Franchise: it’s a word that has unfortunately become synonymous with media scrutiny for bad employee management and treatment. Often it is the isolated stories that make headlines.
Australia’s substantial and successful franchise economy is supported by one of the most comprehensive and effective franchising regulatory systems in the world. In our experience, most franchise businesses by far uphold the highest standards.
Contrary to the highly publicised stories of underpayments and poor employee management by franchisees and franchisors, there are untold stories of families who have built generational franchise businesses; of entrepreneurs who have bought a struggling franchise business and turned it into one of the network’s best performers. It is the women who have found the flexibility to balance families and business ownership; the employees of a franchise business who have gone on to become profitable franchisees in their own right; the individuals who have carved out successful careers as franchisees within more than one franchised brand. These stories, and so many more, exemplify the power of franchising to positively transform lives.
Franchising is the engine room of the Australian economy, with almost 80,000 franchise units trading across the nation. The $146 billion sector is responsible for directly employing nearly half a million Australians.
Beyond the obvious responsibilities of sales and financials, as a franchise owner you are ultimately responsible for managing employees. Do you have sufficient business experience to take on this responsibility, or access to advice and resources that will support you? It’s essential to understand the complexities and fundamentals of becoming an employer and franchise owner if you’re looking to be successful.
So, you need to be aware of workplace laws and your obligations as an employer under the Fair Work Act. Publicised examples show what can happen if other imperatives or priorities creep into the franchise relationship. Providing each and every prospective franchise with the best chance of running a successful business, while acknowledging the impact of external market forces, should be the goal of every franchisor.
There are three simple hacks to help you stay on the right side of the law and protect your franchise.
Calculate and forecast your labour costs
If you are looking to buy a franchise, your due diligence and financial planning should include a calculation of your potential labour costs. Work out what you think your staffing roster will look like each week. If you can, base this off an existing franchisee in a similar market.
Use this information to calculate how much you will need to pay each employee. To do this, make sure you seek expert advice to ensure your forecasts are correct and which award or agreement will apply to your business, including the various classifications that will apply to individual employees.
Keep employee records
All employers are required to keep employee records for a minimum of seven years. Good record keeping can also prevent and resolve issues with your employees and help to keep track of your labour costs.
The maximum penalties for failing to keep employee records or issue payslips have doubled to $63,000 for a company and $12,600 for an individual. The maximum penalty for knowingly making or falsifying employee records has tripled to $630,000 per breach, if the breach is serious and systematic.
Check your obligations and stay informed
As your franchise kicks off and you start employing new workers or adding to the team, you must remain informed about your ongoing obligations to your employees. Ask for expert advice so they can notify you if there are changes in the terms or rates of pay in various awards. It’s also important to become familiar with the National Employment Standards, to ensure that you are meeting the minimum standards and have measures in place to keep updated on regular changes. You can talk to your franchisor, check online resources, or ask an expert workplace adviser.
Running a franchise comes with challenges, but becoming an employer means there are many more complexities to consider. You need to manage the relationship with staff and workplace health and safety while simultaneously staying focused on growing your franchise.
This is where regular assistance from experts will give your franchise business far more efficiency and build in extra safeguards. Best practice involves knowing your rights and obligations and knowing who to contact if you need assistance.
Employsure empowers over 24,000 small to medium-sized businesses to succeed with confidence – it provides customised expert advice and documentation with insurance and legal representation across employment relations and health and safety, packaged in one bundle for small and medium franchises and businesses. The cost-effective service allows businesses to budget for complete protection and achieve peace of mind when it comes to employee management and workplace safety.
Alivia Hardy holds a Bachelor of Commerce majoring in Human Resource Management from the University of Wollongong. She has experience across recruitment, training and development, employee management and employee relations. In her role at Employsure, Alivia is a trusted Adviser to employers, business owners, and franchisees for all employee management and workplace relations matters.