Buying a Franchise: How to Check Staffing Obligations

A recognisable brand does not automatically provide the people needed for day-to-day operations. Before joining a franchise network, check how many employees the franchisor requires, what qualifications they must have and whether you can afford the necessary staffing arrangements. Staffing obligations are often not set out in a single contractual clause: they may arise from opening hours, service standards and the operations manual. You should therefore turn them into a concrete recruitment plan before signing.

1. Establish what the franchisor actually requires

A requirement for an outlet to have “enough trained staff” is not precise enough to assess the investment. Ask for written clarification of whether this means a minimum headcount, a certain number of people on site at the same time, or cover for specific roles throughout opening hours.

In particular, clarify the following:

• Must a manager be present on every shift?
• Which tasks may only be carried out by people with specific qualifications?
• Is there a mandatory staffing level when the outlet opens?
• Can you use part-time staff, student workers or external service providers where legally permitted?
• Who covers for an employee who has not yet completed the mandatory training?

Distinguish between legal requirements for operating the business and additional brand standards. A franchisor’s requirement may be stricter than the statutory minimum, but that does not make it a legal obligation. This distinction matters in negotiations: a brand standard can be discussed, whereas applicable legislation must be followed.

Also ask for a sample rota from a comparable outlet. It does not guarantee that the same model will work for you, but it will reveal whether the concept assumes additional staff for preparation, cleaning, deliveries or administration.

2. Translate the standard into actual staffing costs

The number of people on a shift is not the same as the total number of employees needed to run the business. The outlet must cover weekly rest periods, annual leave, sick leave and training time. If the figures only work with constant overtime, you need to revisit them.

Draw up a weekly table showing the cover required for each role. Include time before customers arrive and after closing, goods deliveries, stocktakes and meetings. Then work with an accountant or payroll specialist to estimate the full cost of staffing the business in compliance with the law.

Alongside wages and associated taxes and contributions, consider the following, in line with applicable rules and agreed terms:

• pay supplements for particular working arrangements;
• the cost of advertising vacancies, recruitment and induction;
• workwear and necessary protective equipment;
• mandatory examinations and training;
• travel and accommodation for training;
• the cost of cover and recruiting replacements.

Prepare a base case and a downside scenario. In the latter, assume that recruitment takes longer or that you need to offer higher pay to attract the people you need. Do not use the franchisor’s cost estimate from another country without adjusting it for Croatian rules and the local labour market.

3. Clarify responsibilities under Croatian law

Croatia has no dedicated law comprehensively regulating franchising, nor a specific mandatory standardised pre-contractual disclosure document for all franchises. A franchise agreement is an innominate contract — one not specifically defined as a separate contract type in legislation — governed by the general rules of the Civil Obligations Act, including the principle of good faith and fair dealing. You should therefore actively request the staffing information you need before taking on any obligations.

Employment relationships are governed by the Labour Act, while workplace safety is governed by the Occupational Safety Act, alongside other applicable regulations and collective agreements. Depending on the activity, additional professional, health or other requirements may apply. A franchise manual cannot justify conduct that breaches mandatory legal requirements.

If your business enters into employment contracts, it is the employer and bears the corresponding obligations. The franchisor’s approval of candidates or specification of service standards does not, in itself, transfer those obligations to the franchisor.

The European Code of Ethics for Franchising can serve as a guide to good practice, but it is not Croatian law and does not replace employment law obligations. Ask a lawyer to review both the agreement and the staffing sections of the manual, particularly if the franchisor requires involvement in selecting or replacing employees.

4. Agree a workable procedure for staff shortages

Before signing, agree what happens if you cannot fill a required role despite documented recruitment efforts. Do not assume that the franchisor will automatically allow a different rota or temporarily reduced opening hours.

Ask for a clear procedure: whom you notify, what evidence you provide, how quickly the franchisor must respond and what temporary arrangement it can approve. Any solution must remain compliant with legal requirements on employment and safety.

If the franchisor approves the manager, clarify the approval criteria, response deadline and scope for a temporary replacement. If training is required before an employee can work independently, check the availability of training dates so that one person’s departure does not unnecessarily disrupt the outlet’s operations.

Practical takeaway: before signing, prepare a list of staffing requirements, a legally compliant rota and a full staffing cost estimate. Assess the purchase on the basis of the team you can realistically recruit and retain, rather than the ideal shift shown in the sales presentation.