When a franchise has reached the point in their business where it is time to bring on a new staff member to help expand, – Well Done! However, you may be faced with (perhaps for the very first time) many challenges in determining your best option.
You will need to consider whether the new employee will be a part timer, casual, or a full-time staff member and you will also need to have a clear direction on what is required legally and ethically in the employment of staff and how to manage employee payroll. The recent amendments to the Fair Work Act 2017 (Protecting Vulnerable Workers) has impacted the Franchising Industry.
What You Can Do?
- Consider if the franchise business unit supports labour costs that meet the awards for your sector.
- Ask the Franchisor for financial data such as profit-and-loss statements from their existing network that show basic costs and revenue.
- Expect the franchisor to demand your profit-and-loss statement with wages outlined clearly. It is not only the franchisor’s right to have this information, in order to protect themselves from accessorial liability under the Fair Work Act, it has now become their responsibility.
- Expect your franchise agreement to contain clauses requiring that franchisee must comply with all state and federal workplace laws as a condition of the agreement.
Questions to ask:
- Does your franchisor provide a training module in the on-boarding phase that trains and tests franchisee understanding and ensures a passing grade or the franchisor educates franchisees about their external statutory obligations to the Fair Work Act?
- Does your franchisor promote a culture of accountability and compliance that encourages and supports franchisees with problems or concerns about meeting their obligations? It is important that your franchisor provide clear expectations.
- Or your Franchisor might provide a reliable outsourced provider with the appropriate technology and understanding of the legal requirement to handle wages and manage employee payroll.
Knowing your responsibilities as a future employer, understanding the laws that govern your industry and going the extra mile in the due-diligence process is the best investment in your future.
Reference: Franchise Business
As a Franchise Support Service and experienced franchise bookkeepers Accountant Ready Books can provide the knowledge, appropriate technology and understanding of the legal requirements to handle wages and manage employee payroll.
