Running a large Corporation and dealing with thousands of employees is quite difficult. Luckily in franchising most all of the employees are controlled by the franchisees themselves, and not the parent company. Some franchisors do have a tremendous number of corporate run stores, but generally speaking the franchisor’s business model is to sell franchised outlets which are run by other folks.
Now then, this is good because you don’t have to deal with labor unions, however sometimes the franchisees will form their own unions and call them; franchise associations. Luckily, when they do this, their goals are similar to the franchisor’s goals, and that is to extend the brand name and make money. When the franchisees make money, there is more royalty income for the franchisor, and everyone’s a winner right? Yes that’s true, but let’s get back to labor unions, and franchise operations.
Small businesses may not have labor unions, or employees necessarily forming groups to dictate how the business is run, and how much they will be paid. Nevertheless, you’d be surprised how employees will get together, and start bossing around the franchised outlet owner. Before retirement, I was in the car wash in Houston business, and later became a franchisor in that industry. As I also noted that carwash employees would get together, form little miniature unions, and start demanding things.
If I didn’t acquiesce, they would do work slowdowns, show up late for work, threatened to quit, or even walk off the job. As this happened, I would often fire the entire crew as an example, and hire new people. Unfortunately, the new people I hired had to be trained, there was a learning curve, and this disrupted the flow of customer service. After I started franchising, I often had franchisees complain about their employees trying to pull a fast one, or make unreasonable demands.
This is a lot more common than you might think, and most franchisees who have ever been in business before don’t understand how to deal with this, they’d rather look like the good guy, and they can remember a time when they were an employee before they bought the franchise. However, one problem with employees is that familiarity breeds contempt and over time it becomes a huge problem.
Franchisors would be wise to explain the process of defusing challenges to their authority by their employees in their confidential operations manual, while at the same time being very careful not to break employment law. If not the franchisees can get themselves into trouble and even find disgruntled employees coming back threatening violence. I’m serious it’s a real problem, and far too few people are talking about. Perhaps the subject is taboo, or not politically correct.
Nevertheless, it is a real problem that must be addressed in the workplace if the franchisor’s brand name is to be maintained by the franchisees and quality customer service maintained at all times with consistency to the clients. Please consider all this and think on it.