Recruiting staff, retaining good staff, and industrial relations are the major challenges for franchisees, according to Griffith University PhD candidate Ashlea Kellner, who is conducting the research.

“Industrial relations, and in particular the recent Fair Work changes, is the area franchisees who employ staff struggle with the most,” Keller said. “Often franchisees donÍt investigate this type of support when assessing franchise opportunities and levels of franchisor support vary from franchise to franchise.

So how much support do franchisors give their franchisees?

Keller said she expected most franchises would be offering similar support, however the research revealed the opposite.

“Some franchisors donÍt offer support with managing a franchiseeÍs staff because if the franchisor provides a franchisee with the wrong advice the franchisor is liable.

However if a franchisor doesnÍt provide advice and a franchisee makes a mistake, such as accidentally underpaying staff, the franchise brand may be damaged, potentially adversely affecting the entire franchise network.

The recent news of former 7-Eleven franchisees underpaying staff highlights the risk to a brand, Keller pointed out.

Franchisees should consider the level of support available before they sign up to a franchise, Keller warns.

It’s particularly a problem for established franchises with so-called mum and dad franchisees, who have no experience and don’t understand industrial relations. They need to ask what kind of support is available.

“ItÍs something franchisees donÍt think will be a problem, and if they donÍt have experience managing people, which many donÍt, they underestimate how hard it is.”

Where can franchisees get support?

• Franchisees can join their industry professional body at an additional expense, which can provide information and resources,
• Franchisees may form strong internal networks with other franchisees and call each other for advice

The research is based on 50 interviews from across four franchise businesses in the retail and hospitality industries. Final research findings are expected in early 2012.