Franchise operations managers: rules for acting on behalf of the franchisee

When converting an established business into a franchise model, decide whether future franchisees must run their outlets personally or may appoint managers to do so. This is more than a staffing detail. A concept that depends on the owner's daily presence needs different rules from an outlet run by an employee. A stable franchise network requires clarity from the outset about who runs the operation, whom they can legally bind and what happens when they are absent.

1. Decide whether you are offering an owner-operated or manager-run business

Start by describing the owner's actual work in your existing business. List the tasks they carry out in a typical week: drawing up rotas, placing orders, handling complaints, recruiting staff, checking the till or dealing with the landlord. For each task, distinguish between decisions that must remain with the business owner and those an outlet manager can take within agreed limits.

The option to hire a manager must not remain merely a verbal promise made during recruitment. If your concept requires the franchisee's personal involvement, explain what that means. A broad label such as “active owner” does not tell candidates whether you expect them to supervise shifts, be available by phone or review business performance regularly.

Before offering a franchise, answer these key questions:

• Which activities must the franchisee carry out personally?
• Can a manager take charge from day one, or only once the owner has learnt the ropes?
• What experience must the manager demonstrate?
• Does the financial model allow for the full cost of employing them?

If profits to date have depended on the founder's unpaid work, a paid manager will substantially change the outlet's financial performance. Include those costs in the model before presenting the business as suitable for an owner who will not be on site every day.

2. Separate the franchisee's responsibilities from the manager's authority

The Czech Republic has no specific franchising legislation and no compulsory registration of franchise agreements. A franchise agreement is usually concluded as an agreement of a type not specifically defined by law under Section 1746(2) of Act No. 89/2012 Coll., the Czech Civil Code. The agreement should therefore set out whether management through an appointed manager is permitted and on what terms.

Appointing a manager does not, in itself, transfer the franchisee's contractual obligations to someone else. The franchisee remains responsible to the franchisor for fulfilling those obligations. A manager may handle day-to-day operations without necessarily having authority, for example, to amend the franchise agreement or take on a new financial commitment.

Prepare a simple authority matrix. For each action, state who makes the decision, what limits apply and when approval is required. Distinguish between internal approval procedures and authority to act in dealings with third parties. An internal limit alone may not prevent a manager's actions from legally binding the business owner to a third party; have the scope of their authority reviewed by a legal adviser.

If the manager is employed by the franchisee, Act No. 262/2006 Coll., the Czech Labour Code, applies. Calling a document a “management contract” does not, in itself, bypass employment law. If the manager is to work as an external contractor, the actual working relationship must reflect that status, not just the contract's title. Head office should not take on the role of their employer without clearly defined arrangements.

3. Set up appointment and replacement procedures without unnecessary delays

If you want the right to approve an outlet manager, agree the process in advance. Specify objective requirements: relevant experience, knowledge of operating procedures, completion of training and the ability to communicate with head office. Also set out what information the franchisee must submit and when they can expect a response.

Avoid a rule that allows head office to reject a candidate without explanation or to leave the decision open indefinitely. The franchisee needs to fill the vacancy and is responsible for staffing the outlet. A practical process should protect the concept's standards, not create an unworkable dependence on a single decision-maker.

When a manager starts, record:

• the date they take over the operational role and the scope of their authority;
• contact details for routine and urgent matters;
• the system access they have been given;
• confirmation that they have been briefed on the relevant procedures;
• the person who will cover for them.

When replacing a manager, apply the same process in reverse. Revoke the outgoing manager's access, update contact details and arrange a handover of outstanding tasks. Head office approval of the new manager does not replace the employment-related steps the franchisee must take as the employer.

4. Arrange cover before an absence occurs

A manager's illness or sudden departure should not halt orders, prevent access to operational documents or interrupt communication with head office. Designate a backup contact and establish a procedure for temporarily taking over management. Specify when the franchisee must report the absence and how they will keep the outlet running until a replacement starts.

Before opening your first franchised outlet, work through a scenario: the manager fails to arrive in the morning and cannot be reached. Who will open up, allocate work, deal with a missing delivery and approve essential expenditure? If the answer is “we'll call the founder”, the system still relies on personal improvisation.

Practical takeaway: Prepare a one-page summary of roles, authority and cover arrangements. Test it against a typical working day, then incorporate it into your contractual framework. A franchise network can grow more reliably when a change of manager does not mean losing control of an outlet.