The Franchise King®

Attention Franchisees; Don’t Worry About Payroll

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One of the first questions that I’m asked by prospective franchise owners that I’m working with has to do with two things; employees and payroll.

Joel, I’ve managed employees before, but I’ve never had to worry about things like payroll taxes, and payroll processing. Is that handled by the franchisor? ”

The answer is, “some of the time.” It just depends.

Some franchisors have complete payroll systems, including software and support for their local franchisees. Some don’t. Either way, don’t let the fact that you may not know a lot about how a payroll system is supposed to work stop you from investigating opportunities in franchise ownership. Lots of things that are involved in owning a business are going to be foreign to you at first. One of the great things about investing in a franchise-type of business is that just about everything that you’ll ever have to do as an owner has been well thought out…and is part of a system. That’s what you’re buying.

If you end up buying a franchise that has a payroll provider included as part of your franchise agreement, it can certainly help. As a franchisee, you’ll want all the help and support you can get. You’re going to want to spend your time in front of customers and clients, which tends to lead to more cash register ringing. You don’t want any unnecessary back office duties to chip away at that time. After all, the more opportunities you have to interact with your customers, the better your chances will be to succeed as a small business owner.

Paychex is a popular payroll system provider in the world of franchising. They’re large enough to provide franchisors with comprehensive payroll services. And they do. Actually, they do even more than payroll.

In addition to helping franchisors manage things at headquarters, Paychex also helps things go smoothly at the franchisee level…your level, with their specially-trained local Payroll Specialists.

In business since 1971, Paychex has its roots in Rochester, New York. Interestingly enough, Paychex expanded beyond Rochester in few short years, and for awhile, even included 18 franchises and partnerships. They ended up consolidating into one company operation, and have been that way ever since. Do you think they understand the needs of the franchise community?

This NASDAQ traded public company has won hundreds of awards over the years, including;


  • “100 Best Companies to Work For,” FORTUNE magazine.
  • Ranked among the top 30 on Training magazine’s list of Top 125 training organizations in the country, Training magazine.
  • “America’s Most Admired Companies,” FORTUNE magazine.
  • The American Institute of Certified Public Accountants (AICPA) Business Solutions Program selected Paychex as its preferred payroll provider.



3 Things


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According to Paychex, there are 3 things that franchisors should look for in a payroll services provider.


They are;


1. Local Representation

Franchisors can’t be everywhere at once. If they’re headquartered in Chicago, they need to know that their franchisees in California are being well taken care of. That’s why it’s important for their payroll provider to have Local Specialists available.


2. High Ethical Standards

Franchisors need to feel that their information is protected. The Paychex IT system uses state-of-the-art security to ensure the secure storage and transmittal of information. Paychex is financially secure, has passed IRS testing requirements, and maintains protection, including a fidelity bond and insurance. And, they’re publically audited.


3. Financial Disclosure

Business transparency is big these days, and your payroll services provider should provide full financial disclosure. You can view Paychex financial information anytime through their investor presentation, annual reports and proxy statements, and SEC Filings. It’s about trust, and in Fiscal 2010, Paychex clients trusted them with 354 billion payroll dollars. In addition, the Ethisphere® Institute named Paychex one of “The World’s Most Ethical Companies.”


Finally, if you’re looking into franchise ownership, and the franchises you’re interested in don’t have a payroll system in place, you can call a payroll services provider like Paychex, and have them provide the services you need to manage your payroll, directly.

So you can ring your cash register.

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franchise article written by joel libava
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joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes.
For 23 years, I’ve been showing people how to make smart, informed decisions on franchises to buy, and I can help you, too!
P.S. I'm not a franchise consultant/broker.

Joel is Highly Principled
There are many people in the franchise business who claim to to be experts in the field. Unfortunately many of them lack both knowledge and integrity. Joel, however, is without question one of the most qualified and principled people I know, in or out of his industry."
- Greg Reynolds, Retired Outplacement Counselor
"Many receive advice, only the wise profit from it."
- Harper Lee

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