What You Won’t Learn From Your Franchisor

By Kathleen Gosser, Ph.D.

So, you have entered into a franchise agreement with a well-established and successful franchisor. You have an entrepreneurial spirit, capital and drive. You believe that you are on your way to infinite success due to the guidance and support you will receive. You are all set… or are you? 

A signed franchise agreement does not guarantee that your franchisor will teach you all you need to be a successful business owner. While you will receive a proven business model, there are many facets to running a business that you may not receive from your franchisor.

Department of Labor Impact on Franchisee Training

In 2016, the Department of Labor (DOL) provided insight on the interpretation of “Joint Employer.” The Wage and Hour Division of the DOL views joint employment in the franchise world to mean an individual worker is an employee of both the franchisee and franchisor.

This law has significant impact on the support, training and guidance a franchisor will provide.

There are provisions to make the final determination that include directing or controlling the work performed, employment conditions (hiring and firing), repetitive work (very often present in franchises) and the work is performed on the premises. In light of this interpretation, many franchisors are backing off the support they provide in terms of Human Resource guidance and advanced leadership skills training. 

An Education Gap in Franchising

There are other constraints in place that prohibit franchisors from providing all the information needed to make strategic decisions as a franchisee. Gaps in franchisee education include how to ensure you remain profitable, including managing labor and cost of goods sold, or how to fund your franchise and growth is not always readily available information. For example, while pricing recommendations can be made, the franchisee has the right to price however he/she chooses in the marketplace—thus an area where guidance could be extremely beneficial.

The Business School Proposition

How do franchisees find the information they need to be successful? Aside from gaining and learning from hands-on experience, they have to search for it. There is a great deal of information online; however, it takes some digging. There are courses available through the IFA as well. 

But nothing matches the education that can be earned from a business school.

Coupling a great franchise with sound business principles is a recipe for success. Business schools impart the knowledge you need to better understand the higher level strategic needs as well as the franchisor business model.

To meet this education need, the AACSB-accredited College of Business at the University of Louisville recently launched an innovative, one-of-a-kind Franchise Management Certificate, with the first cohort starting coursework in February 2019.

For more information on the program, visit uofl.me/2z6cmhL.

Dr. Kathleen Gosser (PhD, University of Louisville) is an experienced leader in the franchise industry and a passionate educator. In her 30 year career in the franchise industry, she has enjoyed numerous roles, including leadership of customer satisfaction programs, operations measurement, employee recognition, training and team member engagement efforts. She also had direct P&L accountability as the Region Coach of 10 restaurants in Louisville, Kentucky.

This blog post was originally published on Fransocial.