Franchise staffing: what to check before buying

Buying a franchise gives you a business model, not a ready-made team. Even a well-known brand cannot guarantee that your chosen city will have suitably qualified staff willing to work for the salary quoted in the sales presentation. To build a sustainable franchise business, check the staffing requirements before committing: who needs to work at the outlet, what the team will really cost and which decisions remain yours as the business owner.

1. Check shift coverage, not just headcount

Start by requesting a staffing model for your chosen outlet format. A table of job titles and salaries is not enough: you need opening hours, the staffing mix for each shift, a task list and qualification requirements. Establish separately whether the model assumes that the owner will work in the business every day.

Ask the franchisor to provide:

• a sample staff rota for a comparable outlet;
• job descriptions for the manager and frontline staff;
• minimum staffing requirements for each shift;
• arrangements for covering sickness and annual leave;
• a list of tasks carried out before opening and after closing.

Then draw up your own weekly task schedule. Include customer service, taking deliveries, cleaning, stocktaking and reporting. If one employee is expected to receive a delivery while serving a queue of customers, the model needs clarification, even if the total wage bill looks attractive.

Check the rota against the Russian Labour Code, including working time limits, rest requirements and overtime pay rules. You cannot simply divide the outlet’s opening hours by the length of a shift and assume that the resulting headcount is sufficient. Some working patterns may require working time to be calculated over a longer reference period; discuss how to arrange this with an HR specialist in advance.

Pay particular attention to the owner’s role. If projected profit assumes that the owner works as an unpaid manager, compare two scenarios: managing the outlet yourself and employing a manager. These are different propositions in terms of both workload and returns.

2. Calculate the full cost of your team

The salary in the presentation is only a starting point. Check whether it is quoted before Russian personal income tax (NDFL) or as the employee’s take-home pay. To calculate your costs as an employer, you need the gross salary plus the mandatory employer contributions payable on top.

Your staffing budget should include:

• statutory social insurance contributions at the applicable rates;
• bonuses, additional payments and compensation required by law or your pay arrangements;
• recruitment, job advertising and recruitment agency fees;
• training, business travel and accommodation during training;
• uniforms, compulsory medical examinations and other necessary expenses;
• cover for absent staff and recruitment costs when employees leave.

Do not automatically add holiday pay on top of a full year’s wage bill: first establish your calculation method to avoid double counting. However, the cost of employing someone to cover annual leave must be accounted for separately.

Check the local labour market. Compare vacancies with similar duties and working patterns, rather than simply matching job titles. Discuss the proposed terms with candidates or a local recruitment specialist. Requirements to work evenings, sell additional services or take on greater responsibility will affect how attractive the offer is.

Draw up a payment schedule covering the period before your first sales. You may need a manager while the premises are still being fitted out, and the team may need to start before opening for training and to get processes in place. These costs should be included in your start-up budget, not come as a surprise after you have paid for the franchise.

3. Distinguish brand standards from employer responsibilities

In Russia, commercial concession arrangements—the legal framework commonly used for franchising—are specifically regulated by Chapter 54 of the Russian Civil Code. Article 1031 provides for the transfer of necessary technical and commercial documentation and for instructing the franchisee and its employees on exercising the rights granted under the agreement. This does not, however, mean that the franchisor must recruit your team or pay for every round of retraining.

Employment relationships are governed primarily by the Russian Labour Code. If you hire staff through your Russian sole trader business (IP) or limited liability company (OOO), you are the employer. The network’s service standards do not transfer responsibility for employment paperwork, wages, workplace health and safety or compliance with working time rules to the franchisor.

Before buying, establish which powers the brand reserves for itself. For example, does it need to approve your manager? Must employees pass a formal assessment? Can a network representative require you to remove someone from customer-facing duties? These conditions must be assessed alongside employment law: a franchisor’s demand does not, in itself, provide lawful grounds for dismissal.

Nor can a penalty imposed by the network for an employee’s mistake automatically be deducted from that employee’s wages. Wage deductions and employees’ financial liability are subject to statutory grounds and procedures. The financial risk of breaching brand standards falls initially on the party to the franchise agreement.

4. Agree the staffing plan before signing the contract

Russia has no specific mandatory pre-contractual franchise disclosure procedure. You therefore need to request staffing documents and calculations yourself, and put the parties’ key obligations in writing.

Prepare a contract appendix setting out the staffing arrangements for launch. Specify the mandatory roles, training requirements, number of employees to be trained, training location and allocation of costs. If staff must pass a knowledge assessment before starting work, agree the assessment criteria, the deadline for receiving results and the opportunity to retake it.

Address the replacement of key employees separately. Who trains a new manager, how much does it cost, and can the outlet continue trading until the training is complete? Uncertainty here could turn an ordinary resignation into an outlet closure.

Finish your checks with a stress-test scenario: opening is delayed, the manager resigns and recruitment takes longer than expected. Calculate the cost of retaining the team and identify the terms for postponing the launch that you need to agree with the franchisor.

Practical takeaway: before buying a franchise, prepare three documents—a staff rota, a full staffing budget and a written allocation of responsibilities for preparing the team. If the model is viable only with constant overtime or unpaid work by the owner, reconsider the terms of the deal.