Australian industrial relations and workplace laws are very complex. They are not superficial, and random checks and certifying that everything is fine doesn’t cut it. If you want to check the functioning of your car, how do you go about it? Do you stop at checking fuel and the battery? Not really; you call a mechanic or take your vehicle to the garage for a complete check-up. The same is true of industrial relations and workplace laws.

If you are just starting with compliance employment, there is no need to take big leaps; simply begin in a small way. Prepare a plan, review it, execute the plan, check for results and repeat the process. Let us look at the steps you need to take to remain compliant.

#1 Review Your Network

The first step is to conduct an online survey of your business network. The framework and scope of the survey should enable you to get a good overall idea of the systems and processes that are in place for running the business and determine whether there are any existing knowledge gaps.

#2 Create A Plan Based On The Survey

The survey results are useful to provide a quick snapshot of the online survey. It enables you to do a risk assessment, highlighting the areas of high risk and the plan to cover those risks. If you focus on these areas while managing business risk, the impact on the network will be significant. These surveys invariably spot common risks such as insufficient time and attendance record systems, inferior reporting methods, as well as lack of education and understanding of the requirements at the workplace.

#3 Mitigate The Common Risks

A sound network system, early identification of risks, attention to triggers and immediate corrective action all play a crucial role to remain compliant with Australian IR laws. David Price, who is the General Manager at ERS recommends that franchise businesses follow these four steps to achieve compliance on the three common issues mentioned above:

• Insufficient Time & Attendance Systems – Under the Australian Industrial relations and workplace laws, there are certain recordkeeping obligations under the Vulnerable Workers legislation. You are required to keep an updated record of specific types of information under these obligations and check it to ensure compliance. You are in a tight spot if you fall back in maintaining these records as per the Vulnerable Worker legislation,. As the “onus of proof” is reverse in nature, franchisors are obligated to maintain records.

They face the risk of being exposed, if they do not maintain records as per the legislation guidelines. It benefits franchisors to set in place a Learning Management System (LMS) to produce education and information to the network. The LMS consists of modules; the completion of which can be tracked at regular intervals. Over time, this can also become the best practice solution for mandating and implementing.

• Education – The problems faced by franchises are often related to their ignorance, lack of education or poor understanding. The solution lies in designing a result-oriented system of education that is consistent, easily understood and measurable. The franchises can be educated by providing them regular training and IR updates at both the state and national meetings. This helps bring them up to speed with all the compliance requirements and keeps your franchise business on track.
• LMS Modules – LMS modules are useful in the early identification of reporting issues and franchisors can resolve them using the appropriate mechanism. An employee helpline is an effective method to encourage franchisees to report the problems. The resulting business data can be analysed to the advantage of a franchise. For example, the franchise may zero-in on data relating to labour to sales percentage that is beyond the normal standards and needs to be rectified.

#4 Check

An audit check is an essential step for the effective functioning of any system of an organization. Is there an answer to a question like, “How many outlets or franchisees in the network should be audited?” Price says they recommend that a minimum of 5 percent of the network should be audited.

But there are certain triggers that may indicate the need for less or more network auditing. Some of these triggers include – when a franchisee ignores the need for educational activities and seems disengaged from them, or when they are lax in looking at business information collected from the helpline or data garnered from data analytics. The triggers indicate the need for vigilance and corrective action.

The Key to Compliance Success Lies in Repetition

Australian IR laws are complex in nature and are constantly in evolve-mode. It means that the systems put in place by the franchisors need continues monitoring the franchisees must remain updated and incorporate the changes in their business workings. This is the way to stay compliant and mitigate compliance risks in Australia.

Each year, the ACCC proactively conducts a code compliance program. This requires certain franchisors to provide document copies relating to the requirements under the Franchising Code as well as other legislation they administer, including the law related to Business-to-Business unfair contract terms.

The Franchising Code is specifically designed to minimise the requirement for legal & regulatory intervention. It necessitates that important disclosures be made to allow informed choices, establishes the expectations of fairness and transparency, and facilitates dispute resolution via mediation.

Educating all the franchisees within the network and ensuring they are in line with all the compliance requirements is key to maintaining this code of conduct. This is why the 4 step process outlined in this article becomes and important aspect of owning and operating a franchise.

If you want to know more, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.

Thanks for reading,
The Franchise Institute Team
1300 855 435

The post HOW FRANCHISING BUSINESSES CAN STAY COMPLIANT appeared first on Franchise Insitute.

This process of growth and expansion needs to be backed by a robust compliance system, without which it will not be possible to achieve the desired business targets. A franchise attorney is an expert who can educate you about your compliance responsibilities. Here are a few questions you need to ask yourself if you want to become a franchisee.

Know The Franchise Agreement In Detail

• Are you willing to make sure that your business practices conform with the Franchising Code of Conduct and the Australian Consumer Law?
• Is it possible for me to comply with every clause of the franchise agreement?
• Have I gone through the franchise agreement with an eye on every detail and without ignoring the fine print? You can seek the assistance of a franchise attorney if necessary).
• Have I thoroughly scrutinised the disclosure document? You need to read the agreement and other related documents carefully, even if you have hired the services of a franchise attorney.
• Have I received an operations manual from the franchisor and checked it? The manual details the respective responsibilities of the franchisor and franchisee and how they cooperate to fulfill those responsibilities. By checking the manual, you are accepting the system as legitimate and tested as well as agreeing to abide by the rules and regulations. A franchise solicitor can help assess your ability to work according to the manual.

You need to remember the primacy of the operations manual. In case, the franchisor denies you the right to review the operations manual before signing the agreement, request to view it at the franchise headquarters.

Reading the disclosure document is critical as it enables you to make sure that a particular system complies with the Code of Conduct. If you find that you cannot grapple with these issues yourself, do not hesitate to ask a franchise attorney to help you.

How To Check Whether A Franchise Network Is Code Compliant

Here is a check-list that will help you determine whether the franchise system is compliant:

• Provides full disclosure of the franchise system’s important events including sales data, a list of current franchisees as well of those that have terminated their agreement for various reasons
• Can furnish the last two financial statements or an audit of the previous six months.
• Make available a full disclosure of legal issues encountered by the franchise in the past
• Able to tell you whether the Franchisor’s Code of Conduct applies at all times
• Provides financial reports for proper auditing of the advertising fund

An agreement (regardless of the name), that satisfies the overall definition of an agreement as per the Code, will be governed by the franchising Code. It means that any agreement (written or otherwise) that abides by a set of management rules, pays regular fees and uses the trademark of an established company to run its operations is probably a franchising business.

Franchising, like other commercial relationships, works within the framework laid down by the Australian Competition and Consumer Commission. It is a watchdog over non-compliance. Any breach in compliance is subject to hefty penalties such as fines. If you have any doubt about the compliance aspect of the franchisor system you are working under, consult your franchise solicitor to avoid being liable to penalties.

It is true that when the franchisors are non-compliant with the systems that comply with the law, it is their fault. But this may result in them being made to introduce a robust compliance agenda that affects the franchise system working under them, that you are part of.

In Closing…

It is essential for you to be well-versed with the code that applies to your franchise business. The Code is your franchising bible. It provides you guidance and makes you aware of your rights and responsibilities as a franchisee. Try to get complete details about the working of the franchise system from the ex-franchisees who have run their business successfully.

They can provide invaluable insight into how the system works and the things you need to be looking at to keep your bases covered. In turn, this will help you make a well-informed decision and embark on your franchising venture with your eyes open.

When you perform due diligence before entering into a franchising agreement, it helps you avoid pitfalls and gives you a solid footing. You will be more confident while entering the system and will be able to make an early success of your franchisee venture.

If you want to know more, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.

Thanks for reading,
The Franchise Institute Team
1300 855 435

The post Why Compliance Is So Important In The Franchising Space appeared first on Franchise Insitute.