A franchisee has a very unique position. On the one hand, they are running a business, such as a fast food location, an auto dealership or another type of retailer.
At the same time, this isn’t a business that they started. They’ve purchased the license from the franchisor, so they are legally allowed to operate under that business name.
As such, the person operating that franchise location may wonder if they are in charge of hiring and firing employees, or if that ability resides solely with the franchisor. Do they get to make choices about their staff, or are they going to be told who they have to hire and fire, the same way they’re told what products they can sell, what national sales and deals are happening and what other branding elements they can use at the location?
The franchisee still runs the business
As a general rule, the franchisee is allowed to make hiring and firing decisions. After all, they’re still operating the business on a day-to-day basis. They set the schedule, hire the workers, and do everything else that a small business owner would do to keep the company running.
The franchisor does have an impact on how the business runs, but it relates more to marketing efforts, branding and the development of products or services. The franchisee isn’t in charge of what type of hamburger a fast food restaurant sells, for example, but they can decide which employees they want to hire to serve those hamburgers.
Franchisees need to know exactly what obligations they have in this unique situation. Legal guidance can help.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.