With the risk of franchisors being jointly liable for obligations to franchisee employees, and franchisees exposed to unionization of employees if their franchisor is a joint employer, we present this list of 68 steps every franchisor and franchisee can, and should consider to reduce the risk of joint co-employer liability.
These steps also build relations with customers, communities, employees and suppliers and can help improve and expand successful franchised businesses and systems.
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Franchisor's entity name can be different than franchise brand.
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Franchisee's entity name can be different than franchise brand.
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Business card on counter can state franchisee's name and "independent franchise owner."
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Plaque in customer area can identify franchisee as independent franchise owner (with owner's photo).
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Local ownership and identity of independent franchise owner(s) can be promoted in the community.
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Franchisor can participate in national and regional associations, making sure to promote pride of independent ownership of franchise outlets.
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Franchisee owner can be active in local chambers of commerce and trade associations, making sure to communicate pride of independent ownership.
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Store-level customer receipts can state franchisee's entity name and "each location independently owned and operated."
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Store can use stationery that identifies independent franchise owner.
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Store level brochures can identify independent franchise owner.
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Franchise owner(s) can be present at store(s) daily or periodically, up front, with "owner" name tag, greeting customers.
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Store can display certificates of training, awards and honors identifying independent franchise owner.
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Each franchisee can be a corporation or limited liability company, not an individual.
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Local store advertising can state that location is independently owned and operated.
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Local advertising can include franchisee's name and photo.
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Media events and community public relations can discuss and show photos of all the local independent franchise owners.
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Franchisor's website can emphasize independent ownership, e.g., picturing the independent owner and providing a biography, with the link for each location.
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Franchisor's social media can explain independent ownership.
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Franchisor's social media can feature a rotating biography of each independent owner.
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Franchisee can educate its employees in new hire orientation as to nature of franchise relationship.
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Franchisee can educate its employees that they work for the franchisee.
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Back-of-store interior signs can remind employees they work for the franchisee.
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Business bank accounts and checks can bear franchisee's name, not franchisor's name or logo.
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Variations can be encouraged in store layout/design letting each franchise location look a little different while adhering to brand requirements.
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Franchisor can avoid instructing or directing franchisee's employees, but communicate to franchise owner.
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Employment application can state franchisee's name and note that applicant is applying to franchisee for employment.
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Franchisee can make its own hiring decisions.
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Franchisee can set its own employee compensation policies.
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Franchisee can make its own discipline and termination decisions.
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Franchisor can instruct field personnel to avoid advising franchisees on any employment matters.
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Franchise agreement can state parties' mutual intent that franchisee makes all decisions on firing, firing, compensation and disciplining franchisee's employees.
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Franchise agreement can state parties' mutual intent to be independent contractors.
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National and regional advertising and website can state "each location is independently owned and operated."
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Franchisor can remove from Operating Manual those controls or requirements that are not essential to protection and uniformity of the brand.
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Franchisor can provide training programs only for franchisee's supervisorial and managerial employees and require franchisee to train its staff.
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Franchisees can be free to purchase supplies from any source as to which standardization is not essential.
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Alternative supplier options can be provided to franchisees for supplies that are essential to brand.
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Franchisees can remind suppliers their customer is the franchisee, not the franchisor.
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Utility accounts can be in franchisee's name.
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Premises can be leased by the franchisee.
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Franchisee can do its own scheduling of employee working hours.
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Franchisee can set its own hours of operation.
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Franchisor can remove from franchise agreement all controls or requirements that are not essential to protection and uniformity of brand.
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Franchisee can have choices of several alternative uniform styles and dress codes.
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Franchisee can have some variation in goods and services offered per local preferences while still adhering to brand requirements.
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Franchisee can set own prices while still adhering to brand requirements per applicable law.
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Franchisee can consult its own legal counsel on questions about treatment of employees.
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Franchisees can have their own employment manuals and not use franchisor's.
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Franchisor can obtain EPLI insurance.
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Franchisor can require franchisees to obtain EPLI insurance.
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Franchise Agreement can require franchisees to indemnify franchisor for wage and hour and other labor and employment claims by its employees.
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Encourage franchisees to be active in community, support community events, speak to city council and legislative bodies, always noting independent owner status.
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Franchisor can provide franchisees pre-written news columns about the franchise, that franchisees can get published in local community newspapers.
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Product packaging can note independent ownership, and identify independent franchise owner(s).
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Franchisees can have their workers sign a disclaimer acknowledging which person/entity they work for.
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Franchisee's name can be stated when a live person answers franchisee's phone.
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Franchisee's recorded phone message can state franchisee's name.
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National and regional brand advertising can note each location is (or many locations are) independently owned and operated.
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Regional cooperatives in advertising, can state each location is independently owned and operated.
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Beyond disclaimers, weave fact of independent, local ownership into message, content and theme of brand advertising.
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On website's list of franchise locations, list owner's name with each location.
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Franchisees should file fictitious business name statement per state and local law.
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Franchisee's independent name should appear on both paycheck and separate stub the employee retains.
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Franchisor should not obtain or maintain records or files of franchisee employees.
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Franchisor can avoid operating at or from the same location as a franchisee.
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Franchisees can pay their liability, workers compensation and other insurance policy premiums on time and not let insurance lapse.
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Franchisees can employ one or more assistants or helpers.
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At annual franchise convention, remind franchisees of independent ownership.