Franchise Operations

Franchisee, Can Software Get You in Trouble?

Franchisees pay for many items of value when they invest in a franchise business opportunity. Often that includes specialized software. Proprietary software can be a big investment for a small business, and automating many of the tasks of a business can save significant amounts of money. Software can also sometimes create problems.

For example, some franchises use time clock software to track worker schedules. Time clock software is a popular type of software for businesses that have complex scheduling, such as restaurants and retail stores. Such software may work like a spreadsheet, making sure that there are workers in the shop all the time, with more at busy times and fewer a slow times. It may help ensure that workers don’t come in early or leave late, and may be designed to avoid unexpected overtime. The most sophisticated software of this type not only schedules workers, but also alerts the business when labor costs are becoming a higher percentage of the revenue than is desirable.

Obviously, this is very useful, but some legal advisers suggest that it could also lead franchisees unwittingly into a joint employer situation. If a franchisor checks labor costs as a KPI and has access to time clock software, it could be construed as the franchisor having a hand in day to day worker scheduling, even though the franchisee makes all scheduling decisions.

Another example might be the websites many franchisors offer their franchisees. Of course, it’s great to have a website — all businesses need websites. But franchisee’s websites often are just pages on a central website. Visitors click through to their local franchisee’s page, and see information about that franchise.

Sometimes, however, franchisees don’t make the effort to keep their pages up, or they don’t have the skills to do it themselves and they don’t want to make the investment to have it done. When some franchisees don’t keep up their pages, it can make neighboring franchises look less appealing to visitors who check out several locations. On the other hand, if they can’t opt out and they don’t want to figure out how to keep up, those slacker franchisees may feel just as frustrated with the website as the other franchisees feel with them.

One more example is the enterprise-level software that tracks everything from sales to marketing, and lets the corporate office track franchise performance in real time. This kind of software is often presented as a way to track KPIs without disturbing or interfering with the franchisee.

But that might mean that you don’t realize the central office is following your every move. Would you do things differently if you knew about the oversight? Maybe not, but it’s unnerving to know that someone else had access to your data all along, without your realizing it.

When you look into franchise business opportunities, don’t space out during the discussion of the software. It can be a blessing — and usually is — but it can also be a challenge. If you see any concerns, be sure to discuss them with your franchisor, and also with the current franchisees you interview.


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