Employment in Franchises



Friend or foe, employment advice for the franchisee .

The last few years has seen a huge growth in franchise operations. Many like Baker’s Delight, Green Acres and Hell’s Pizza. Some are simply self-employed individuals buying a job, but increasingly they become small and not so small businesses. The attraction may be the business model, the opportunity to cash in on the success of a proven brand with business plans, marketing strategies and support available to assist in replicating similar success for the franchisee.

The franchise is a proven way of owning a business. For many people it can be the first foray into ownership and being solely responsible for staff management. In the rush to open the doors, market the business and make money, the staff structures, procedures and processes can be forgotten. The pitfalls are huge and often not appreciated until it is too late.

Traditionally, with the exception perhaps of basic employment law and hiring practices, the resources provided by the master franchisor have steered clear of human resources, the day to day employment issues are left up to the individual franchisee. This understandable “don’t get involved” stance may be taken by franchisors to mitigate the extent of risk posed by the personal grievance.

However, with the increasing numbers of franchise operations, spin-offs and start-ups, many franchisors are beginning to understand that their real competitive advantage lies in the franchisee workforce. Add to this the increased competition for buyers; franchisors need to look to the depth of support they offer to franchisees.

To help maintain and promote an employment brand, companies like Hell’s Pizza have formalised recruitment, staffing, training and ongoing support programmes for franchisees with standarised employment advertising, recruiting, application and induction materials. Consistent practices for recruitment, induction, training and development of staff, increase productivity, staff retention, public image and in turn, profitability. Best employment practices help build a stronger brand.

Franchise operations should provide support and training to franchisees on employment law, culture and management development. There should be tools and resources for franchisees to use in their operations such as standardised job descriptions, remuneration planning, a policy manual, performance review forms, orientation manuals and checklists.

Human resource subjects and training can be included as part of company conferences providing an opportunity for the franchisee to ask questions directly relating to their business. Basic training could also be included in existing induction programmes for new franchisees. Outsourcing human resource support for both documentation and procedure can relieve the franchisor of both the responsibility and the time taken to deal with the issues.

In any business employing the right people and managing them effectively within the constraints of legislation, will automatically minimise any legal issues. Franchisees should be provided with training and support in the correct procedures to use.

However the franchisor is not the employer and should be careful not to direct the employment practices of their franchisees too closely. They should leave the day to day management such as contract negotiations, pay discussions, performance appraisals and termination meetings up to the individual businesses.

Too much involvement places the franchisor at risk of being seen as responsible should a personal grievance ensue.

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