Franchisees: Avoid overstaffing and overpaying

For many franchisees, hiring, terminating employees and finding the right pay amount, is one of the most stressful aspects of running a franchise business. Thankfully, many franchisors offer training on how to deal with labor. However, franchisees will, even after being trained, still make mistakes. Therefore, we would like to provide you with some important advice.

When franchisors help franchisees interview potential employees, they never hire someone who is overqualified. Why? Well, not only is it expensive to hire these people but they are more likely to become bored and not stay very long.

Franchisors usually send out operations staff to the franchisees. They will help the franchisees determine how to find the best staff and how to best staff their store during busy periods. The operations personnel will help you with little details to prevent you from spending unnecessary money.

It may be wise to initially overstaff a shift rather than understaff in case it might be very busy. This will help prepare for the worst and you can always send someone home if necessary. One asset that does help is that all franchisees are required to have a POS (point-of-sale) system. These systems calculate all the labor. You can pull up a labor report at any time and see if you are overstaffed.

To determine the going rate for employees before your franchise opens, research the area and find out how much other businesses are paying. Get an idea of what they are paying and never pay the exact amount of minimum wage. You want the quality of the work being done to be good so pay employees well and correctly.

When franchisees do overstaff or overpay employees, the next common mistake they make is to become too friendly with staff. The problem with being overly friendly is that, if needed, franchisees find it difficult to terminate staff. It may even lead to blackmail. When franchisees start having relationships and friendships with certain workers, they lose the position of being the boss. Do not let this happen. Employees need to know you are the boss!

To sum things up:

1. Plan for the worst

2. Research hourly wages at area businesses to determine your rate

3. Do not become too friendly with your staff

Following this advice correctly will aid you in making the right decisions and in the end, the success of your franchise business.

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