Developing a Franchise System

by Franchize Consultants

last updated 23/09/2021


Employment Compliance

by Franchize Consultants

last updated 23/09/2021


Franchize Consultants suggest 4 key ways to help franchisees manage employment risks

Recent events in Australia and New Zealand point to the need for franchisors to have a specific and structured approach to employment compliance by their franchisees. The possibility of legal risks and obligations in the future means the time to act is now.

Of course, none of this is to lessen the responsibility of franchisees (who operate their own companies) to ensure employment compliance involving their own staff. But it’s important to make sure that franchisors, as business and brand owners, have the structure, oversight and power needed to help ensure employment compliance within their franchise system.

Franchize Consultants has identified more than 30 possible options for action within four key areas for ensuring employment compliance:

1. Strong systems and tools. Franchisors need to have these in place to be able to a) set clear expectations of franchisees, and b) actively monitor and manage franchisee employment compliance on an ongoing basis. This involves options within the Franchise Agreement, Franchisee Manuals, training systems and logs, advice lines, compliance tools, payroll systems and many other considerations.

2. Good education, training and culture. This is about setting and living the expectations in terms of employment and people within the franchise system. It starts with a demonstrated leadership commitment to great people management, but extends to many other areas, including dedicated franchisee induction and training, required employment communications, and regular employment law and best practice obligations.

3. Monitoring compliance. This is a key area for understanding purported and achieved levels of employment compliance. There are important considerations involving various audits and survey mechanisms, financial benchmarks and a possible CEO/other ‘whistle-blower’ hotline, along with many other options.

4. Taking action. It is one thing to set the scene with clear franchisee standards and expectations; it’s another to act when actions fall short. When this happens, it is critical that franchisors are decisive in ensuring all franchisees uphold important employment law and best practice obligations. This often means working with franchisees to better understand and implement needed practices but may, in extreme situations, involve the termination of franchise agreements.

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Dr Callum Floyd

Protecting people and businesses

Remember that poor employment compliance (even if unintentional) can have a dramatic impact on an employee and a knock-on impact for a brand – including all the innocent franchisees, the franchisor and others such as suppliers, lenders etc.  

Dr Callum Floyd, Managing Director of Franchize Consultants, says, ‘Progressive franchisors will not only monitor actual employment compliance; they will periodically review their employment compliance structure to ensure that it’s able to protect all these stakeholders.

‘At Franchize Consultants, we can bring together specialists from all sorts of fields to help franchises develop and implement efficient and workable structures for their team. Contact us to find out how we can help keep your brand on top of the risks posed by employment issues.’   

See this advertorial on page 54 of Franchise New Zealand magazine Year 30 Issue 3

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