Being proactive is a good thing, especially if you’re currently in the franchising business. Earlier in the year, The International Franchise Association (IFA) released their 2016 State of the Industry Report, which provided an optimistic forecast for the franchise industry-1.7% growth in 2016, adding a total of 795,932 franchise locations across the country.
Other 2016 stats estimated by the IFA and forecasting firm HIS Economics were:
- The IHS Economics forecast of output growth in nominal dollars for franchise businesses will increase this year by $52 billion, 5.8 percent, to $994 billion.
- For the past five years, the average annual job growth in the franchise sector was 2.6 percent, nearly 20 percent higher than all businesses economy-wide. Over the last five years the franchising sector has added nearly 1 million jobs to the economy.
While growth is a great thing for business, there’s still a cloud looming over the franchise industry-the joint-employer rule. According to an article by The Business Journals, the ‘ÉNLRB ruled last year that even indirect or potential control over workers’ terms and conditions of employment was enough to make a company a joint employer.’ This means two critical things that many franchises must continue to think about:
1) Franchisors are potentially responsible for any employment law violations, whether committed by that franchisees or contractors
2) Unions might be prone to organize (or unionize) franchise workers
Even though the NLRB’s Joint Employer Ruling creates uncertainty about the future of the franchising industry, it does not have the power to destroy a business model so entrenched in the American way of business. Franchising provides access to small business ownership for hundreds of thousands of people in the United States. Franchisors have worked diligently to create the proper systems and support offerings that all the brand to thrive and promote the success of the American economy.
How Hireology Can Help Your Franchise
The best franchises can do is place a focus on those who represent their brands-the employees-and ensure that they’re hiring the right people (from corporate employees to those employed at different franchise locations). According to a white paper from Xpert HR:
‘Most employers, including franchise owners, would likely agree that the success of a business lies with the people who do the work. Hiring for skills, experience and attitude is important, but equally important, and some might even argue more important, is hiring employees with behaviors and values that are in sync with the employer’s brand.’
If the Joint Employer Ruling passes there is a solution ready-Hireology’s hiring process provides franchisors the ability to create consistent hiring practices amongst their franchisees and reduce risk of litigation. Our platform is a systematic, scientific hiring tool that can be utilized by either the franchisor or the franchisee-allowing for the necessary flexibility required of the franchising sector.
Regardless of what the federal verdict will be on the joint-employer rule, Hireology is ready. If the ruling doesn’t pass, franchisees will be able to hire the right kind of employees to increase profits and make the hiring process more efficient and effective. Franchisors will feel confident that those who are working on the ground floor are productively pursuing the success of the business-increasing profits and improving the brand’s reputation.
If it does pass, Hireology is able to immediately provide franchisors control over hiring at their franchise locations to create a consistent, effective hiring process and reduce the risk of legal ramifications.
With Hireology, franchise brands are ahead of the game. To learn more about how you can overcome the uncertainty of the joint-employer rule, download our complimentary eBook below.