by | May 27, 2013

Important issues for franchise owners to consider

Running a franchise business is no small task.


I have found that three of the most important issues to consider are…

1. Workforce Planning

When running a franchise business, franchise owners must take into account workforce planning. Workforce planning is about forecasting your current and future staffing needs in relation to your strategic business objectives, then addressing matters relating to the supply of labour; for example are there candidates with the skills you require available? The next step is to get the right balance between labour demand and supply, so that you have the right number of employees, with the right skills at the right time.

Labour demand forecasting is crucial, as businesses don’t want a surplus of employees who are not being fully and effectively deployed, nor do they want gaps in their employee pool which results in reduced productivity, performance and profitability.

Once a franchise business has forecast what it’s future requirements are likely to be, it is then important to determine what number of employees will be needed, with what skills and when. Labour supply may come from within the organisation or outside.
The first step therefore, is to do an analysis of the skills currently within the business. If skills are not available internally, then they may need to be sought externally. Once looking externally factors such as availability of skills within the job market will be a major consideration.

When balancing your supply and demand, if you are short of employees to achieve the business objectives, effective recruitment strategies will need to be devised. Considerations will then relate to job design, career development, flexible work options, remuneration and reward programmes. However, if you have too many employees, effective strategies will need to be created to manage retirements, redundancies and if appropriate, dismissals.

2. Employment Agreements

Most importantly, you need to ensure you have effective employment agreements in place.  This contract outlines the relationship between employers and employees.  First of all, this contract is mandatory and a business without these agreements in place is at risk of getting a $10,000 fine per employee or $20,000 for the company, from the Employment Authority.

Employment agreements are easy to put in place when you are recruiting new staff.  There are almost never any queries about the clauses or content at this early stage of the relationship.  However, the same cannot be said for trying to get these in place months or years later.  While rolling out agreements to your existing staff is completely doable, it can be a time consuming and frustrating process for everyone involved.  It will invariably be disruptive, and there may be some ill-feeling stirred up as a result.  At the very least it will bring out a pedantic side of your staff you may not have known existed.  For example, we had one client forced to change the wording of “Queens Birthday Weekend” to “The birthday of the reigning sovereign”.  You can imagine the “thorough” nature of the rest of this person’s feedback!

While you have to factor the necessary time for this retro-fitting process, most importantly you need to be patient and retain your sense of humour until agreement in place you will generally never hear another peep about them.

Another thing to consider is that there have been a number of changes to employment legislation over the last few years and you want to make sure you do not have any vulnerabilities exposed as a result of these.  Be proactive on this one, make sure you are covered otherwise you may open yourself up to problems.

Furthermore, it is always worth having a second pair of eyes to look over your agreements, even if you have had them drawn up by a reputable organisation.

3. Work on your business

Be sure to give yourself sufficient time to work strategically ON your franchise business – not in it; visioning, analysing market trends and developing strategies so as to ensure your firm maintains the desired trajectory.  No doubt you are sitting reading this thinking – “but where do I get the time to do this?”  This really is the curse of a successful and growing franchise business.  Effective staff development and delegation strategies can help you build this time into your week so you can commit to this important task.

Furthermore, make sure you give yourself the time and space to get away from the daily hubbub of the office for this process.  If you can’t shut your office door and mute your phone, you might consider the strategy some of our clients, who bank with the BNZ, whereby they book a space at their local Partners branch, for half a day per week for this purpose.

Remember that every franchise business, like every ship, must have a captain with their eyes of the horizon, providing strong direction.  At the end of the day we all want to avoid Rena disasters!  It is up to you to provide the vision for your franchise business and effectively communicate that to your staff to ensure the ship safely makes it to port.

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