If you’re a franchisee, franchise owner, or an entrepreneur considering opening a franchise, working with a qualified payroll provider can empower your business to shift focus to what matters most: long-term growth, business success, time & cost savings, and employee satisfaction.
While a third-party payroll provider can help you quickly automate and simplify payroll, a manual, in-house process often leads to miscalculations, late payments, employee retention issues, inaccurate tax payments, compliance headaches, and other avoidable issues.
Understandably, most franchisees have questions about how to avoid these problems, how payroll for franchises should work, and how a franchise payroll provider can support business growth. Here, we’ll explore how payroll works for franchises and how you can enjoy lasting peace of mind about essential HR processes with the support of a qualified payroll provider.
As a franchisee and business owner, you are typically obligated to manage payroll, including employee payment and a host of other payroll, time tracking, tax, and compliance-related responsibilities. Although a franchisor may require that your franchise abides by general system standards, in the area of day-to-day operations, your franchise is considered an independent business.
Each franchise agreement outlines the degree to which a franchisor provides operational support, but often this excludes payroll operations, unless you are considered a joint employer – a less common situation. In this case, your responsibilities may be lessened and/or liability for any FLSA violations may be shared in the event of a compliance or payroll error.
In the majority of situations, it’s important for a franchisee to not only utilize payroll software, but to work with a provider that can seamlessly integrate payroll with other related HR processes like time & attendance, workforce management, benefits administration, and more. In the next section, we’ll explore the numerous steps required to manually run payroll in-house as a franchise, and the benefits of working with a payroll provider to simplify the process.
Running payroll in-house using a manual process, or with a range of disparate digital tools, can lead to inaccuracies, late payments, issues with employee retention, unintended compliance violations, or simply a lack of focus on key business tasks and long-term business growth. Here are the steps necessary to start running franchise payroll.
To calculate any employee’s net or take-home pay, you must first calculate gross pay (including cash and non-cash tips) and then subtract any exemptions or deductions from local, state, or federal taxes, as well as Social Security, benefits contributions, and more.
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Although it’s possible to handle payroll tasks using a manual, in-house process, it is almost always more expensive, time-consuming, and error-prone than working with a qualified payroll provider. Investing in a payroll service solution not only automates and delegates payroll and related HR tasks, but allows your business to focus on your business’ most pressing concerns.
As a franchise owner or entrepreneur, it’s essential to choose the right payroll provider for your business: one that can offer expert support, leading-edge technology, and HR integration features that streamline and simplify payroll. Here are some of the key factors you should consider:
Although franchises can attempt to handle HR responsibilities in-house, many outsource HR processes to third-party providers to utilize automated software, receive expert support, and easily integrate payroll with other HR functions like time & attendance, workforce management, onboarding, and more. In general, working with a qualified provider is more cost-effective, employee-friendly, and compliance-friendly in the long term, empowering franchises to prioritize revenue growth, employee satisfaction, and other key business concerns.
In the vast majority of cases, the franchisee is responsible for managing payroll and other related HR processes based on what is best for day-to-day operations and the workforce at their location. The only exception is if a joint employment relationship is in place, in which case the franchisor may be responsible partially or entirely for payroll and partially liable in the event of a noncompliance issue.
An ideal payroll provider should be able to help you automate and streamline your payroll process (including payroll taxes, compliance, and by offering an intuitive, user-friendly portal). Additionally, your payroll provider should offer easy integration between your payroll process/platform and other related HR functions like time tracking, workforce management, and more. You should also consider how the provider addresses customer service and security: whether you are offered a dedicated specialist and advanced security measures, or a call center and minimal protection against fraud or data breaches.
Managing payroll and related HR processes in-house is a demanding task, especially when you’re focused on revenue growth, employee satisfaction, and the long-term success of your business.
Ready to streamline your franchise payroll process to experience lasting peace of mind about payroll, taxes, compliance, and other HR concerns? Contact CAVU HCM today for a personalized consultation and discover how our expertise in serving franchises can help your business thrive.