Franchising offers a unique business model, but when it comes to managing people, things can get a bit complicated. Both franchisors (the parent companies) and franchisees (the individual owners) share HR responsibilities, but who handles what? I had the opportunity to speak with Robert Rosenberg, former CEO of Dunkin’ Donuts, who led the company for over 30 years. During his time, Dunkin’ Donuts grew from a regional chain into a global franchise powerhouse. His experience highlighted the critical role of leadership and HR in the success of a large-scale franchise.
How Does Leadership Impact HR In Franchising?
Leadership plays a crucial role in any franchise model. The key functions of a leader—strategy, building a team, communication, and crisis management—are vital for both franchisors and franchisees.
For franchisors, the strategy involves providing clear HR guidelines and training programs that franchisees can follow to ensure consistency across locations. For franchisees, building an effective team that reflects the brand values and delivers exceptional service is key to long-term success.
During my conversation with Robert Rosenberg, he emphasized the importance of leaders being collaborative and open to listening. His approach to leadership, especially in how he managed relationships with franchisees, underscores the importance of adaptability and communication in HR. These qualities help ensure that both franchisors and franchisees work together to keep operations running smoothly.
How Can Franchisees Improve Employee Engagement?
One of the critical HR challenges franchisees face is keeping employees engaged and motivated—especially in industries with high turnover, like quick-service restaurants. Encouraging curiosity in the workplace can help address these challenges. Leaders who foster a culture of asking questions and exploring new ideas tend to have more engaged, motivated teams.
By creating an environment where employees feel comfortable sharing their ideas and concerns, franchisees can improve engagement and reduce turnover. Simple things like asking, What can we do better? or How can we make work more enjoyable? can lead to practical solutions that keep employees invested in their roles.
Who Handles What? The Split Between Franchisors And Franchisees
In a franchise, both the franchisor and franchisee have distinct HR responsibilities. Franchisors generally manage the big-picture tasks, such as:
- Developing training programs
- Offering recruitment tools and guidelines
- Ensuring compliance with labor laws across all locations
Franchisees, meanwhile, handle the day-to-day operations, which include:
- Hiring and managing their own teams
- Handling payroll and benefits administration
- Maintaining a positive work environment to keep turnover low
Global Franchising Challenges For HR
When a franchise expands globally, HR’s role becomes even more complex. Franchisors need to understand and navigate local labor laws, cultural differences, and varying employee expectations. This means HR has to create adaptable frameworks that franchisees can use in different countries while maintaining the brand’s core values.
Challenges for HR in global franchising include:
- Compliance with Local Laws: Each country has different regulations regarding wages, benefits, and employee rights. HR must ensure that franchisees understand and comply with these local laws.
- Cultural Differences: What motivates employees in one region may not work in another. HR has to create training and engagement programs that respect cultural norms while maintaining consistency across the brand.
- Communication Barriers: Language and communication styles can differ across regions, which may require HR to adjust how training materials and policies are delivered to franchisees and employees.
Conclusion: HR’s Role In Driving Franchise Success
Franchising doesn’t just run on brand recognition and great products—it thrives on a strong HR foundation. Whether it’s a local operation or a global expansion, HR is the glue that keeps consistency, compliance, and employee engagement in check. For a franchise to grow and succeed, franchisors and franchisees have to be on the same page, constantly adapting to new challenges.