24 Apr Compliance: The Best Way to Protect Your Brand
When you franchise your business, you want every outlet to embody your vision and your brand. After all, if you’ve taken the decision to franchise, then your business is no doubt successful, which means you have a reputation to protect. Part of this includes making sure that your franchisees are meeting their compliance requirements.
Like any business, a franchise has to comply with a number of external government requirements. Unlike stand-alone businesses, franchise outlets also have internal compliance requirements as well, to ensure each operates consistently across the network.
Monitoring compliance is important not only in protecting your brand, but in making sure you catch any potential issues before they become bigger problems.
As a franchisor, you have spent time and money developing a successful business and brand. The policies, procedures and systems you have documented are the recipe to recreate your success for each and every franchisee.
One of the big drawcards of franchises for customers is the uniform standard of product and service they get across the different outlets, no matter where they are.
If a franchisee is not following your framework, customers could notice the difference between the franchises and vote with their feet. The possibility of losing brand trust through the non-compliance of only a few ‘rogue’ franchisees is very real, which is why it’s important to make sure that franchisees are following your policies, procedures and systems to the letter.
Your franchisees also have to meet a number of external business requirements. For example, they must comply with legislation that governs workplace health and safety, taxation, insurance, fair work practices including wage rates, and superannuation obligations.
If a franchisee does not comply with these regulations, they run the risk of breaking the law. While you might not be deemed responsible for any illegal or non-compliant acts that your franchisee commits, any non-compliance that is made public can negatively impact on your brand as well as on that particular franchise outlet.
Ensuring that franchisees are following the laws is very important. It not only protects you and your business, but also the staff members who are employed by the franchise. Everyone has the right to be safe at work, and to be properly rewarded for their efforts. Being compliant with employment standards also acts as a positive marketing tool.
People are much more likely to want to work in a business that has clear systems in place, and respects the principles of fair and safe working conditions.
Monitoring compliance is important in making sure that your franchisees are not operating in breach of any laws, and are working to your requirements.
Here are a few practical suggestions for how to monitor internal and external compliance in your franchise:
- Ensure that the Franchise Agreement clearly explains the role of internal and external compliance and how it will be checked and monitored throughout the term of the agreement.
- Regularly check in with your franchisees to monitor their use of the business systems. The checking may take the form of informal conversations, but should also include regular formal auditing.
- Be aware of and communicate any changes to legislation that directly impact on franchises.
- Have a system in place for franchisees to report employee complaints, or notifications of any outside audits, by the tax office or Fair Work Australia, for example.
Contact us for some practical franchising advice on how to ensure that all areas of compliance are covered within your franchise business.
Thanks for reading,
The Franchise Institute Team
1300 855 435