Business Franchise Australia


Approaches to managing employment

This article appears in the September/October 2013 issue of Business Franchise Australia & New Zealand


There is little support for franchisees in managing the employment side of the business, according to new research from Griffith University.

The research, completed by Dr Ashlea Kellner for her doctoral degree, focused on coffee franchise systems and found that the level of support franchisees are provided in human resource management (HRM) can be lacking.

Franchisee HRM needs

Franchisees often come from non-managerial backgrounds with the hope of being their own boss.

Some have previously worked in fields as diverse as truck driving or accounting. When it comes to recruitment, selection, training, performance management or handling disputes and dismissals, they can be very inexperienced and unprepared.

The franchisor doesn’t always give franchisees adequate training to equip them to manage these employment processes in their stores.

Type of HRM support provided by franchisors

The study found that more general support is typically provided to franchisees to provide a base level of understanding of how to employ and manage staff.

The operations manual usually includes basic policies, procedures and templates for employment contracts and letters of dismissal.

Franchisees in the study were also introduced to key employment concepts during their induction period, although a common complaint was that the intensive nature of the induction often meant that much of this new information was forgotten.

“We cover so much content in a week at head office, I can’t remember anything they told us about managing staff!” one franchisee said.

Franchisee misconceptions regarding HRM support

Many franchisees expressed that they were not too concerned about their lack of people management skills upon entering franchising since they were sure they would be provided ongoing assistance by the franchisor.

Unfortunately, this is not always the case, as the majority of franchisors do not have the required expertise to support franchisees in this way.

The Franchising Australia 2012 research, conducted by Griffith University’s Asia- Pacific Centre for Franchising Excellence confirms these findings.

The Franchising Australia 2012 report shows slightly less than one third of franchisors employ human resource or industrial relations specialists at their corporate office, and those that do tend to be larger systems with more than 50 units.

Prospective franchisees, particularly those considering smaller systems, should be aware that HRM support may not be available. This means that particularly difficult and complex tasks, such as creating employment contracts or handling industrial  relations issues, will require a lot of time and potentially costly external expertise.

Adopt, adapt, borrow or create your HRM approach

Establishing the basic HRM policies and procedures is a time consuming task, although it seems that in this regard, franchisees have four options.

The research indicated when it comes to HRM policies and procedures, franchisees essentially have four options open to them:

Adopt: Where the franchisor has provided some guidelines on an HRM practice, such as recruitment for example, the  franchisee may choose to adopt the franchisor’s recommended HRM practices as they stand.

Adapt: Where the franchisor is flexible with the interpretation of their policies and procedures (which appears to be the case in the franchises studied), the franchisee may choose to adapt them to suit their preferences.

Borrow: Alternately, the franchisee may prefer to borrow HRM practices from another organisation and alter these to suit their own preferences.

Create: Finally, some more innovative franchisees choose to create their own individual approach, writing their own policies and procedures from scratch. HRM is seen as primarily the franchisee’s responsibility, therefore there is typically a lot of ‘wiggle room’ around the creation and adaptation of policies.

The research found franchisees tended to adopt the franchisor’s standardised paperwork and templates such as offer letters and policies, but exhibited a higher degree of adaptation in more practical aspects of management according to their  previous experience or preferred management style.

Franchisees often cobbled together an approach using all four methods and this is demonstrated in the following example taken from a franchisee in the study:

The recruitment template provided by the franchisor was adopted to advertise the vacancy, and then the franchisor’s reference check template was adapted to suit the franchisee’s preferences. The interview approach was borrowed from the airline
industry, where applicants were asked to “bring your talent and entertain us”. Finally, the franchisees employed the new staff member on the enterprise agreement that they had independently created without involvement or advice from the franchisor.

Preparing to manage your own employees

For new or prospective franchisees, there are a number of key points that should be considered in regard to HRM.

It is important to remember that the first few months of running a franchise will be intense, overwhelming and demanding and it may be the best approach to adopt the franchisor’s HRM policies and procedures initially.

As the franchisee is able to take time and step back to consider the management of the unit, this may be the time to begin adapting and changing the approach to activities like employee selection or training techniques. Don’t be afraid to borrow  techniques and ideas from other franchisees or external organisations.

Network and connect with other franchisees within and external to your system and ask them what works. Ask them about how they manage the activities that you may find difficult – such as managing a poorly performing staff member. Consider asking for a copy of their paperwork, be it a performance review template of outline for an official warning relating to performance.

Where franchisor support in HRM is limited, external professional advice is costly so these networks of small business owners and managers can be invaluable. As a small business owner and manager, keep in mind that managing the human resources of your unit is a demanding but critical aspect of the role.

In comparison to the operational aspects of your business, the franchisor’s involvement in HRM is likely to be far more limited.

Many new franchisees report that this lack of support is unexpected and disappointing, so the best preparation for potential franchisees is to be aware and informed.

Talk to other franchisees, borrow ideas from organisations you admire, and be aware that your approach to managing staff is an ongoing but critical element in the success of your franchise business.

Dr Ashlea Kellner is a research fellow employed by the Centre for Work, Organisation and Wellbeing at Griffith University. Her PhD research was conducted with support from the University’s Asia-Pacific Centre for Franchising Excellence.

Griffith University’s Asia-Pacific Centre for Franchising Excellence aims to drive franchise sector best practice through practical, independent research and education.

To learn more visit the Centre’s website: