Ill fortune: handling serious illness in a franchise network

When any key player in a business falls seriously ill, its certainly cause for some sleepless nights. But when it’s a franchisee who is in a bad way, it can potentially threaten the health of the entire network. That’s why making sure there are certain provisions in place to support the franchise through this difficult time is absolutely vital.

Obviously the relationship between a franchisee and franchisor is not the same as that of an employee and employer. “Frankly the franchisor has no obligation to look after somebody’s business for them,” says Andrea Loasby, director of Aspray, the property repairs and insurance claims management franchise. This drives straight to the heart of the argument that surrounds dealing with sickness in franchisees – as business owners, franchisees have a responsibility to manage their own affairs and may not appreciate excessive interference from a franchisor. “Franchisees should already have the facilities to deal with illness and sickness – whether it be short-term, medium-term or long-term,” Loasby says. “The onus is on them.”

However, Dave Lister, FD of X-Press Legal Services, urges caution; whilst it might be tempting to think you can simply wash your hands and disregard a franchisee’s problems, this would be a rather short-sighted approach. It may be a franchisee’s obligation to make provisions in case of long-term health problems but if they fall ill and a location’s performance begins to suffer, they won’t be the only ones that are hit in the pocket. “Apart from the disaster that’s unfolding in front of you, you have to worry about upholding your brand,” he says. “What you don’t want is for the brand to have a bad name because the service was not up to scratch.”

Striking the balance between respecting a franchisee’s autonomy and providing the support required to keep the network in shape can be a tricky tightrope to walk. But appropriate planning can help ameliorate the worst of this. “Every business owner should have a business continuity plan,” says Loasby. Essentially this will entail the creation of a plan B that will detail how a franchisee will keep the business running if they are incapacitated. “What’s the back up? What’s the succession plan?” she asks. “Business continuity planning should form the basis of the due diligence and the considerations made when setting up a business.”

One of the most important provisions will be arranging who will manage the business in the interim. “You would expect there to be cover in place,” says Loasby. “Possibly a deputy manager would step up to the mark on a temporary basis.” Subject to the agreements they have entered into, the franchisee may be able to choose who they would like to manage their territory should they be taken ill. “But you would also expect a franchisor to be kept informed of what’s happening because they would want to make sure that whoever was covering is entirely suitable to run that operation,” Loasby adds.