HR issues facing Franchisees and Small Business Owners

20th May 2019

Small business operations, be it an independent venture or franchise partnership, are faced with similar HR issues as large companies, but naturally, on a smaller scale.


The difference is that, due to their financial power, big brands can afford to make recruitment errors and have the ability to replace employees somewhat “at a blink of an eye”, whereas small entrepreneurs or hard-working franchisees must measure twice and cut once when it comes to staffing their business.

So, at HR Online, we are about to see how small-sized enterprise owners can deal with HR matters, related to recruitment, retention and compliance more effectively and risk-free.

Expert advice on hiring staff

Not all new franchisees and business start-up owners have HR experience, let alone the resources to employ all the standard hiring practices like corporations and large companies have.

The latter, of course, can resort to their expert HR management teams, while small-time businesspersons often need to do the legwork, related to employing workers, initially themselves.

According to a spokesperson from Join Fantastic Franchise, there are five simple rules to follow when recruiting for franchisees:


  1. Be creative with your job descriptions
    Don’t make the mistake to use corporate language when advertising job positions and describing roles! Confusing, pompous titles or writing an essay of unrealistic expectations, empty of meaningful information, will simply land you with the wrong candidate. Be precise and to the point, as well as emphasize the real job benefits for the potential employee.
  2. Plan out the interview well in advance
    Think carefully about what you’re looking for and conjure up a list of questions to ask prospective applicants. Or in other words, don’t be lazy when onboarding new staff and pick the first example of a job interview questionnaire that you spot online, as it most probably won’t be a good fit for what your franchise business actually needs. Consider finding out information not only about the job seeker’s professional expertise but also try to get a gist on their personality and team-playing skills. The Maverick employee will require a different approach than others.
  3. Think out of the box and look for what’s not obvious
    Traditional job advertising may be a long shot for fresh-established franchisees and new entrepreneurs. So, learn where and how to look for staff by thinking out of the box. Recommendations, referrals and word-of-mouth marketing are all part of clever and less conventional networking that can help you find the right worker, who’s worth keeping. Also, consider “staffing” your business with specialists of various employment status, such as seasonal hands, temps, interns, self-employed tradespersons, and contractors.
  4. Stay ahead of competitors
    Small businesses are far less bureaucratic and rigid than big firms when it comes to running their operations. Tap in on this and bring the focus on flexibility, autonomy, and self-reliance, which, trust us, your workers will find far more attractive than a few extra pennies. Of course, salary is important, but as you cannot compete with big fish on the job market, entice future staff with a different type of tangible benefits, realistic performance-tied bonus schemes and clear-cut potential for growth.
  5. Do your homework and gain advantage
    As we’ve mentioned above, non-formal referrals are often your best bet, when trying to hire someone to help you grow your small business. After all, a person who’s recommending their friend’s CV, for instance, will do so with their own reputation in mind. Still, this doesn’t mean that you should go ahead with this blindly. Do your homework and check thoroughly the candidate’s credentials, professional certificates, their legal right to work and criminal record, if needs be. Sometimes, even the presence of a simple “English as a foreign language certificate” can mean a lot.

How to improve employee retention

Employing the right people is just part of the deal when on a mission to make your franchise or small business a prosperous one.

Read the technology trends that will transform business this year.

Unanticipated staff turnover can hit your pocket in a far more significant way than if this happened to a large company, especially because it may take you longer to find a suitable replacement.

This is why learning about how to retain your good and productive employees is vital for minimising any HR-related costly mistakes. Below, we share some of the most common ways of overcoming employee retention challenges, if you’re a new franchisee or a small start-up owner.

Read our 10 Tips for Hiring and Retaining Millennials.


Family culture

It’s much easier for small companies to welcome and treat their staff like they’re part of a family. You’re the leader but showing your employees respect and seeking their opinion and council will make them feel valued and loved. Bear in mind that measuring employee satisfaction is as close to those customer satisfaction metrics, as it can get. Also, families stick together and do fun and recreational stuff. So, ensure that you socialise now and again with your employees, outside work, and get to know them on a personal level.

Furthermore, it’s not uncommon, in small-sized business environments, for the boss to work (often harder) side by side with their staff. And those are the leaders who usually find that they’ve got their backs covered in dire times and can count on their workers’ loyalty and effort when the business needs it the most.


Training and personal growth

Another way to boost staff retention and improve employee experience is through training and development. They might be brilliant at what they do but you still need to turn them into members of Your team and part of Your business goals.

If you’re an independent company owner, invest the time in developing their customer service skills, which are relevant to your client-base profile.

And if you’re starting out as an aspiring franchisee, utilise every opportunity to benefit from the training programs and development resources, offered by the brand, you’ve partnered with.

How to Confidently Pitch to Senior Leaders to Double the Training Budget?


Time and money

You may not be able to offer your workers the most competitive salary and social benefits package as a small-time entrepreneur. But what you can provide them with is a fair (industry-standard) compensation and better work-life balance.

In contrast, a lot of corporations often manage to get away with somewhat exploitative practices with respect to giving their staff an adequate amount of time off. They might compensate employees fine for working overtime but at the expense of their free time for family and friends.

In addition, consider developing a transparent bonus system, especially if you don’t have the ability and power to introduce regular pay rises as a policy.


Consistency and appreciation

Be consistent in implementing HR-related practices and standards, and show fairness to all.

You can’t be lenient towards one’s breach of discipline at work and be strict with others for breaking established rules. This becomes evident far quicker in tight and close-knit teams than in multi-department business organisations.

Read more about the benefits of praising employees.

Furthermore, don’t delay to exhibit your appreciation for stellar performance and excellence. Set out clear equal achievement and promotion opportunities, as your business grows, in order to encourage everyone to strive towards a team leadership position, for instance, or another type of responsible role, like simple office hygiene to mention one.



Small businesses can usually offer a better scope for flexibility on many levels. From providing their workers with the option to take on different roles on a regular basis and this way, keep them motivated and engaged, to giving them the opportunity to choose their working hours and thus, avoid the rigid and conventional 9 to 5 occupational routine. Not to mention that nowadays, many specialised employment roles do not require commuting and can be performed from the comfort of one’s home.

To sum up, flexibility at work sometimes outweighs monetary incentives. It is not only an attractive benefit for the employee but can also be a key element of the franchisee’s retention boosting strategy.



Regular meet-ups and team discussions on important business matters will undoubtedly make your staff feel involved and their contribution – acknowledged. Their self-esteem, confidence and eagerness to see the business going forward will be also greatly affected in a positive way.

More often than not, large companies boast a vertical organisational structure where each member of staff simply knows their place, rights and responsibilities.

In contrast, small-sized operations are usually more flexible, in terms of decision-making and brain-storming opportunities, where the leadership and staff alike have their say, in order to achieve common business goals and personal career growth and development.  


HR compliance issues

Finally, when it comes to employing people, whether you’re running your own franchise business or small independent company, there are, of course, mandatory steps you need to follow and regulations to comply with. Just tap into the available resources that have been developed to assist all aspiring business owners who intend to employ staff for the first time

As a business person, you will undoubtedly want to grow your businesses profit margins, to do better against KPIs and to increase consumer confidence. For David Rowland, Head of Marketing at Engage EHS, there is one effective way to do this: through more effective health and safety policies.

Below, we summarise some other of the key aspects, related to your status as an employer, which you’ll need to consider. After all, start-up business owners often need to deal with HR issues themselves, as they don’t have the luxury of having a dedicated HR department. On that note, new franchisees are in a more favourable position, as they can seek guidance on employment matters from the franchise parent company’s HR experts.

  • Employers liability insurance – You can’t hire anyone legally without holding Employers liability insurance.
  • Employees’ eligibility to work – It’s your responsibility to make sure that staff has the right to work in the country.
  • Vehicle fleet insurance – You can’t operate a service based-company without it. According to the Bluedrop’s fleet insurance, a reputable provider ensure unrivalled protection and control over risk.
  • Contracts of employment – In the UK, it’s a legal requirement to present new employees with a written statement of particulars of employment no later than 2 months from the day of work commencement, for instance.
  • Code of conduct – If franchisees can resort to the documentation resources of the brand, they’ve partnered with, independent business owners will need to draw up their own documents that stipulate behaviour at work, customer relation practices, etc.
  • Health and safety – Ensure that you introduce all new employees to your business health and safety standards and practices. Keep all incidents recorded and act accordingly within the law, if needs be.
  • Employee rights – From disciplinary procedures to redundancy rights, you need to be well familiar with all legal requirements when it comes to dismissing staff after a certain period of time, for example.
  • Compensation and benefits – You’ll need to strike a balance between current industry rates and your business financial power. As long as your staff doesn’t feel underpaid and can take advantage of other types of perks and benefits, you’ll be in their good books.

In conclusion

All business owners, who’re starting out, will eventually need to deal with various HR issues once their venture expands. And regardless of whether you work with contractors, self-employed tradesmen or you employ people, you’ll need to abide by all legal requirements and regulations, concerning this.

After all, the human element is the most important business resource and the driving force behind any successful enterprise. So, do it right and use HR Online’s advanced tools to aid your company, available for both desktop and mobile. We provide excellent support and pricing. For more details, contact us.