Franchisors assuring ethical and sustainable work practices

To reduce brand reputation risk, a franchisor should implement and ensure their franchisees operate using ethical and sustainable work practices.

Franchising relies on a good relationship between a franchisor and its franchisees. A franchisor’s success also depends on their franchisees’ success and vice-versa. Promoting fair workplaces by assuring ethical and sustainable work practices in a franchise model can be key to success or failure.

A well-structured franchise model is a mutually beneficial arrangement that provides franchisees with the right level of support to ensure success. Although it is the responsibility of each franchisee to comply with employment standards, franchisors should be concerned with the ability of the franchise as a whole to be compliant with employment legislation. 

Breaches of employment standards will have a negative impact on the franchisor’s brand and affect all parties within the franchise.

Franchisors should have processes in place to ensure that all franchisees comply with New Zealand legislation. This should be standardised and documented centrally by franchise management and applied so that all franchisees will implement and act on it correctly.

Franchisors could use the following information to help assure ethical and sustainable work practises in their franchise models.

Managing risks throughout the life of the franchise contract

Franchisors should monitor and manage employment compliance risks (identify and mitigate) throughout the life of a franchise contract.

Franchise work practice policy or code of conduct

Guidance for franchisors on developing an ethical and sustainable work practices policy or code of conduct.

Page last revised: 09 September 2020

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