What Training Should Franchisees Ask for From Franchisors?

Comprehensive and quality training is important for franchisees. Training from your franchisor fosters an environment in which you feel supported and equipped with the tools you need to succeed. It also helps maintain standards across a network so that customers receive the best possible product or service. This is a win/win for franchisors and their franchisees. Training should be emphasised right throughout the franchising relationship, from purchase up until the franchise relationship ends. This article will discuss what kind of training from your franchisor you should receive.

Training From Your Franchisor to Ask for Before Signing the Contract

When you receive a copy of your proposed franchise agreement, you should have a look at what it says about training. The contract should contain terms around both initial and ongoing training.

Initial training from your franchisor occurs before you open up your business to customers. It can take place at the franchisor’s offices or even at the premises of another franchisee. Ideally, you should also ask the franchisor to provide you with on-the-ground training after your franchise opens.

Before signing your franchise agreement, you should also make sure that there are clear obligations on the franchisor to provide you with regular training throughout the term of your franchise. Franchise contracts are often drafted in a way that provides franchisors with significant discretion around how much ongoing training they are required to offer, if any. You should ask to include a requirement that the franchisor must provide you with training if:  

• you ask for it (with some cap on how many training sessions you can reasonably request within a year);
• there are changes in relevant laws (e.g. alcohol licensing for franchises that serve alcohol or new privacy obligations); or
• the franchisor introduces significant changes to operating procedures (e.g. recommended sales techniques for a new product range).

Training on the Franchise System

Each franchise network will have its own systems and processes in place and you should receive training from your franchisor on them. These are the steps that each franchisee must follow in running the business, such as the recipe for a secret sauce or a script for engaging with customers. These processes contribute to what makes the franchise a cohesive network, setting apart its products and services from the rest of the industry.

These processes will vary from network to network and are often addressed in detail in an operations manual. As part of your initial and ongoing training, you should ask your franchisor to include practical information on areas such as how to:

• hire staff (e.g. if you are working in an industry that has apprentices, how to identify and recruit your apprentices);
• order equipment and supplies;
• operate your equipment;
• maintain your equipment and your premises (if you operate from a fixed location);
• use any prescribed software; and
• keep any relevant records.

Employment Obligations

If you employ staff in your franchise, you want to be sure that you understand your obligations as an employer. Underpayment of wages and breaches of workplace laws are topics that have been the subject of heightened scrutiny, both in the media (such as in relation to 7/11) and by the government. Given the renewed emphasis on employment laws in the franchising industry (and the introduction of the Vulnerable Workers laws), you should request training on:

• documents you need to provide to new employees;
• information you need to include on payslips;
• records you need to keep, and for how long;
• the Australian award system and the relevant awards for your industry;
• how to calculate superannuation; and
• what to do if Fair Work Australia audits or investigates your business.

This is an area in which franchisors should be willing to offer targeted training. Providing you with training on employment laws will be in the franchisor’s interests, as changes to the Fair Work Act 2009 (Cth) mean that franchisors can (in certain circumstances) be liable if their franchisees breach workplace laws. To avoid this, franchisors can take steps to ensure franchisees know how to comply with employment laws.

Key Takeaways

Take the time to speak with your franchisor about the expected training from your franchisor before you purchase the business. Make sure this is clearly recorded in your franchise documents. Your franchise agreement will usually include the franchisor’s obligations in relation to initial and ongoing training.

If you need assistance understanding your rights or negotiating clauses around training with your franchisor, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to solicitors to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.