Training fee

A training fee is one of the costs to check when working out what a franchise resale will cost in total. The Canadian Franchise Association lists providing initial and ongoing training and support among the franchisor responsibilities that generally apply. Whether a resale buyer must be trained, and who pays, is something to confirm in the agreement and the franchisor’s approval terms; ask for both in writing.

What disclosure rules say

In Ontario, the disclosure document under O. Reg. 581/00 must describe any training or other assistance offered to franchisees by the franchisor or its associate, including whether it is mandatory or optional and, if mandatory, who bears the costs. In Ontario, whether a particular resale needs a disclosure document at all depends on the exemptions in s.5(7) of the Arthur Wishart Act, which include certain grants of a franchise by a franchisee. Other provinces with franchise Acts set their own rules.

What to ask

• Whether training is mandatory for a buyer of an existing location, and who pays for it.
• What the fee covers, and whether travel or time away from the business is extra.
• Whether it is refundable if the franchisor declines the buyer.

The answer on whether a resale requires retraining goes further, and the operations manual may be part of what training covers.