Best Practice Hub

FANZ supports best practice in franchising.  In view of recent employment issues that have arisen in Australia in franchising, FANZ has developed some recommendations for franchisor members to help them to assist franchisees to comply with their employment obligations.

FANZ’s general recommendation is that all franchisor members consider how they can support franchisee compliance with employment laws where the franchisee employs staff.  Franchisors can support franchisees in a variety of ways, through access to or directly providing franchisees information and education, tools, legal requirements (i.e. through specific Franchise Agreement or Franchisee Manual requirements) and monitoring.

While franchisors are separate legal entities that are not responsible for franchisees’ legal compliance, FANZ recommends franchisors take an active approach in some or more areas.

With the above in mind, any franchisor having any concerns about their own position should of course seek their own legal advice, and the following recommendations are not intended as a substitute for legal advice. They are intended as a number of options that could be considered by the franchisor and their advisers.

FANZ recommendations are:

  • Ensure that your franchise agreement clearly and specifically requires franchisees to comply with all New Zealand employment laws.
  • Keep franchisees updated about their employment obligations, and ensure mandatory changes to employment agreements are rolled out to franchisees. Depending on the size and resources of the franchisor, engage external HR specialists to train, update and assist franchisees in understanding their employment obligations. An employment “hotline” could be organised for franchisees who have employment issues or questions.  Set up a hotline or email account for employees to contact the franchisor directly if they have any concern about underpayments. Consider requiring franchisees to provide this information to their staff as part of their induction.
  • Include regular spot checks in field visits. The spot checks would, for example,  check franchisee compliance with employment obligations. Encourage franchisees to join an industry association (e.g. Restaurant Association), where those industry associations provide useful employment guidance to members.
  • Require or recommend franchisees use a cloud based payroll system.
  • Depending on the size and resources of the franchisor, implement spot checks or reviews of pay slips and records to make sure franchisees are meeting their record keeping obligations.
  • Require franchisees to conduct “self-audits” and report results.
  • Require franchisees to notify the franchisor if any employee lodges a personal grievance or raises an employment problem.
  • Employment New Zealand [(part of the Ministry of Business, Innovation and Employment) has excellent online resources. Share these with your franchisees and encourage (or require) your franchisees to undertake specific learning modules.
  • Ensure that franchisees advise their new employees of Employment New Zealand’s resources so that the employees are aware of their rights.
  • Franchisors should act if they are put on notice that a franchisee may not be complying with their employment obligations.



Know your minimum employment rights and responsibilities

Online Employment Learning modules have just been launched by Employment New Zealand, part of the Ministry of Business, Innovation and Employment.

For our hiring managers…

The six employer modules take you through essential employment information from what must be in employment agreements to a quick guide on annual leave/holidays obligations.

For new employers, these are a great way to find out everything they need to know about their responsibilities. You can start today by visiting

For our employees …

Another six modules have been created for employees, to help them understand their minimum rights. The modules are a handy resource for employee inductions and for current employees, keen to get up to speed on their minimum rights.

It’s important to start any employment relationship on the right foot and these modules help to identify and mitigate any misunderstandings at the outset.

Get your employees to complete these free online modules, particularly those employees who are new to work or new to New Zealand.

There’s plenty more on employment agreements and other important topics in the online modules, which can be found on the Employment New Zealand website here

Employment agreements modules:

One of the most important modules for both employers and employees are employment agreements.

Employment agreements give both parties clarity on what’s expected of each other and the key employee and employer rights and obligations. It also helps you to understand what the job involves, the working conditions and processes to use when a problem arises.

 Know your Labour Rights

Please click here for Labour Rights Principles.

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