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Franchisors and franchisees should not ignore the importance of supporting mental ill health

Written by Hollie Ryan, Nicola Broadhurst on Wednesday, 27 November 2019. Posted in People

Franchisors and franchisees should not ignore the importance of supporting mental ill health

Franchisors and franchisees should not ignore the importance of supporting mental ill health

Franchisors and franchisees should not ignore the importance of supporting mental ill health

Although conversations around mental health are becoming more commonplace, it remains a taboo subject in the workplace, with many still feeling unable to disclose to their managers that they are unwell. This has to change and, more importantly, franchisors (and indeed all business owners) cannot afford to overlook the financial and wider adverse impact that mental health can have on their business. 

The ‘cost’ of mental ill health

The statistics are pretty compelling – earlier this month the Office of National Statistics published a report on sickness absence in the UK, which showed that in 2018 the equivalent of 17.5 million days were lost due to mental ill health, and mental health conditions accounted for one of the four most common reasons for absence.

This will no doubt have an impact on cost but franchisors should not overlook the less tangible effects of poor mental health – it can affect retention, productivity and even morale. ‘Presenteeism’ is also a risk as individuals continue to attend work even though their mental health is affecting their ability to do their job properly. In more extreme cases, employees or franchisees may decide to leave the business or disappear for prolonged periods without sign off, leaving the business vulnerable. 

A happier, healthier workforce is more likely to benefit from increased performance, motivation and retention, and be a better advertisement for the brand as a whole. Promoting wellbeing and supporting franchisees and their employees can lead to greater commitment and a more pleasant working environment. The importance of investing in wellbeing should not be overlooked.

Franchisee wellbeing

Franchisors should take a proactive approach to mental health and be alive to the difficulties that franchisees can face, particularly in their first few years. To implement effective strategies to help detect and assist franchisees suffering with stress, ensuring that they are aware of any support that is available can be extremely helpful. 

Most franchise agreements contain standardised provisions dealing with what happens to the business in the event of the death of the franchisee or key shareholder (where the franchisee is a company). Some (but not all) also include provisions to deal with the incapacity of the franchisee, allowing a period of time after which the franchisor can require the business to be sold or can terminate. In the interim, the franchisor should have the power to appoint a manager. However, these clauses tend to be drafted by lawyers following an industry standard without much detailed analysis as to whether this is suitable in practice. For example, how long is too long, to wait to take action if the franchisee is mentally incapacitated? What is the definition of an incapacity that triggers the provisions? Is a franchisor resourced sufficiently to even appoint a manager? Is there anyone (a relative or adviser to the franchisor) who has the legal authority to make decisions on behalf of the franchisee. This latter issue is particularly important. In the absence of a suitable power of attorney, and where a franchisee lacks the mental capacity to agree a sale or make further decisions a franchisor may have little option but to wait out any contractual time period that applies before it can terminate the business.

This is an area of the franchise agreement that is often overlooked but could do with an overhaul. Arguably it should be a prerequisite of any grant of a franchise that a franchisee has appropriate powers of attorney in place ‘just in case’.

What more can be done?

A mental health policy can go some way to ensuring that franchisors and franchisees have the appropriate support in place for their respective employees. 

The policy should outline the organisation’s aims, and encourage a supportive culture in which employees feel able to discuss mental ill health openly and without fear of reprisal. The policy should set effective lines of communication and outline the support that is available.   

Policies should be supported by training so that employees are aware of the support available and how to access it. Manager-specific training can help them to identify warning signs and implement appropriate measures to support the individual. A mental health first aider can be appointed so that there is a trained individual on hand to listen and appropriately support employees.

Franchisees should receive sufficient legal support as mental ill health can be classed as a disability, which protects the individual from discrimination and imposes a duty on employers to make reasonable adjustments. 

Whilst there is a cost associated with implementing wellbeing programmes, it can be shared amongst the franchisees or by providing training that can be cascaded across its network. As we enter a new decade, franchisors and franchisees should assess how they can implement the above and better support mental health.

About the Author

Hollie Ryan

Hollie Ryan

Senior Associate at Stevens & Bolton LLP.
Nicola Broadhurst

Nicola Broadhurst

Partner at Stevens & Bolton LLP.

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