It is important franchisees comply with all laws. Compliance with employment law is particularly critical. Employment law is especially important because it involves people, one of the organisation’s most important assets – if not the most important asset. Employment law compliance also speaks to basic human rights, and ensuring people receive their legal entitlements (as a baseline).
In franchising, the franchisor needs to consider the structure for ensuring employment compliance within their franchise system. There may even be legal obligations to do so. There are many approaches, and recent events in Australia and New Zealand, point to the need for franchisors to regularly review their approach.
None of this, of course, is to lessen the responsibility of franchisees (who operate their own companies) to ensure employment compliance involving their own staff. But rather to make sure franchisors, as business and brand owners, have the structure, oversight and power needed to help ensure employment compliance – even beyond their own direct-owned company operations – to those also operated by franchisees under the same common brand.
There are a huge range of possible options to consider under what we refer to as five key important areas. The high-level areas include:
- Systems, tools and expectation setting
- Education, training and culture
- Managing compliance
- Performance monitoring, and
- Taking action
Poor employment compliance (even if unintentional) can have a dramatic impact on an employee and a knock- on impact for a brand, all franchisees, the franchisor, and other stakeholders (e.g., suppliers, lenders etc).
Progressive franchisors will not only monitor employment compliance, they will periodically review their employment compliance structure. Most recently, such reviews have resulted in more franchisors taking an active role in employment compliance.
Relevant questions:
- How confident are your directors in knowing your levels of employment compliance?
- What is your franchise system approach to ensuring employment compliance?
- What, if any, changes are needed to ensure better employment compliance (and/or provide greater confidence) into the future?
About the Franchising Best Practice 500 Series
This is part of a series of franchising best practices. Franchize Consultants is sharing and publishing these best practices weekly for the betterment of franchising. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses.
We have assembled the first 40 best practices into The Best Practice Handbook, which is available for purchase.
