Training: The Double-Edged Sword of Franchising

Here’s the new article by Davide D’Andrea Ricchi in the April issue of Millionaire magazine, pages 152, 153, 154: “Training: The Double-Edged Sword of Franchising.” Below is its content.

“Lately, more and more clients have asked me for advice on how to set up a crucial element of the franchising agreement: training. Often, this is an aspect taken for granted, a formality arising from the awareness that learning a method or mastering a business model is necessary for replication. Nothing could be truer. The transfer of know-how, crystallized in the operations manual, must necessarily pass through a period of direct training. This period can last a day or even a month, depending on the complexity of the model, but it cannot and should not be neglected or, worse, underestimated. I’ll recall here how training is provided for in a franchising contract worthy of the name and serves to protect both the franchisor and the franchisee. Knowing how to organize training and how to transfer all the “secrets” of our model into practice can determine the success or failure of the affiliated point and, in the worst-case scenario, can be challenged by the franchisee and become the subject (or leverage) of litigation.

In a normal affiliation relationship, training is divided into two moments: that provided during setup and that continuous.

1. Training during Setup

Before the store opens to the public, the franchisor should provide training to the affiliate following the delivery of the operations manual. This training includes a theoretical path, but above all, practical training directly in the field (on the job), usually in two separate moments. In this preliminary phase, the franchisor and the franchisee must pay attention to the following aspects:

• Definition of duration (hours and days). This clarification is not trivial. Defining the duration of the training period must be studied upstream and must be sufficient to transfer the know-how to a degree that allows the affiliate to manage the business following the indications of the Parent Company. Presumably, the more complex a business model is or employs unique procedures (e.g., patented recipes, highly technological equipment, sales techniques, etc.), the more time will be needed for training. It’s not about considering the affiliate a “dimwit” incapable of understanding what is being discussed, but rather about predicting a longer period of on-the-job experience – which may vary according to the complexity of the business model – in order to make them proficient and ensure secure management of the processes.
• Definition of the didactic plan: the franchisor and the franchisee must preliminarily know the subject of the training. This didactic plan must be studied and rationalized by the Parent Company and then communicated to the affiliate before the training begins. It is not essential to specify the days on which a topic will be covered over another, but at least the entire training itinerary must be clear, ensuring that nothing is omitted (usually the franchisee – with a plan in hand – is well aware of what is missing from their training). Recommendation: a didactic plan conceptually mirrors what is outlined in the Operations Manual.
• Training on the job: the heart of training lies in fieldwork at one of the Parent Company’s stores. DO / LEARN / PERFECT. The affiliate is treated as a true apprentice, and usually, if they have no experience in the merchandise sector covered by the business model, they must be trained in every aspect of managing the store (yes, even how to collect and dispose of trash). Training in the best cases begins initially at the headquarters of the PARENT COMPANY, then moves to the affiliate’s location with closed-door sessions, and concludes in the first days of the store’s opening to the public.

2. Continuous Training

Throughout the duration of the franchising contract, continuous training of the affiliate is usually provided. What does this mean? It goes without saying that it does not mean going over the topics covered during the setup training, but rather the constant updating of the network on the innovations and improvements that the Parent Company will have (hopefully) made to its business model. Below are some suggestions and indications to best define this crucial aspect of the relationship between franchisor and franchisee:

• Subject of the training: from the franchising contract, the subject of continuous training should be specified. This subject can obviously include more than one aspect of management, from updating the product/service list to the inclusion of new customer care criteria. In this case, training is seen as continuous updating for the affiliate and allows for maintaining an active relationship with them.
• Mode of delivery:on this point, schools of thought can diverge. In-person training is sometimes essential, but it is nevertheless costly for both the franchisor and the franchisee as it takes time away from business management. It is suggested to use remote communication channels such as Skype calls, webinars, podcasts, and distance meetings. In this way, time and costs are optimized to a certain extent.

  Focus groups or assessments: Directed at a limited group of people followed by an experienced trainer, the purpose of these is to develop specific skills to manage new situations or solve specific problems.

• Company meetings: It is advisable to organize a meeting with all the affiliates in the network at least once a year to update them on the network’s health and upcoming or ongoing innovations. This involves organizing an update meeting in every aspect that requires fewer resources than a face-to-face meeting organized specifically for each affiliate and can easily be transformed into a moment of sharing, emotional participation, and, therefore, aggregation.

These are the crucial aspects and tips that I feel like sharing this month regarding training. Obviously, every business model, although similar, will never be identical to another, and consequently, it will be the franchisor’s task, along with consultants, to define the fixed points of training. The important thing is to always keep in mind what the physicist Georg Christoph Lichtenberg said, “Everything needs to be learned, not to be shown off, but to be used”.