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HR Challenges for Franchises

If you own a franchise, then you need to be aware of issues you may face. Here are the biggest HR challenges for franchises.

October 30th, 2023


The largest and most expansive franchise in the world is McDonald's, with over 38,000 locations worldwide. Those locations are spread out in more than 100 countries with varying currencies, consumer tastes, and consumer habits. The company has managed to grow more successful with time and continues to dominate the market.

However, expanding a franchise like this comes with a host of challenges and difficulties. Your company has to deal with handling locations across long distances. It also needs to comply with the changing landscape of compliance and regulations. For franchisees, there are challenges with juggling multiple responsibilities and locations while remaining compliant.

Here's everything you need to know about the biggest HR issues for franchises and how to navigate them.

Juggling Multiple Locations

The first big issue as a franchise owner is taking on responsibility for multiple locations. It's difficult enough for business owners to manage a single location, but opening up multiple leads to special HR challenges and difficulties managing the people who work at each of them.

For example, you'll need to hire managers for each business location to take care of things while you're not there. You could trust a professional from the area to run your business on your behalf, check in with them on occasion, and have some kind of way to monitor things from afar.

In addition, a business should consider the specifics of the location they're moving into. This includes information like market demand, competition, and demographics of the area.

Learning about a prospective location is especially important if you're expanding your franchise into another country. States have different expectations and laws. Meanwhile, other countries may require much more significant changes to how you operate your business.

Hiring Quality Talent

Your HR department may also struggle to bring in quality talent at these new locations.

As a franchise, you're likely going to move into areas that haven't relied on your services or products in the past. That means your competitors will have already hired some of the best talent in the area.

When it comes to the talent they haven't acquired, you'll have to convince them that your franchise is just as worth working for as the ones they're more accustomed to.

There's also the HR struggles of retaining talent. It has proven difficult these days to keep employees around in any business. High employee turnover isn't great for employee morale or productivity.

Payroll Complexity

Getting your payroll right is key to promoting good relations with your employees. Pay them too late, and they'll look somewhere else for more reliable income. Make mistakes with their payment, and you open yourself up to a lawsuit.

Managing the payroll becomes even more difficult as your franchise expands to different areas and time zones. Some states have specific limitations on how you pay your employees and how your company gets taxed.

There are three ways to make payroll quick and painless.

First, utilize modern payroll software to ensure there are no mistakes. Next, create comprehensive digital access so employees can verify and double-check their payroll information. Finally, make sure of your software's included support team.

Your business will also want to stay in constant communication with its employees about any changes to the payroll or how they receive their scheduled payments.

Regulations and Compliance

Another tricky area for your HR department is handling regulations and compliance measures. How your company operates in one area will not necessarily translate to how it operates in another. The same applies to how a company hires employees, pays them, and what kind of benefits they can provide.

If you're moving into a new country or state, you also have to take into account taxes and other legal documentation. Your lawyer back home likely won't have the necessary experience practicing law in another region.

HR compliance software can help digitally store and organize all essential documents and information. It can also manage benefits and payroll, ensuring compliance for all employees.

Sufficient Security Measures

The last of the franchising tips is to invest in sufficient security measures for all of your locations. With how the internet and cloud networks function, all of your individual locations can leave you vulnerable to a cyberattack. This is especially true if you don't set limitations on what kind of data your users can access.

The first step is to keep all of your software up to date. It's easy to lose track of this upkeep when you have franchises spread out all over the country. However, this is key if you want the best security available at all times.

Second, set limitations on what users can access based on their position in your company's hierarchy. Managers need to be able to access important company information at all times. Lower-level employees should have to request special permissions to do the same.

Encryption and passwords are key to secure your email, online platforms, and various devices used in your daily operations. You may want to regularly update your passwords for an extra layer of security.

Final Thoughts

HR issues for franchises are arguably much more significant than they would be for solitary businesses. While franchising is a great opportunity to grow your business and expand its reach, it also means opening it up to all kinds of complications. It's nearly impossible to do alone, which is why you'll need help getting started.

GoCo is a top-rated HR solution that's easy to use and can manage payroll, new hire onboarding, performance management, and more. Take a tour and see how GoCo can simplify your HR.

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