Management is concerned with providing direction to accomplish the goals and mission of the organization. The small franchisor must perform the same general management functions as any chief executive officer of a large franchise organization. The management process is concerned with how the franchisor plans, organizes, exercises leadership, and controls operations. These four activities are generally called management functions.

Planning

Planning is the primarily responsibility of the owner/manager-franchisor. Planning is concerned with:

Developing the overall vision, mission, goals, and objectives of the franchise

Formulating strategic plans, short range plans, budgets, policies and procedures for the franchise organization

Developing standards for costs, sales forecasts, sales targets, and operating budgets

Developing the franchise line of products, services, and processes which will allow for the continuity of the organization and the profitability of the franchisor and franchisee

The franchisor's path to the future will be literally spelled out in the long range plans or strategic plans (business plans). These decisions will be concerned with such issues such as target markets, product features, and a basic plan for the long term future.

In contrast, short range plans are action plans that govern activities in the marketing, management, and promotion areas for a specific time period--generally week, month, or quarter. A very specific part of the short range plan is the budget -- a document that expresses or illustrates the future plans of the organization in monetary terms. The budgets are generally prepared one year in advance with a breakdown on a monthly basis. In addition, business policies have been established as guides to management practice. These policies may be financial policies, personnel policies, management policies, or many other types of policies. A policy may be simply a statement, for example, no employee of the franchisor headquarter's organization will accept a gift from a franchisee unless it is of nominal value.

Procedures are more specific and generally deal with how something is to be done and the methods which will be followed in business activities or performances. For example, in the printing industry, a practice may require a 25% down payment for any order greater than $100. Once these work methods have been established and standardized, they are generally referred to as standard operating procedures.

The franchisor must take the time to develop the business plan and establish the long range and short range plans for the start-up franchise business. These plans are different than those for the already existing small business which is to be replicated in franchise stores throughout the country. Additionally, budgets should be developed for both the franchisor organization as well as the franchisee business and appropriate business policies and procedures should be developed in the operations manual prepared by the franchisor.

It takes discipline and time to develop the planning necessary to be a success. Planning is first a mental process. It is more difficult to place that process on paper. You must be able to read, understand, and change all plans depending upon the circumstances and activities of the business.