Buying a Franchise: Check the Training Pass Requirements

Training before opening an outlet is not simply an added benefit in a franchise package. If passing the training is a condition of starting to trade, assessment methods and opportunities to resit can affect your readiness to open. Across a franchise network, competency standards help maintain consistent quality. However, prospective franchisees need to ensure that those standards are clear, verifiable and do not create open-ended financial obligations.

1. Distinguish training attendance from proof of competence

The phrase “training included” does not explain what you will achieve. There is a difference between attending classes, completing practical sessions and being judged competent to perform particular tasks. Before buying, ask whether the franchisor simply records attendance or actually tests participants’ abilities.

Request a list of competencies for each role that requires training. In a food business, for example, these might include ingredient storage, consistency of food presentation, equipment hygiene and cashing up. In a service business, assessment may focus more on service procedures, equipment use and complaint handling.

Check the following four points:

• Who must pass: must the owner, manager and all employees pass, or only people in certain roles?
• Assessment format: does assessment involve written tests, simulations, hands-on tasks or a combination of methods?
• Pass criteria: which mistakes can be corrected during training, and which result in a participant failing?
• Record of results: do participants receive an assessment record and a list of skills they need to improve?

Ask for a sample assessment form with other participants’ personal data removed. This document is more useful than a promise to provide training “until you can do it”.

2. Put pass requirements in their legal context

Franchising in Indonesia is specifically governed by Government Regulation No. 35 of 2024 on Franchising, which replaced Government Regulation No. 42 of 2007. One of the criteria for a franchise is ongoing support from the franchisor. Training is an important part of the support needed to operate the business system.

However, this support obligation does not mean that every package automatically includes unlimited training, guarantees that all participants will pass or covers all repeat-training and resit costs. The scope of services and allocation of responsibilities need to be clarified in the agreement you will sign.

Alongside the franchise-specific rules, the contract provisions of the Indonesian Civil Code are also relevant. Article 1320 sets out the requirements for a valid agreement, while Article 1338 establishes the binding force of lawfully concluded agreements and requires them to be performed in good faith. Do not, therefore, treat training requirements as an informal matter to be discussed only after payment.

If passing the training determines whether you receive internal approval to operate the outlet, ask for the contract to specify who has authority to assess participants, the assessment criteria and how results will be communicated. Distinguish the brand’s internal approval from government licensing: passing brand training is no substitute for business licences or other competency requirements applicable to particular activities.

3. Calculate the cost of resits and replacement participants

Initial training fees may be included in the package price, but related costs may not be. Request a written quotation that separately identifies charges for trainers, practical materials, venue use, assessments, travel, accommodation and meals. Also clarify who pays employees’ wages while they attend training.

Next, work through three scenarios before agreeing to the package:

1. A participant has not passed. Are remedial sessions available? How many resits are allowed, when are they held and how are the fees set?
2. A participant cannot attend. Can their place be transferred to another employee? What happens if the change is made after training has begun?
3. A trained employee resigns. Can the franchisee train a replacement in-house, or must the replacement attend central training?

For each scenario, record the direct costs and any need for staff cover. Training that appears inexpensive can become costly if it is only available out of town or requires participants to repeat the entire programme because they have not mastered a single competency.

Negotiate clearly defined rates or a verifiable fee formula, rather than accepting wording such as “in accordance with head office policy”. Also ask whether training for a specified number of replacement staff is already included in the package. Do not assume this benefit is available unless it has been confirmed in writing.

4. Agree a fair reassessment process

Brand standards must still be maintained, but a participant’s failure should be followed by a clear improvement process. Propose that participants receive reasons for failing, details of material to revisit, opportunities for additional practice and a date for their next assessment.

If a participant disputes a result, ask for a review mechanism involving another assessor or a reassessment based on practical training records. The aim is not to force the franchisor to pass participants, but to ensure that decisions are made on a consistent basis.

Also clarify what happens if the trainer cancels a session or practical training facilities are unavailable. Will replacement sessions be provided at no extra charge, and how will travel costs already incurred be handled? These are matters to agree on, not automatic rights to reimbursement in every situation.

Before signing, prepare a one-page summary covering who must attend, the required competencies, assessors, costs, resit opportunities and rules for replacement staff. Check that this summary matches the binding terms.

The bottom line: do not simply buy a set number of training days. Make sure you understand the skills participants must acquire, how a pass is determined, and the costs and options available when someone needs further training.