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Sweetening The Pot

Lease Is More

PEOs make life easier for franchisees.

Franchisees have full plates. That's why they're increasingly turning to professional employer organizations (PEOs), leasing employees from them and letting the PEOs handle all the administrative tasks involved with managing employees.

The ServiceMaster Company is encouraging its franchisees to use PEO services through its recently acquired subsidiary, Certified Systems Inc. (CSI). "For a franchisee who only employs a small number of people, it's difficult in today's regulation- and litigation-heavy environment to afford all the information systems, human resources and legal advice it takes to do everything right in the area of employee administration," explains Jerry Mooney of Downers Grove, Illinois-based ServiceMaster. "CSI allows our franchisees to share the overhead structure of a large company."

CSI takes care of workers' compensation and health insurance, benefits plans, payroll and payroll taxes, and human resources needs. Since ServiceMaster began offering the service, more than 150 franchisees have expressed interest.

"Generally, if you can use a PEO and break even, it's a tremendous deal," says Mooney. "But the majority of the time, employee leasing saves small businesses 1 to 3 percent of labor costs, which is all the more significant because you're outsourcing a lot of your headaches, freeing up time to focus on the business."

Contact Source

Certified Systems Inc., (800) 878-3157

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Sweetening The Pot.

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