipline Form ................................................................ 24.14

Direct Deposit Authorization .............................................. 24.16

Exit Interview Form .......................................................... 24.17

Termination Meeting ........................................................ 24.19

Termination Checklist ....................................................... 24.20


Worker’s’ Compensation Claims Checklist ............................ 24.22

Emergency Notification List ............................................... 24.26

APPLICATION FOR EMPLOYMENT ........................................................ 24.27

CONFIDENTIALITY AND NON-COMPETE AGREEMENT ................................. 24.29

JOB DESCRIPTIONS ....................................................................... 24.31

General Manager ............................................................. 24.31

Host / Hostess ................................................................. 24.36

Server / Barista ............................................................... 24.39

Bartender ....................................................................... 24.42

Line Cook ....................................................................... 24.46

Prep Cook ....................................................................... 24.50

Dishwasher ..................................................................... 24.55

Busser ........................................................................... 24.58

SECTION TWO • MANAGEMENT POLICIES ............................................. 24.62

Emergency Instructions .................................................... 24.63

General Work Rules ......................................................... 24.64

Handwashing Poster ......................................................... 24.66

Cash Checkout Sheet ....................................................... 24.67

Holiday / Vacation Pay ...................................................... 24.68

Non-Harassment / Non-Discrimination Policy ....................... 24.70

Tobacco-Free Workplace Notice ......................................... 24.72

Workplace Safety ............................................................. 24.74

SECTION THREE • CHECKLISTS ......................................................... 24.75

New Employee ................................................................ 24.76

Employee Onboarding ...................................................... 24.78

Manager Opening ............................................................ 24.83

Manager Closing .............................................................. 24.87

Manager Shift Change ...................................................... 24.91

Server Side-Work, Opening ............................................... 24.93

Server Side-Work, Running ............................................... 24.96

Server Side-Work, End-of Shift .......................................... 24.97

Server Side-Work, Closing ................................................ 24.99

Bartender Opening ........................................................... 24.102

Bartender Shift Change .................................................... 24.105


Bartender Closing ........................................................... 24.108

Bartender Weekly Cleaning & Maintenance .......................... 24.111

Kitchen & Storage Cleaning ............................................... 24.112

SECTION FOUR • FRANCHISE SYSTEM ................................................. 24.117

Approved Suppliers .......................................................... 24.118

Required Fixtures, Furnishings, Equipment .......................... 24.119

Initial Inventory .............................................................. 24.120

Electronic Transfer of Funds Authorization ........................... 24.121

Chart of Accounts ............................................................ 24.122

Acknowledgement of Receipt of Manual ............................... 24.123

25. EMPLOYEE HANDBOOK TEMPLATE

OVERVIEW ................................................................................. 25.1

INSTRUCTIONS ............................................................................ 25.1

Adding Your Information ................................................... 25.2

ACKNOWLEDGEMENT OF RECEIPT OF EMPLOYEE HANDBOOK ....................... 25.29

TOTAL NUMBER OF PAGES ...................................................................... 300+

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CHAPTER 1 • THE CONFIDENTIAL OPERATIONS MANUAL

OVERVIEW The [[Franchise Name]] Confidential Operations Manual was designed to be an easy-to-use training and reference manual to help you open and run your new business. You should read the Manual through at least once, and make it an active tool in the management of your [[Franchise Name]] franchise. The approach we took when writing the Manual is that you don’t know anything about owning a business or [[describe the type of business]], even if some of you do, and that you are starting with a clean sheet of paper. Our goal with the Manual and training is that when finished, you will have the information and know-how you need to open and run your [[Franchise Name]] business successfully. No manual, however, can anticipate every situation that may come up. When you have a question or problem that isn’t in the Manual, call us. Most likely we have dealt with that situation, and if we haven’t, we can help you find a solution. You don’t have to go it alone. OWNERSHIP / MODIFICATION The Manual is our property. It is on loan to you during the Term of your Franchise Agreement. You may not duplicate, copy, show or broadcast the contents of the Manual during or after the Term of your Franchise Agreement. We can modify or supplement the Manual on notice or delivery to you. You are required to keep the Manual current at all times. On the termination or non-renewal of your [[Franchise Name]] franchise, you must completely remove the Manual from all computer systems or otherwise destroy it. You are required to return printed Manuals to us. CONFIDENTIALITY / RESPONSIBILITIES You are required to operate your [[Franchise Name]] franchise by our standards, specifications, policies, and procedures in the Manual or as otherwise communicated to you. You must treat the information in the Manual and any other manuals or supplemental material supplied by us as confidential. You may not show or share any confidential or other information given to you about our methods or procedures during or after the term of your Franchise Agreement, other than your employees or financial advisors who reasonably need access to this

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information, and only if the confidential information is made available to them with this obligation of confidentiality. You may only give access to the Manual to employees who have signed the Confidentiality and Non-Compete Agreement in the Resources section of this Manual, and have a legitimate need to know the subject matter. If you share any part of the Manual with an employee, it must be in your [[Franchise Name]] business location. Employees and contractors may not remove any part, pages or copies of the Manual from your [[Franchise Name]] business location. LIMITATIONS Nothing in the Franchise Agreement prohibits you from using the Confidential Information in this Manual in the operation of your [[Franchise Name]] business under the terms of your Franchise Agreement. STORAGE The Manual must be stored in a locked safe when you are not using it. If the Manual is stored electronically on your computer, access to the computer system must be password protected and the password known only by you. RECEIPT Please sign and return the Acknowledgment of Receipt of Manual form in the Resources section of this Manual.

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CHAPTER 2 • INTRODUCTION TO THE FRANCHISE SYSTEM

WELCOME LETTER FROM OUR FOUNDER Welcome and congratulations on your decision to join the [[Franchise Name]] franchise system! As the founder of the company, I want to assure you that we will do everything we can to provide you with the training, knowledge, and expertise you need to open and run a successful [[Franchise Name]] business. Having been in business for over [[XX years]] in the [[type of business]], we have developed systems and processes that you can use to launch and then speed up the growth and profitability of your [[Franchise Name]] business. One key to our success has been our focus on the customer, and this will be your focus too. Communication and being responsive to our customers’ needs is a cornerstone in the development of a loyal customer base and customer referrals. We realize that our success depends on your success, and we will be with you every step of the way. All of us will be available to answer questions, work through issues and help train you and your staff. While you are building your [[Franchise Name]] business and credibility in your local market, we will continue to grow the [[Franchise Name]] brand and develop and foster positive working relationships with suppliers, national advertising publications and key vendors. We look forward to working with you as we all set out to create the leading [[type of business]] franchise in the country. We trust that your experience with us will be rewarding, challenging, and profitable. Very truly yours, [[Owner’s Name]] [[Owner’s Title]] [[Company Name]]

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HISTORY (Insert Company History Here) SUPPORT From time to time, you will encounter situations and questions that will require an answer from the corporate staff of [[Company Name]]. The following is a list of departmental contacts with a short description of areas of responsibility. If you are unable to determine whom to contact from the list below, call or email your best guess and if not right, they will gladly guide you in the right direction. Corporate Address [[Corporation Name]] [[HQ Address]] [[HQ City, State, Zip]] [[HQ Fax]] [[[email protected]]] CONTACT INFORMATION Franchise Compliance Questions or help with franchise documents and compliance with system standards. [[Name Cell/Direct: (555) 555-1212 [email protected]]] Training Questions about training schedules, attendees and scheduling Initial Training. [[Name Cell/Direct: (555) 555-1212 [email protected]]]

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Insurance Questions about insurance coverage and adding flood or other types of insurance. [[Name Cell/Direct: (555) 555-1212 [email protected]]] Marketing Questions about ad placement or approval of local ads, stock ads for download and custom ad design (creative) and cost. [[Name Cell/Direct: (555) 555-1212 [email protected]]]

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CHAPTER 3 • SERVICES / OBLIGATIONS

SERVICES WE PROVIDE This chapter is an overview of the services we provide all [[Franchise Name]] franchise owners. There is also a section on some of your obligations under the Franchise Agreement. Refer to your Franchise Agreement for all of the legal requirements and definitions of yours and our responsibilities.

NOTE: Remember that you are an independent businessperson and responsible for the day-to-day operations of the [[Franchise Name]] business. At the same time, we are here to help you. If you get stuck, we’re just a phone call away.

Site Selection (Make sure the following agrees with the Franchise Disclosure Document (FDD) and Franchise Agreement) The Site Selection section in this Manual has our site selection criteria. You can use the site selection criteria to find suitable locations to submit to us to evaluate your proposed site or sites. You may not lease a location for your [[Franchise Name]] business until you have our written approval. Generally, we will respond to your site approval requests within two weeks after you have supplied the required information. You can help speed up this process by making sure that the proposed site meets our site selection criteria before sending the proposed locations to us. If you favor a site that does not meet our site selection criteria, please give us a written description of all of the reasons you feel the site should be approved. Lease Approval The Site Selection section in this Manual includes a list of things to take into consideration when negotiating your lease. Your Franchise Agreement also contains some mandatory provisions that your lease agreement must include. You may not sign a lease for a location until you have received our written approval. Generally, we will respond to your lease approval requests within one week after you have supplied all of the required information. You can help speed up this process by

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making sure that the proposed lease contains all of the required provisions and other information needed. Although we review the lease and may make suggestions, we do not help you negotiate your lease. Initial Training We provide an initial training program for you and one other person at mutually convenient times, typically within 120 days after you sign the Franchise Agreement. See the Initial Training Section in this Manual for more information about scheduling and attending Initial Training. Other Initial Support We will provide you with reasonable consultation regarding constructing, remodeling or decorating your location. Opening Support (Make sure the following agrees with the FDD and Franchise Agreement) We will make available one or more of our key personnel to help you in the opening of the [[Franchise Name]] business. You must request this additional help and assistance at least 30 days before opening, and is available as time and personnel permits. We don’t charge for this support, but you must pay for our travel and living expenses while at your location. The Grand Opening section of this Manual has more information about your Grand Opening. Ongoing Training and Support We will:

Periodically offer training programs at our corporate location, at an existing [[Franchise Name]] location or another place we choose.

Make available one or more of our key personnel to help you in the ongoing

operation of the [[Franchise Name]] business. This added help must be requested by you and is available as time and personnel permits. We don’t charge for this support if asked for in the first 90 days in operation, but you must pay for our travel and living expenses while at your location.

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Offer continuing help and guidance through information posted on the [[Franchise Name]] website, memos, bulletins or newsletters, and consultations by phone, email or in person, including advisory services on promotional, business and operations, and analysis of your sales and marketing.

When available, we will supply you with materials and bulletins on sales

techniques, marketing developments, and other products either without charge or by our current price lists.

Suggested Retail Prices We may make suggestions to you regarding your pricing policies, but you have the exclusive right as to the minimum prices you charge for the products and services at the [[Franchise Name]] business. We can establish maximum prices for sales promotions. Any list of prices we furnish to you are suggestions only. Except for specifically stated maximum pricing, your relationship with us will not be affected if you don’t use our pricing suggestions. Approved Suppliers We will maintain and provide you with a list of approved items and a list of approved suppliers, and periodically update these lists as needed. Marketing Programs / Brand Building Fund (Make sure the following agrees with the FDD and Franchise Agreement) We or our affiliate will perform advertising, public relations, promotion, and market research activities to promote public awareness and patronage of our franchises. Each franchisee must participate in the Brand Building Fund and Marketing Programs we require and pay a [[_____%]] monthly Brand Building Fund fee. (Alternate text if no brand building fund, or in addition to the brand building fund requirement) We will develop and make available to you advertising and promotional material for use in the [[Franchise Name]] business. Stock camera-ready art is available for download at no charge. Custom-camera ready art is designed by our in-house creative department at our cost plus an administrative fee to develop those materials, plus any handling charges.

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Internet We or our affiliates will sponsor and maintain the [[Franchise Name]] website. As long as you are not in default under the Franchise Agreement, your [[Franchise Name]] restaurant will be listed as a location on our site. VISITS FROM US (Make sure the following agrees with the FDD and Franchise Agreement) We will visit your [[Franchise Name]] business regularly, usually two times a year. This visit gives us an opportunity to see how you are doing, and for you to ask our key personnel any questions you may have about operations. We may use this opportunity to conduct a formal inspection of your [[Franchise Name]] restaurant or to provide additional training. We will usually provide you with notice of a planned visit, but we can show up unannounced. We appreciate the cooperation of you, your managers and employees during those visits. The following will be a part of any formal inspection visits from us:

Our cleanliness standards of your employees and restaurant.

Training of [[Franchise Name]] employees following the standards in this Manual or other communications from us.

The presence, maintenance and proper use of required equipment.

Employee appearance and performance, and the use and condition of required

uniforms.

The number of customer complaints.

Our quality standards of all raw and finished products compliance.

Exterior and interior restaurant appearance.

Preparation and service of finished products.

The menu and availability of a full line of products.

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CONVENTIONS

(Make sure the following agrees with the FDD and Franchise Agreement) We may hold or sponsor franchise conventions or meetings relating to new products and product preparation procedures, new operational procedures or programs, restaurant management, sales, traditional and social media marketing, entertainment formats and like topics. We will also recognize franchisees for their achievements, and you will be able to exchange information between fellow franchisees and our personnel about the [[Franchise Name]] system. We may require you and your key personnel attend each Annual Conference and pay our then-current registration fee for all attendees. YOUR OBLIGATIONS (Make sure the following agrees with the FDD and Franchise Agreement) You must comply with the requirements in the Franchise Agreement and this Manual. The following is a brief outline of some of your obligations under the Franchise Agreement.

Locate and lease an approved site for your [[Franchise Name]].

Attend and complete the initial training program to our satisfaction.

Prepare approved plans for the construction, build-out or remodeling of the site.

Obtain and maintain all required permits, licenses, and zoning variances.

Complete the construction, build-out, and remodeling of your [[Franchise Name]] restaurant.

Install all required equipment, furnishing, fixtures, signs, and décor.

Purchase and stock all of the required inventory and supply items.

Buy and maintain the required insurance coverage.

Open bank accounts as we require and authorize electronic transactions that we will initiate.

Open for business within [[six months]] after signing the Franchise Agreement.

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Use our grand opening promotional services for your local advertising, public

relations, promotion, and other marketing activities for your grand opening.

Continually operate and maintain the [[Franchise Name]] business.

Offer all approved items and services, and no other items or services.

Participate in all advertising, public relations, promotions, market research, and other marketing activities for the franchise system.

Keep the business open and in normal operation for the minimum required hours and days.

Require your managers and other [[Franchise Name]] employees wear uniforms and trade dress we specify.

NOTE: Refer to your Franchise Agreement and other parts of this Manual for more details about these and other obligations. Make sure you read the Franchise Agreement between you and us carefully.

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CHAPTER 4 • INITIAL TRAINING

OVERVIEW (Make sure the following agrees with the FDD and Franchise Agreement) Your initial training will take [[5]] days and cover the topics in the chart below. We will give you a complete schedule before the start of training. Initial training is held at our corporate offices in [[City, State]], at an existing [[Franchise Name]] restaurant or other location we choose. Initial Training We conduct the initial training on an as-needed basis. We must approve any employees, management or other personnel in writing before attending the training courses. Attendance by you and your manager is mandatory. Initial training must be completed successfully to our satisfaction at least [[45]] days before you open your [[Franchise Name]] business.

If you are an entity, then you and the person designated by you to assume primary responsibility for the management of the business are required to complete the training program.

If you are one or more individuals, each franchise owner must complete the

training program.

If you or your owners are not directly involved in day-to-day operations, we require your manager to complete the initial training program. Any successor manager you employ must complete the initial training program before or as soon as possible after being named as your manager.

Expenses (Make sure the following agrees with the FDD and Franchise Agreement) We do not charge for the initial training program for you and one other person, but you are responsible for making arrangements and paying the travel and living expenses for anyone that attends. If you wish to include more than two people in the initial training session, you must get approval from us when you schedule your training session. To cover training

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materials and additional staff, you may be charged a fee for other trainees you register for the training session. You are responsible for your travel expenses to and from the training facility. [[You are also responsible for your morning and evening meals and lodging during your stay.]] Hotels We recommend that you locate and stay in a hotel close to the training facility. For your convenience, here is a list of hotels close to our corporate offices. You may also call us for more recommendations. [[Hotel Name Hotel Address Hotel City, State, Zip Hotel Phone Number]] [[Hotel Name Hotel Address Hotel City, State, Zip Hotel Phone Number]] [[Hotel Name Hotel Address Hotel City, State, Zip Hotel Phone Number]] [[Hotel Name Hotel Address Hotel City, State, Zip Hotel Phone Number]] Scheduling Initial Training We require you to schedule your training session no less than [[three months]] before your grand opening and complete training at least [[45]] days before your Grand Opening. You can schedule your initial training session by calling corporate headquarters at [[(555) 555-1212.]] When you schedule your initial training session, we will give you the training location if not at our corporate offices.

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Instructional Materials The instructional materials will be provided to you at the start of training, and include the [[Franchise Name]] Operations Manual, videos, checklists, demonstrations and various handouts. Training Agenda Your initial training will take [[5]] days and include classroom and on the job training. The initial training program covers the topics shown in the chart below. [[You will typically fly in Sunday and leave for home the following Saturday.]] It is the nature of [[Franchise Name]] businesses that all parts of training are combined. For that reason, there are no listed starting and stopping times for classroom or on-the-job training. The times listed are our best estimates of time devoted to each subject, classroom and on-the-job training, and may differ from your actual training session. (The chart below is an example of a training schedule. Use it as a guide to create your schedule, or use the one in your FDD) Training Schedule

Subject Hours of

Classroom Training

Hours of On-the-

Job Training

Location

Welcome! Tour of the Bar, Kitchen, and Stage, [[Franchise Name]] Company Philosophy

1 1 [[City, State]] Corporate Offices

[[Franchise Name]] Operating Manual, Pre-Opening, Personnel, Management and Customer Service

3 [[City, State]] Corporate Offices

Advertising, Marketing, and Promotion, Print Programs, Social Media, Local Restaurant Marketing, Pricing and Coupons


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Subject Hours of

Classroom Training

Hours of On-the-

Job Training

Location

Scheduled Entertainment, Comedy and Music Jams, Stage, Lighting and Sound Mixer, Entertainers, Music Hosts, Bands, Single Performers


Hands-On Training at a [[Franchise Name]] Restaurant


Reporting Requirements, Accounting and Record Keeping, Inventory Management, Sourcing, Approved Vendors, Payroll, P & L Statements


Front/Back of House, Kitchen and Bar, Food Prep, Cleaning and Sanitation, Bartending, Coffee, Servers, Food Presentation, Safety Procedures


Pre-Opening Procedures, Licenses and Permits, Liquor License Application


Real Estate Criteria, Location Site Form, Build Out, Interior Design and Décor, Opening Inventory


Final Review, Q & A 4 [[City, State]] Corporate Offices

Total Hours 32 36

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ADDITIONAL TRAINING Food Safety Training If your [[Franchise Name]] restaurant is located in an area that requires your employees to have a valid food handler certificate or FHC, you will need to make arrangements for that additional training. You can contact your local county health department or community college for class locations and times. The classes generally last only one day.