Kit Vinson, CEO of Fran Man, talks about franchise manuals and the legal and regulatory requirements of bringing a franchise to market.
Please excuse any typos in this hasty transcript.
Matt Register: Welcome back to the show, Texas Business Radio. Texasbusinessradio.com is the website; 844-814-8144 is our 24-hour call-in line. That means, get your questions in and get your calls in now. Get them in 3:00 in the morning, I don’t really have an opinion on when you call. We’re going to get the experts in here to get those questions answered.
We’re talking about franchising this week. Franchising is a very, very specific legal term that has a lot of meaning in how you set up a business. If you’re trying to expand your business, expand it rapidly, that is a possible outcome of how you can do it. Now, it’s not for everybody, but we have some experts on here that understand that process and are going to tell you all about it.
I’m your host, Matt Register. Jay Curry, who’s normally over there in the co-host chair had to step out for a little bit. We have George Walden, my business partner and CFA standing in. What do you think, George?
George Walden: I like thought leaders and I like people like Kit Vinson who we’re talking to today. He provides franchise manuals, the go-to guide for how it gets done. I find that a fascinating area to be learning more about.
Matt Register: Yeah, no doubt at all. As George alluded to, Kit Vinson is the founder and CEO of FranMan, which is an organization that builds franchise manuals. Kit, welcome to the show, sir.
Kit Vinson: Guys, I really do appreciate you having me on today. I really do appreciate it.
Matt Register: FranMan, what do you do? Who do you do it to?
Kit Vinson: FranMan, FranMan is short for franchise manuals and so we started off about 13 years ago as Franchise Manuals, LLC. I wanted the name of the company to really tell people what we did so when they saw the business card, they didn’t have to figure out what we did. I said let’s call it what we do. It’s franchise manuals. We produce custom franchise operations manuals for companies that want to franchise. That’s any company really that has more than one location that needs every location singing off the same sheet of music.
Matt Register: Now for franchises in particular, there’s a process to this that we were talking during the break. If you have a proven model that makes sense to have multiple locations of and you want-
Kit Vinson: Budro’s Burgers, that’s what I like to use as an example.
Matt Register: Budro’s Burgers. The process is, the legal process is you got to have a franchise disclosure document, get a franchise agreement, and you should have an operations manual. Now this isn’t only for franchises though. This is for anybody that is looking to be able to replicate a set of procedures and processes.
Kit Vinson: Yeah. That’s what we talked about earlier. An operating manual is in the world of franchising, it’s what allows you to duplicate a favorable customer experience from location to location, but that’s valuable not just to franchisors. If I own a business that has multiple locations, I want to make sure that if my customers come to me from Butte, Montana, from Dallas, Texas or from wherever that the customer when they come in, they know what to expect and they’re going to receive that same experience. They’re going to walk away with that same feeling ’cause that feeling is what determines brand in their mind. If they walk away with that same feeling, then we’ve done a great job. We’ve created a good manual, a good set of instructions that if they’re followed, if the franchisees or if the location managers are compliant, then the customer will receive that same customer experience. Does that make sense?
Matt Register: It makes a lot of sense. The ultimate example of this is probably McDonald’s. I’ve eaten at a McDonald’s in Incirlik, Turkey. I’ve eaten at one right down the street and it all tastes the same.
Kit Vinson: Right, exactly.
Matt Register: That didn’t happen by accident.
Kit Vinson: That’s not by accident at all. I have never seen the McDonald’s operating manuals. I would assume that there’s just volumes and volumes. I’m sure they’re all electronic now, but they’re the masters I think.
Matt Register: Because I would imagine your clients, they don’t start with one. You’re having to build serial #1 of an operations manual.
Kit Vinson: Sure.
Matt Register: How do you take the contents of a guy’s brain because he has created a company and it’s already residing right between his ears?
Kit Vinson: Yeah.
Matt Register: You have to now pull that out and put it in … Where do you even start?
Kit Vinson: Sure. It’s a tough question. Typically, you’re absolutely right, a lot of our customers are startup franchisors and they have developed this from the ground up. They are the business. We got to figure out how to extract all that from that one person sometimes. Sometimes it’s 10 people, but a lot of times, it’s one person. I need to find out what did you do to create this success because you have a line out the door all the time. I need to figure out what you’re doing.
What we do is we produce custom franchise operations manuals. They’re not all boiler plate, cookie cutters. The first thing we do is … I know you’re all in school in English class and when you’re writing your paper, the teacher said, “Write your outline.” That’s where we start. I need to create with them, I create a custom outline. Let’s say Chapter 1.
Now I bring with me a generic outline for a franchise operations manual. I don’t want to miss anything and so, I bring that with me and we’ll start there and we’ll start with a blank sheet of paper and we’ll start creating that with them. I’m getting their buy-in on every chapter, on every section, and every subsection. They’re going through, yeah, we need to talk about that. I’m asking them a lot of 65,000-foot questions about their business. I’m asking a lot of high level questions and those are the big buckets. Those are your chapters. Then, we’ll fill in with sections and then subsections. From that, once they sign off on that, then I turn on an audio, digital voice recorder, and I put that on the table and I said if I can get someone to talk to a topic, now I can take that and I can transcribe it, then I can convert that into manual content.
I tell our clients, our prospective clients that call me up, “Have you ever done a manual on indoor skydiving? We wrote one once, indoor skydiving?” I say, “You know what, we learned a long time ago that I don’t have to be the expert in any one industry in order to write a manual, but what I do have to be is in front of that expert.” If I can be in front of that expert, I can ask the right questions to gather, extract the information that we need to write that manual.
Matt Register: One of the hardest things, in fact, George, we were just having this conversation a couple of days ago with a client of ours, it’s very, very hard for that entrepreneur to make the switch that instead of taking every ounce of capital that comes in from the operations of my business and pouring that right back into expanding my business, you need to take some of that effort and energy and work on the sophistication of it that’s going to make everything else run smoothly. Talk to me a little bit about some of the value that those operations manuals can bring to an operation.
Kit Vinson: An operations manual, it serves multiple functions. It’s not just the book that has instructions on how to roll the burrito. It is that, but let me back up. A franchise, you’re talking specifically about a franchise operations manual. A franchise operations manual is more than just about how to roll the burrito. It’s that and it’s a lot more. We’ve got to go way back ’cause now, we’re trying to teach a new franchisee not just how to roll the burrito, but we got to go way back. We got to say here’s how to pick out a location. This the type of real estate that we’re looking for and here’s how to find that and-
Matt Register: Here’s how to hire a manager and here’s the kind of person that is.
Kit Vinson: Yeah, but way before that even, it’s and here’s the equipment. Here’s where you’re going to get the equipment, here are the specs on that. Then we talk about you need to have staff. You’re going to have to have a minimum of X amount of staff at any given time and of those five, two of them have to be managers. One of them has to be, whatever the business is, and then we have to tell them here are the responsibilities of those positions. When you go hire somebody, this is what you’re looking for. Here’s where we’ve had our success.
Because when I’m a franchisee, I’m going to be giving, that’s a lot of money, I’m going to be giving $30,000 just as the initial fee, 30, 40, $50,000. That doesn’t include the quarter of a million it’s going to take to build the place. I’m investing a lot of money. What I’m investing in is a concept, is this collection of not just ideas, but facts of what is it, how did you get successful. I need to get that in-
Matt Register: Best practices and lessons learned and the product of a whole lot of work.
Kit Vinson: Absolutely. Right, right. We need to get all that in there. It’s a training document. It’s a sales document. It’s going to help them … In the world of franchising, I don’t like to use the world sales. A good friend of mine, Bob Gappa, who owns this consulting company says, “It is not sales. You can’t sell a driver’s license. You can’t sell a medical license. You’re granting a franchise,” but you can sell the idea of being a franchisee. When we’re selling the idea of being a franchisee, we need a document that shows people that we do have all of our systems in place, we do have all our ducks in a row. We have an organization that you’re investing in that idea, that intellectual property.
Matt Register: Absolutely fascinating. We’re definitely going to have to have you back on because we hadn’t even touched a lot of the questions I have about this. FranMan, franchise manuals company, franman.net is the website. Kit Vinson is the CEO. Thank you very much for joining us, Kit.
Kit Vinson: Thank you very much. I really enjoyed my time today.
Matt Register: This has been absolutely fascinating and there’s a whole lot more about franchises to learn. Franman.net is the website. Right here at texasbusinessradio.com we’re going to have it linked. We do have to go pay some of our own bills right now, but we will be back with a whole lot more franchising here on Texas Business Radio. You don’t really even have any time to go anywhere. We’ll be back right after this.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.