Franchise work practice policy or code of conduct

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

Franchise code of conduct statements

A franchise work practice policy or code of conduct should outline how the franchisor expects its franchisees to operate in order to continue operating within the franchise. It will usually include elements such as expected behaviours, business ethics, treatment of workers and environmental standards. It should include a statement that the franchisee will comply with all relevant legislation, which will cover all minimum employment rights and related legislation.

Minimum employment rights

Legislation

It is important to have this standardised across the franchise, so that all franchisees have a common understanding and commitment. This will ensure the 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. Have 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 try to avoid and resolve workplace issues
  • consult with the employees in relation to any proposed changes that will significantly impact them
  • try 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.

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


Code of conduct expectation of the franchisees

The franchise code of conduct should outline how the franchisor expects its franchisees to treat their employees. Please note that 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 workers engaged on 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 workers’ 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 workers.

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.

Base Code – Ethical Trading Initiative (external link)

Basic policy

If a franchise is just starting out and is not yet ready to implement a detailed code of conduct the franchisor:

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

The franchisor 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 105KB]

Page last revised: 09 September 2020

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