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Posted on Feb 11, 2011

5 Rules to Follow Before Entering a Franchisor's Initial Training Program

Franchisor initial training programs are required to be explained in the Franchise Disclosure Document (FDD), but there is wide variance as to what is normally disclosed.  Prospective franchisees should be clear about the requirements of the entire initial training program through a careful examination of item 11 FDD disclosures, asking the franchisor questions related to the initial training program, and asking other recent franchisees who have completed the initial training process. The time to investigate is not after you have signed your franchise agreement and paid your non-refundable franchisee fee!

Here are 5 Rules to Follow Before Entering a Franchisor's Initial Training Program

1. The More Detail The Better

For the prospective franchisee evaluating the franchise opportunity, the more detail the better.  You need to know what you will be doing before, during, and after attendance at the in-person franchisee training program; what requirements the franchisor deems necessary to open your doors or start your franchise; and the timeframe that all these various requirements have to be completed. All this information is found in Item 11 of the FDD.

2. Find a Rigorous Training Program

You should want a rigorous overall initial training program that prepares you to open successfully. Most franchisors brake down the initial training program in three major parts: Pre- training, in-person training, and post in-person training.

Pre-Training. Pre-training programs usually mandate the newly-minted franchisee to engage in self-study materials and practical training such as observing or even working in a franchised or company-owned unit of the franchise system. Even if the franchisor has no practical pre-training requirement, it is in your best interest to have hands-on experience prior to attending in-person initial training. Doing so will more likely result in a positive showing for you at the in-
person training and accelerate your ability to move through the various requirements to open the franchise.

In-Person Training. A franchisor’s official in-person training program typically takes place at the franchisor’s headquarters. You will pay the cost of travel and lodging but typically the franchisor has arranged at least some discounts for lodging. Experienced trainers and experienced operational staff of the franchisor usually comprise the training teams of the in-person franchisee training programs. It is also not unusual for the CEO or other high level
executives of the franchise brand to provide a welcome to the training class or even lead a segment of the in-person training program.

Post In -Person Training. Following the in-person training, franchisors will typically have a full-range of post in-person training requirements that are necessary to complete before commencing franchise operations. Again, these requirements must be stated in Item 11 of the FDD, and they usually involve more practical training. At this stage in the training process franchisor support involves on-site or location assistance before business opens. They also involve more business related requirements such as franchisor approval of the site, business license requirements, marketing and business plan completion, confirmation of computer specifications, and more self-study materials.

Franchisors that are committed to on-site training following in-person training is always a good sign and even better are the franchise systems that have franchisor operations staff shadow a new franchisee in the first few weeks of opening. This type of support following the in-person training is always a strong sign that the franchisor is committed to your success.

3. Evaluate Trainers Experience

Item 11 of the FDD requires the franchisor to state the experience level of the trainers. You should look for an experienced training staff within the industry of the franchised business and trainers that have hands-on experience with the subject matter. It is always a good sign that the majority of trainers actually have experience operating the franchise business themselves at some time in their careers so there is a practical, ground roots orientation to the training program.

4. Know the Pass Rate of Franchisees Going Through The Training Program

Franchisor training staff will evaluate your performance through the entire initial training program. Usually the criteria are known to the franchisee but there is always some element of subjectivity in the evaluation process. There is also a natural incentive for you to do well in the initial training program-you will already have paid what is usually a non-refundable franchisee fee to your franchisor.

More likely than not, if you have done everything the franchisor requires of you to open as stated in the FDD, and have demonstrated a solid set of professional behaviors throughout the initial training period, you are likely to be allowed to “pass the gate” into the franchise system. In the case where your overall evaluation is deemed not acceptable, many franchisors provide other options besides ultimate loss of the franchise license. They include repeating specific segments that were not deemed acceptable, more practical training or attending the entire initial training period again for further evaluation.

Of course there are instances where the trainee is simply not accepted into the system without further recourse. This is rare but the franchisor has this option to do so in its own discretion. It is therefore wise for a prospective franchisee to ask the franchisor what is the pass rate of its trainees that go on to open.

5. Call Franchisees In the System

One of most important general due diligence items in evaluating a potential franchisor is to call a fair sampling of existing and former franchisees of the franchise system. This information is found in the franchisor’s FDD. In evaluating the initial training program, you will want to ask franchisees who are newer to the system, as they have recently gone through and successfully passed the franchisor’s initial training program. You should find out “dos” and don’ts” from the people who went through it.

Careful examination of the franchisor’s initial training program in the disclosure and validation stage of the franchise opportunity will enable you better evaluate the overall offering and lead to a much clearer path to opening if you decide to go forward with the franchise opportunity in consideration.

Deven Klein has 16 years experience working for a large, international franchior, first leading its legal department and then its franchise development department.

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