Avoiding the employment minefield

Many new franchise owners - full of the excitement of owning and running their own business - are quickly brought down to earth by the onerous responsibilities of becoming an employer for the first time.

Most new franchise owners enter the franchising arena from the world of work, where they have been on the receiving end of a regular pay cheque, with all tax and deductions made and holiday entitlement worked out by the corporate human resources team. When faced with having to recruit, train and manage a team of their own staff, they invariably turn to their franchisor for guidance.

So how do franchisors ensure that they provide the best and most up to date advice, while keeping themselves on the right side of the law?

As a franchisor, you're more than likely to be an employer yourself, and you know the pitfalls and headaches that come with the hallowed title. It is tempting to supply your franchise owners with advice. However, if your advice is not totally correct or up to date, you risk leading them toward a dispute that could end at tribunal. There is then the possibility of action from the franchise owner due to possible negligent advice.

Changes in HR legislation are introduced twice a year, while health & safety changes can occur at any time. The good news is that the Department for Business, Innovation and Skills issues notification of the changes via the Business Link website. However, if you take on the responsibility for communicating legislation changes, you will need to issue this information to the entire network. This could mean circulating operations manual amendments at least twice a year. Of course, if you provide such information you must make sure it is 100 per cent accurate.

Increasingly, franchisors are seeking to outsource this element of their support responsibility to specialist third parties, leaving them free to focus on the growth and development of their network. Third party services are available from banks, lawyers, specialist consultancy firms and some private membership bodies.

They will typically provide HR and health & safety manuals and a helpline facility, with access to a legal team, for a monthly or annual fee. Most of these offer HR insurance cover alongside their advisory role, so that your franchise owners are protected from legal costs if, for example, they are faced with a tribunal. The only stipulation to ensure cover is that the scheme member must follow the advice given to the letter, or risk their insurance being void.

For example, did you know that from 2011, employees will have the right to request "time to train"? Employees' requests can be to undertake accredited programmes leading to a qualification, or for unaccredited training to help them develop specific skills relevant to their job, workplace or business. These rights may involve staff spending time away from their duties.

As employers, your franchise owners will be required to consider any requests and respond within a set timeframe. It will be important that they respond appropriately and are able to justify their reasons for declining a request, if they feel this is the appropriate action.

By stepping aside and allowing a third party to take responsibility for providing HR and health & safety guidance and advice to your franchise owners, you can be reassured that they have the information they need to respond to requests such as this, and have access to specialist support and guidance, should they run into difficulties. This leaves them better prepared to grow successful businesses, for the benefit of the entire network.

John Mollart, who runs the Shapeup & Go ladies fitness franchise, decided that joining a professional body that could offer an outsourced HR and health & safety solution would be beneficial for both the company owned operations and his franchise network. They joined the Forum for Private Business (FPB) and have made membership compulsory for their franchise owners under the franchise legal agreement.

"When we spoke to the FPB they explained that they can assist employers in getting to grips with increasingly-complicated employment legislation, as well as providing information to ensure that we are compliant with health & safety regulations. Across our business we employ mainly part-time staff and interact with members of the public so I realised that their support would be useful.

"The information provided through the FPB has been extremely cost effective and invaluable for us at our company owned operation. As a franchisor, knowing that our franchise owners have access to the same level of specialist advice and support means that I have one less thing to worry about. We can concentrate on providing operational support and growing the business, rather than being bogged down with HR and health & safety issues."