Franchisors Strive For Uniform Employment Practices Throughout Their Systems Without Incurring Liability.

Susan Wells at the Society for Human Resources Management reports that franchisors are taking greater interest in their franchisees' employment practices. She states that franchisors want to use quality employees to differentiate their brands from competitors. However, while a uniform, high-quality workforce can be a boon, mandating or directing HR policies increases franchisors' liability.

One technique to minimize liability is being used by Keller Williams Reality International, whereby the franchisor offers hiring guidelines for several key positions in each office, and reserves the right to review the qualifications of personnel hired by the franchisee for those key positions. Keller Williams says that it does not endorse the candidates, rather its system guarantees that the franchisee upholds minimum standards. It is an approach that Keller Williams calls collaborative, not controlling, that increases the quality of employees in key positions.

Taking a more involved approach, Yum! sets human resources (HR) guidelines, creates hiring strategies, and provides its franchisees with training tools and ongoing support. Yum! applies its approach uniformly for its 1500 franchisees as well as the 20% of the outlets that it controls.

Great Clips is another company trying to create uniformity while controlling liability. Great Clips offers its 950 franchisees training in the form of workshops and videos, as well as HR guidance on job descriptions, compensation, performance review forms, and orientation manuals. At the same time, Great Clips does not "direct" franchisees' employee management. While it offers guidance, Great Clips stops short of mandating HR practices, ultimately leaving those choices to the franchisees. Accordingly, hiring and firing, day to day management and compensation remain the sole purview of the franchisee.