Staff in your first franchise: who manages the team and takes responsibility?

When you expand your business into a franchise network, you are not simply passing on your products or services and procedures. Your business model will be delivered by another business owner's team. If you have previously recruited staff, drawn up rotas and dealt with absences yourself, you need to decide before launching your first franchise which decisions remain yours and which belong to the franchisee. Otherwise, support can quietly turn into day-to-day management of another company's employees.

1. Separate brand standards from employer responsibilities

A franchise network brings together legally and financially independent businesses. A franchisee's employees therefore do not become employees of the franchisor simply because a franchise agreement exists. Their employer is generally the company or sole trader with whom they enter into an employment contract.

The franchisor sets the agreed standards for the business model: how services are delivered, the knowledge required, the appearance of the premises and the rules for using the brand. The franchisee, as the employer, handles recruitment, pay, working hours, leave and other employment obligations.

A standard should describe the required outcome, not take over a staffing decision. Requiring customers to be served by a suitably trained person is different from directly instructing a particular employee to work an extra shift the following day.

Before expanding, review how you actually manage your own outlet. Record every point at which you intervene in the team's work. Then decide whether each situation will require a franchise standard, support for the local manager or a decision by the franchisee. Pay particular attention to tasks you currently carry out without a written procedure.

2. Take account of Slovenia's legal framework

Slovenia has no specific franchising law, and franchise agreements are not a separately regulated type of contract under the Slovenian Obligations Code (OZ). The contractual relationship is governed by the general rules of the OZ, including the principle of good faith and fair dealing and the limits on freedom of contract. A contract cannot override mandatory legal provisions simply because the two business owners have agreed to do so.

The key employment legislation is the Employment Relationships Act (ZDR-1). Applicable collective agreements and other regulations relevant to the particular employer must also be observed. Occupational health and safety obligations are governed by the Health and Safety at Work Act (ZVZD-1). A franchise manual does not replace these obligations.

The allocation of responsibilities in the franchise agreement is therefore important, but simply describing a party as an independent business does not resolve every issue. How the relationship operates in practice also matters. If the franchisor were to regularly assign work directly to the franchisee's staff, or if the two businesses were to share employees, the employment law implications would need to be checked before introducing such arrangements.

The European Code of Ethics for Franchising is likewise a self-regulatory framework, not Slovenian employment law. Committing to the code does not remove an employer's responsibilities. A legal adviser should therefore review the proposed working arrangements, not just the wording of the clause establishing the parties' independence.

3. Set out staffing responsibilities

Before you start recruiting the first team, prepare a brief responsibilities table. For each task, identify who makes the decision, what support the other party may provide and what evidence will confirm completion. The document should be useful in day-to-day operations, not merely an appendix to be signed.

A sensible starting point is:

• Recruitment: the franchisee advertises the role, selects the candidate and enters into the employment contract; the franchisor may provide a template job description and criteria for professional competence.
• Pay and records: the franchisee sets legally compliant employment terms, processes payroll and maintains the required records; the franchisor may provide planning tools.
• Rotas and absences: the franchisee ensures adequate staffing while complying with working time rules; the franchisor defines the agreed level of service or operating requirements.
• Training and competence: the franchisor specifies the knowledge needed to deliver the concept; the franchisee ensures employees attend training and that their employment rights are respected.
• Employee misconduct: the franchisor reports any identified departure from standards to the franchisee's designated contact; the employer assesses the situation and takes any appropriate action under employment law.

Make specific arrangements for the local manager's role. Decide who covers for them, who receives the franchisor's findings and who confirms that any departures from standards have been corrected. This avoids conflicting instructions that leave employees unsure which manager to follow.

Label document templates as tools that the employer must adapt to their own circumstances. A standard form does not, in itself, guarantee lawful use by every member of the network.

4. Test staffing scenarios before opening

Test the allocation of responsibilities against practical examples. What happens if the manager falls ill, an employee fails a knowledge assessment or the outlet cannot deliver the agreed service because of staff absences? For each scenario, identify the first point of contact, the person responsible and the decision-making process.

If you intend to send your own team to help with the opening, define the purpose of the visit in advance. Demonstrating procedures and advising the local manager are not the same as covering regular shifts. Where your staff will actually carry out work, check the legal basis, responsibilities, costs and workplace safety requirements. Do not treat informal 'staff lending' as an automatic solution.

After testing these scenarios, clarify any responsibilities that remain unclear. In particular, check whether the franchisee can handle a routine absence independently, without the founder having to take over the outlet in person.

Practical takeaway: before launching your first franchise, prepare a staffing responsibilities table and test it against three common problems. The franchisor should safeguard the network's standards, while the franchisee should genuinely manage their own team and meet their obligations as an employer.