{"id":2522,"date":"2022-07-21T18:47:37","date_gmt":"2022-07-21T18:47:37","guid":{"rendered":"https:\/\/www.franchiseopportunities.com\/blog\/?p=2522"},"modified":"2022-08-12T21:22:58","modified_gmt":"2022-08-12T21:22:58","slug":"handles-payroll-franchise","status":"publish","type":"post","link":"https:\/\/www.franchiseopportunities.com\/blog\/general-franchise-information\/handles-payroll-franchise","title":{"rendered":"Who Handles Payroll in a Franchise?"},"content":{"rendered":"\r\n

A successful franchise<\/a> depends upon its employees. But who do they depend on for their paychecks? While you\u2019re learning how to start a franchise<\/a>, pay close attention to who handles your payroll. This guide will walk you through some of the payroll issues you\u2019ll need to consider when hiring for your franchise<\/a>.<\/p>\r\n\r\n\r\n\r\n

In some cases, the franchisor will pay all company employees, but in most cases, this responsibility rests on the shoulders of the franchisee.\u00a0<\/p>\r\n\r\n\r\n\r\n

Check the Franchise Agreement<\/strong><\/p>\r\n\r\n\r\n\r\n

In some cases, franchisees and franchisors are considered joint employers, but this is relatively rare. In most cases, franchisees are considered to be a separate business entity from the franchisor.\u00a0<\/p>\r\n\r\n\r\n\r\n

The franchise agreement serves to define the relationship between you, the franchisee, and the franchising company. This document doesn\u2019t explain how to start a franchise, per se, but it does clarify what your responsibilities are and what the franchisor provides in return.\u00a0<\/p>\r\n\r\n\r\n\r\n

Specifically, the franchise agreement will explain who will handle the payroll for your franchise. This can either be the franchisor or the franchisee, though it\u2019s most common for the franchisee to be responsible for their own payroll.\u00a0<\/p>\r\n\r\n\r\n\r\n

Additionally, your franchisor may have specific guidelines for how to structure your budget. These guidelines mean that you\u2019ll know how much money to allocate for things like equipment, insurance, royalties, etc., and this also means you\u2019ll have a designated portion that you can devote to payroll.<\/p>\r\n\r\n\r\n\r\n

Responsibilities of the Franchisee<\/strong><\/p>\r\n\r\n\r\n\r\n

Regardless of who actually handles the payroll for your franchise, the franchisee will still be responsible for managing the bulk of the process. This work includes the interview process when hiring for your franchise, as well as recording data that relates directly to employee compensation.\u00a0<\/p>\r\n\r\n\r\n\r\n

Since most franchise workers are hourly-wage employees, this responsibility primarily means overseeing a time management system so that you can stay on top of how many labor hours your franchise utilizes in a given time period.\u00a0<\/p>\r\n\r\n\r\n\r\n

Again, your franchisor may have certain benchmarks and limits to guide you, but it\u2019s the franchisee\u2019s responsibility to oversee the process at the local level.<\/p>\r\n\r\n\r\n\r\n

Methods of Payment\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n

Franchisees will also need to facilitate the exact method of payment. Employees can be paid in one of three ways:\u00a0<\/p>\r\n\r\n\r\n\r\n