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The Training Program Table: Counting the Hours a Franchisor Actually Owes You

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CategoryBuying a Franchise
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Read Time7 MIN
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Item 11 is the longest item in most disclosure documents and the one candidates read most charitably. It shows up after the fee tables have done their damage, it describes site help and marketing and a training program with a name and a curriculum, and by then most buyers are ready to be reassured. The item is not built to reassure anyone. It exists to fence off precisely what the franchisor has agreed to do for you, and the training table sitting in the middle of it is the only place in the entire document where that promise is stated as a number you can add up.

The sentence the item has to open with

Before any of the assistance gets described, the rule makes the franchisor print a warning in bold type: except as listed below, the franchisor is not required to provide you with any assistance. That line is not the franchisor being modest. The FTC's own compliance guide explains that the prescribed statement is there to counter contrary claims and to dispel the idea that some floor of support comes built into a franchise offer. Nothing is inherent. Whatever appears under that sentence is the whole of it.

Two structural rules make the item unusually checkable. Every assistance obligation disclosed in Item 11 has to carry a citation to the specific section number of the franchise agreement that imposes it, which turns the item into an index you can follow back into the contract line by line. And since July 1, 2008, every franchisor has had to use the amended Rule's format, so the item lands in the same shape across brands and the tables can be set side by side. Both facts are laid out in the FTC's Franchise Rule Compliance Guide from May 2008.

Four columns, and the arithmetic nobody does

The training summary has to appear in a table headed TRAINING PROGRAM in bold capitals, and the rule fixes its four columns: the subject taught, the hours of classroom training on that subject, the hours of on-the-job training, and the location (16 CFR § 436.5(k)). Everything else about training gets written in prose underneath. The table is the part that commits.

So do the arithmetic the sales conversation never does. Total the classroom column, total the on-the-job column, and keep them apart, because they are not the same product. Ranges are ordinary in these tables — twenty to thirty hours, three to five days — and the honest way to read a range is to treat the bottom of it as the commitment and the top as a hope. Then look down the location column and notice who is traveling. Classroom hours at a corporate headquarters are hours you spend away from a business that is either not open yet or being run by someone else. On-the-job hours at your own franchised location are a different animal: that is the opening crew standing in your store during the week you launch, which is real help and is also the week the franchisor is watching how you operate.

One more thing the columns do not tell you: the hours are attached to subjects, not to people. A table showing forty classroom hours in operations does not mean forty hours for each person you send. Who those hours are for is a question the prose beneath the table is supposed to answer.

Diagram splitting the training commitment into two columns. On the left, the hours the Item 11 table actually counts: classroom hours by subject, on-the-job hours, and the training location. On the right, the hours the table never counts, including wages for the staff you send, travel and lodging, coverage for the shifts they miss, and retraining a replacement manager later. The hours in the table, and the hours around it COUNTED IN THE TABLE classroom hours, listed by subject on-the-job hours, listed by subject location of each block of hours PAID FOR BY YOU, COUNTED NOWHERE wages for everyone you send travel, lodging, and meals coverage for the shifts they miss retraining the manager who quits the line read ranges at the bottom number, not the top one the left column is a contract term; the right column is a budget line only you will build
Fig. 1 — The table measures the franchisor's delivery obligation. The cost of getting your people into those seats, and of doing it again when someone leaves, sits entirely on your side of the ledger.

The prose underneath does the real work

The rule pushes a specific list of questions into the paragraphs that follow the table, and each answer has a consequence you can plan around. Who may attend, and who must. Whether completion has to be successful, and to whose satisfaction. What the training costs, if anything. Who pays travel and living expenses. Whether refresher or additional training can be required later.

Take the attendance and completion answers together, because they set your opening date. If a principal must personally complete a program held on a fixed monthly calendar, and your manager has to finish a separate program before the doors open, then your launch is bounded by class schedules you do not control. Ask when the next three sessions run before you sign anything with a deadline in it.

The charges answer usually has a second half worth chasing. Initial training is often free for a stated number of attendees, with a per-person fee for anyone beyond that group or anyone you send later. That later fee is the one that matters, because turnover among the people you trained is not a hypothetical.

Buyer's Note Read Item 11 with Items 5, 6, and 7 open beside it. Every training-related cost the item hands to you should appear somewhere in the estimated initial investment or the ongoing fee table. If Item 11 says you pay travel and living expenses for two people for two weeks and Item 7 has no line that could plausibly hold it, you have found a real number that was left for you to discover after closing.

Who is standing at the front of the room

Item 11 also has to say something about the people delivering the training: the nature of the instructional materials, and the instructor's length of experience both in the field and with the franchisor. That second figure is the interesting one. Twenty years in the trade and five months with the brand is a different disclosure from twenty years in the trade and twelve with the brand, and the gap tells you whether the system trains from institutional memory or from a recent hire's outside experience.

The compliance guide allows a franchisor with a large or frequently changing training staff to give a general description instead of naming individuals, which is reasonable and also convenient. When you get a general description, ask directly: who will teach my sessions, how long have they been with the system, and how many franchisees have they trained. A franchisor should also disclose the corporate officer in charge of training if that person was not already covered in Item 2, so a named officer with a thin franchise tenure is worth noticing.

The support that is offered but not owed

Some franchisors describe help they provide without being contractually bound to provide it. The rule permits that, on the condition that the optional assistance is set out separately and clearly identified as not required by the franchise agreement. That formatting requirement hands you a free diagnostic: look at how much of the item sits under the required heading and how much sits in the optional paragraph. A short required list beside a generous optional one describes a system that will help you enthusiastically for as long as it feels like it.

Then use the section citations, since they are printed for exactly this purpose. Pull the franchise agreement paragraph named beside each obligation and read it against the summary. Item 11 is the franchisor's description of its own contract, and the contract is the part that governs.

What to do with the hours before you sign

Start with the addition, because it takes ten minutes and almost nobody does it. Write down the total classroom hours at the low end of every range, the total on-the-job hours the same way, where each block happens, and who has to be in the room. That single paragraph is the training program as a contract, stripped of the brochure.

Then build the second column yourself. Price the wages, travel, and lodging for everyone you must send, add the cost of covering their shifts if you are buying an operating unit, and add the fee for retraining one replacement manager in year two. Put that number next to Item 7's estimate and see whether the estimate absorbed it.

Finish with two calls. Ask franchisees who opened in the last eighteen months how many weeks passed before they could run a shift without phoning someone, and ask what the system did when a trained manager quit. The answers calibrate the hours in the table against the hours the business actually took. Bring the item and the cited paragraphs to a franchise attorney, and bring the cost column to your accountant, because the training program is one of the few promises in a disclosure document specific enough to hold a franchisor to, provided you counted it before you signed.

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