Franchise system success is based on various factors. Continuous improvement based on effective training is one component of franchise success.
Franchise Training from a Franchisee's Perspective
Most Franchise Agreements contain provisions which deal with:
- initial franchisee training - to introduce the Franchisee to the general operational requirements of the Franchise Business; and
- ongoing training - to ensure the Franchisee is educated in new franchise system processes or changes to the product or service range, and otherwise for continuous improvement.
They may also be linked to other documents related to the training of franchisees, such as, a Procedure Manual or Training Manual.
From an intending Franchisee's perspective, it is important that they check these training requirements, which may also include details related to:
- the type of training methods being offered by the Franchisor;
- where and how training will be carried (eg. if at a physical location or on-line);
- the duration of training;
- costs associated with the training.
Sound Franchisee training programs help to:
- create skilled and successful Franchisees; and
- attract other Franchisees to the franchise network.
Did you know?
Many Franchise Agreements contain provisions which:
- state that it is a mandatory requirement for the grant of a Franchise that initial training and ongoing training, to a minimum standard, must be completed by the Franchisee;
- provide afailure to meet such minimum training criteria may result in the Franchise Agreement being terminated.
Before entering into a Franchise Agreement, it is important prospective Franchisees understand what are the minimum training requirements and the repercussions of not meeting them.
If you are:
intending to buy a Franchise; or
are an existing Franchisee and need assistance understanding your training obligations;
or require your Franchise Agreement to be reviewed
Franchise Training from a Franchisor's Perspective
There are a number of reasons why franchising as a model is attractive as a business vehicle for prospective franchisees. These might include:
- to fulfil an ambition to work for themselves;
- the need for a new challenge;
- wanting to change their career;
- a wish to be part of a team;
- a desire to be associated with a particular brand;
Whatever the reasons, these people all come from a variety of backgrounds, differing skill-sets, experience and education. Some prospective franchisees will, for example, already have:
- managerial skills;
- financial management capability;
- technical ability,
whereas others may not.
As such, it is critical that you develop appropriate training programs that are adaptable to the different franchisees that become part of your franchise network.
Franchise systems also inevitably change over time. This could be due to changes:
- to the products and services associated with the brand;
- related to macro-economic factors;
- arising from the costs of doing business;
- in the statutory and regulatory frameworks;
- in customer needs and wants;
- from new technologies,
This may result in new processes, procedures, programs, and standards for your Franchisees to adopt.
To that extent, it is important that you keep their training fresh and current to ensure Franchisees have the most up-to-date information upon which to operate their Franchised Businesses.
Franchise Training and the Law
There can also be legal implications for Franchisors arising from:
- representations made to prospective Franchisees; and
- the level of training provided to Franchisees.
- if in the pre-contract stage (or negotiation phase) representations are made to prospective Franchisees about the type, quantity, quality or costs of training to be provided by Franchisors, which then induces Franchisees to join the franchise network, and that training does not eventuate or is poorly delivered or it does not match stated costings - it can raise issues such as misleading and deceptive conduct which might give rise to breaches of the Australian Consumer Law under the Competition and Consumer Act 2010;
- if the Franchise Agreement stipulates certain obligations upon Franchisors in regards to Franchisee training and the Franchisor does not meet those obligations, it can raise issues of breach of contract.
Equally, if the laws change there may be an onus on Franchisors to encourage further education of their Franchisees. For instance, as might arise due to the implications of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.
If you are a Franchisor who requires a better understanding of your training obligations or how best to implement your training strategies through your legal documents, contact Greyson Legal for appropriate advice.