A Guide To Hiring Franchise Staff

26/01/2018 09:45 | Become A Franchisee

Hiring franchise staff

Starting a franchise is an exciting time. And the excitement levels go up a notch when you begin to recruit new employees for your business. The staff that you employ will play a big part in your franchise development and may mean the difference between your success and failure. So, you want to make sure you get the right employees on board to help the road to profitability run a lot more smoothly.

With staff come a range of responsibilities, so heres a quick guide to hiring franchise employees.

1. Employers liability insurance

First things first, you need to make sure that you protect yourself and your new business. As soon as you become an employer, youll need to buy employers' liability insurance. This cover is in place to help you pay compensation if any of your employees become ill or injured.

Not only is this a franchise cost that makes sense from a practical perspective, its also a legal requirement. The policy must cover you for up to £5 million and be purchased from an authorised insurer.

If youre found to be operating your franchise without adequate employers liability insurance in place, you can be fined up to £2,500 for every day that youre not properly insured.

Finally, once youve bought your insurance youre required to display your policy certificate in place that your staff can view it. This doesnt have to be a physical location. You can display it electronically as long as your employees can access it easily.

2. Right to work documents

If you find the perfect prospective employee for your franchise, youll need to check that they have the right to work in the UK before you hire them.

This sounds daunting, but you just need to follow an easy process to verify that your new employee has all the necessary documentation.


Ask to see your new employees original documents, which include:


  • a passport for UK or EEA (European Economic Area)/Swiss citizens;
  • an immigration document; or
  • a certificate of permanent residence

A full list of suitable documents can be found on the GOV.UK website here.


When reviewing the documents your main aim is to confirm that they are real. Look out for the likeness between your prospective employee and the document photographs. Also, check expiry dates and restrictions on work. If the candidates name has changed due to marriage or divorce, for example, youll need to request proof of these documents too. Make certain that you perform these checks in the presence of the applicant.


Take a copy of the documents for your files and make sure that you keep them for a minimum of two years after the employee has left your franchise. Also, make a note of the date that the checks were carried out.

If the checks are performed incorrectly, or failed to be completed at all, you could be liable to a civil penalty of up to £20,000 per employee that isnt permitted to work in the UK. Simply follow the process and retain copies of the documentation and you should avoid the unnecessary franchise cost of a fine.

3. National Minimum Wage

When starting a franchise that requires employees to operate the business, you and the franchisor must decide how much you will pay them. It doesnt matter if youre a franchisee of the biggest of global brands, or a smaller up and coming franchise, the same rules apply.

The National Minimum Wage (NMW) is the least amount you must pay most workers according to the law. For workers over the age of 25, they are entitled to the higher rate of pay known as the National Living Wage (NLW). If you decide to recruit apprentices as part of franchise development programme, then theyre entitled to an apprentice rate if theyre under 19 years old, or over 19 and in the first year of their apprenticeship.

You must take your employees pay seriously. Not only is it against the law not to pay someone the rate theyre entitled to, but its a franchise cost thats worth investing in. If your staff are sufficiently paid for their work, then they are more likely to remain loyal to your franchise. This consistency is important for both you and your customers.


4. Contracts

The contract of employment that your staff will enter into is just as important as the franchise agreement that you sign when starting a franchise. The document must include certain information, including the names of the employer and employee, employment commencement date, wages, hours of work, the length of notice needed to terminate employment, to name a few.

Its recommended that your employees are presented with contracts before their employment starts. Having everything confirmed in writing before employment begins helps to make everything clear and transparent right from day one.

If this isnt possible, then youll be given a 2-month grace period to get the contract to your member of staff. Make sure you keep a reminder of this date though as youd be in breach of employment law if you forget.

5. Employee rights

Any employee that you recruit into your franchise business will have certain legal rights. Right from day one your staff members will have the right to not be discriminated against on the grounds of sex, race, disability, sexual orientation, age or religious belief.

The rights of your employees particularly come into play if they believe that they have been unfairly dismissed. Once your staff have been working in your franchise for more than 12 months continuously, they have the right not be unfairly dismissed. Whatever the reason for dismissing the employee, you need to follow a documented disciplinary procedure. Its also very important that you can prove that you want to fire the employee for a genuine reason, such as poor performance or misconduct, and not because of discrimination.

There is a lot to consider when hiring staff for your franchise, but its only proportional to the amount of benefit that employing the right people brings to your business.

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