Work practice policy or code of conduct for franchises

Information for franchisors about developing a work practice policy or code of conduct for your franchisees.

Franchise code of conduct statements

A franchise work practice policy or code of conduct should outline how you expect your franchisees to operate so that they can continue operating within the franchise. It will usually include elements like expected behaviours, business ethics, treatment of workers and environmental standards. It should include a statement that the franchisee will comply with all relevant legislation, including minimum employment rights and related legislation.

Employee rights and responsibilities

Employment legislation

It is important to have this standardised across the franchise so that all franchisees have a common understanding and commitment. This will ensure your brand’s reputation is upheld. Examples of statements to include in the code follow.

Example statement

The franchisor and its franchisees agree that they will:

  • implement and maintain fair workplaces, having zero tolerance for worker exploitation
  • act in good faith
  • meet any required employment and immigration-related legal obligations
  • encourage/assist other franchisees to meet their employment and immigration-related legal obligations
  • encourage open communication between employers and employees to help avoid and resolve workplace issues
  • consult with the employees in relation to any proposed changes that will significantly impact them
  • aim to resolve disputes promptly, either directly with the other party or through mediation
  • recognise they have a shared brand and mutual incentive for success
  • act in accordance with this code of conduct, not just the contractual terms.

In addition, they should not impose conditions/obligations on the employees that are unreasonable, or overly onerous or unnecessary, to protect their own interest.

Good Faith

Expectation of franchisees

The franchise code of conduct should outline how you expect your franchisees to treat their employees. This is important:

  • as a condition of operating within the franchise (possibly included in the terms of contract)
  • so that franchisees understand the importance of having a code of conduct for its employees.

This may include the following declarations.

Example statement

The following applies to all employees engaged by the franchise.

  • They will receive lawful payment appropriate for their work, skills, and experience for all the hours they work, including training and meetings.
  • The franchisee will respect employees’ employment rights and ensure their franchise is free from illegal practices including discrimination, harassment and corruption.
  • Management systems will support good practice and clear accountability.
  • The franchisee and its employees will handle all business dealings with the highest standards of integrity and honesty.
  • Any business improvements in the franchise will fairly balance the needs of the franchisees, franchisor, customers and employees.

For more information, the Ethical Trading Initiative Base Code can also be referenced. This has been founded on the conventions of the International Labour Organisation’s (ILO) core convention elements and is an internationally recognised code of labour practice.

Ethical Trading Initiative Base Code – Ethical Trading Initiative(external link)

Basic policy

If your franchise is just starting out and is not yet ready to implement a detailed code of conduct, you may wish:

  • to commit to complying, and ensuring franchisees comply, with employment standards
  • to release a brief statement informing employees of this together with a draft employment policy while a code of conduct is drafted. 

You should involve any existing franchisees and employees in this process. 

The example basic employment policy could be used as a starter.

Example of a basic employment policy [PDF, 105 KB]

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