How Franchises Can Attract and Retain Talent

by | Oct 12, 2022 | Blog, For Franchisees

Business owners, franchisors, and franchisees are operating amid a labor market unlike any other in recent history. 

Prior to 2020, technology and digital capabilities were already enabling (and challenging) employees to think about work differently. Then, the COVID-19 pandemic forced action: First employers had to begin furloughs and layoffs, which was later followed by a “great resignation” and other labor trends like the “great reset,” and the silent rebellion characterized by “quiet quitting.”  

But there are no sure things in business. Whether you are considering franchising your business or are a franchisee considering opening or expanding units, a look at data and patterns in labor markets will help inform you on what it takes to attract and retain talent in an era of unprecedented employee empowerment. 

Market Data Should Inspire Cautious Optimism

The good news is that the International Franchise Association (IFA) projected continued growth for the industry in 2022 and onward. In its 2022 Franchising Economic Outlook, IFA estimated 8.8% positive growth from 2020 to 2021, and an additional 3.1% employment gain, which would tally nearly 8.5 million franchise workers in the U.S. and signal a net gain of 257,000 jobs. New York’s data is commensurate with the U.S., as it is projected to have 29,582 franchise establishments by the end of this year, which is only 500 fewer than there were in 2019. 

The imbalance between the supply and demand of talented workers continues to be a thorn in the sides of employers, regardless of their industry or sector. That was certainly the case in 2021, the U.S. Federal Reserve noted in an installment of its “Beige Book.” 

According to the 2021 report, “The lack of job candidates prevented some firms from increasing output and, less commonly, led some businesses to reduce their hours of operation. Overall, wage growth was moderate, and a growing number of firms offered to sign bonuses and increased starting wages to attract and retain workers.” Looking forward, the Fed said, “…labor demand will remain strong, but supply constrained, in the months ahead.”

Fast forward to the September 2022 chapter in the “Beige Book” – though the economy is slowly rebounding, not a whole lot has changed. With a focus on New York’s market, the Fed noted that in 2022, “economic activity contracted modestly, with supply disruptions easing somewhat,” and that “employment increased modestly despite ongoing worker shortages.”  

The talent shortage is clearly impacting franchises. Workers are more inclined to take risks on themselves in a market that is bolstered by advanced technology and remote capabilities. Employees and job seekers are certainly aware of their advantage in the market and your willingness to accommodate them could make all the difference in the quantity and quality of your staff. 

Attraction and Retention Strategies in Franchising

Low wages are a core problem for any franchise stakeholder. Ask yourself honestly – is it that you cannot find qualified workers, or can you not attract qualified workers at the rate you want to pay? 

You may have to pay a more competitive rate in order to find the right talent from the outset. Though increased wages are a start, throwing money at the issue may only get you so far. Assuming that most franchises need their employees to be onsite to serve customers or travel to a client’s workplace, other perks need to be considered. 

In the effort to attract and retain talent, consider revisiting your policy on transportation and dependent care. suggests offering reimbursement programs for employees and incentives for those who might even purchase bicycles. 

Establishing Dependent Care Flexible Spending accounts can allow workers to contribute up to $5,000 per year tax-free. Entrepreneur was quick to note the incentive for franchise owners – whether through contributing to the employee’s plan or by even creating daycare facilities. The latter idea may not be feasible for most franchisees, but corporate-owned locations (like a business chain) or large-scale franchisees might consider daycare options if they operate several locations in a territory.  

Another way to fill vacant positions is to find ways to shorten the hiring process. It is very likely that an applicant at your restaurant franchise is applying at a competitive restaurant nearby. Do your due diligence regarding background checks and references – but do it quickly. Partnering with an employment agency will help streamline this process for you so that you can focus on training. 

Job seekers and employees hold more cards (yielding better hands) than ever before, which is why franchise owners cannot simply ride the projected economic rebound. Talent attraction and retention must be woven into your strategies so that your business can be adequately staffed and functional in a tight labor market. 

We Can Help

Lusthaus Law P.C. has a proven record of assisting franchisors and franchisees at every stage of development. We are committed to our client’s success and keep our finger on the pulse of the industry to ensure that we provide the best and most up-to-date franchise law counsel.

Contact us today to learn more about how Lusthaus Law P.C. can help you navigate a clear path towards your franchise’s successful future.


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