Buying a franchise: assess training and support before you start

When you buy a franchise, you join a network, but you still run an independent business. That makes it essential to understand what the franchisor will actually help you with. Phrases such as “comprehensive training” and “ongoing support” are not enough to base a decision on. Here is a practical way to assess the support before signing the agreement and work out what you will need to arrange yourself.

1. Turn promises of support into specific commitments

Start by asking the franchisor to describe the support available before opening, during the launch and throughout day-to-day operations. Distinguish between what is included in the fees, what costs extra and what you are responsible for yourself. A presentation of the franchise concept is not the same as a binding commitment to help you.

Create a simple checklist with the following questions:

• Initial training: What does it cover, who must attend and how is learning assessed?
• Preparations: Who helps with staffing, system installation and local procedures?
• Opening support: Will someone be on site, at what times and with what responsibilities?
• Ongoing help: What contact channels are available, when are they staffed and how are urgent problems prioritised?
• Further training: What happens when the concept, systems or working methods change?

Also ask for an example of an actual training plan and a timetable from a previous franchise opening. These documents do not need to contain other business owners’ confidential information to show how the support works.

Use your own experience as a starting point. If you lack knowledge of staff management or financial monitoring, check whether the training covers these areas. Training in the franchise concept can be good without amounting to a complete course in running a business.

2. Use your right to information before committing

Sweden has an Act on Franchisors’ Duty to Provide Information (2006:484). It requires franchisors, well before a franchise agreement is concluded, to provide clear, comprehensible written information about the implications of the agreement and any other matters that need to be disclosed in the circumstances.

Among other things, this information must describe the franchise business, fees and other financial terms, as well as other franchisees in the same system and the scale of their operations. The Act also covers information on matters such as intellectual property rights, compulsory purchases, non-compete restrictions, the agreement’s duration and dispute resolution.

When assessing support, the distinction between information and a contractual promise is crucial. The duty to provide information does not mean that the law guarantees a particular training duration, staffing level or response time. Anything you need to be able to insist on should therefore be clearly set out in the agreement or in schedules expressly incorporated into it.

The Act does not set a general deadline expressed as a fixed number of days. Request the documents early enough for you and your advisers to review them and ask follow-up questions without time pressure.

Sweden has no comprehensive franchise law governing the entire relationship. Other legislation, including the Contracts Act and the Competition Act, may also be relevant. You enter into the agreement as a business owner, not as a consumer. Have a lawyer with franchise expertise assess how the support commitments are worded and what options the agreement gives you if promised help is not provided.

3. Check the support with existing franchisees

The experience of other franchisees is an important complement to reviewing the agreement. Ask to speak both to a recently established franchisee and to someone who has been operating for longer. Where possible, choose businesses with circumstances similar to yours, such as their size, staffing and the owner’s previous experience.

Ask specific questions rather than simply asking whether they are satisfied:

• What were you actually able to do independently after the initial training?
• What help did you lack during the first few months?
• The last time you had an urgent operational problem, how well did the contact process work?
• What training or advice did you have to pay for separately?
• How much additional working time did the launch require beyond the original plan?

Distinguish between isolated dissatisfaction and recurring patterns. If several franchisees describe the same shortcoming, ask the franchisor to explain how it is being addressed today. Ask about changes to procedures, not just assurances that the problems have been resolved.

Also investigate the capacity behind the promises. Is there someone to cover for your contact person when they are absent? How is support planned when several new businesses open at the same time? A helpful contact person is valuable, but support needs to work even when that particular person is unavailable.

4. Allow for the full cost and put responsibilities in writing

Calculate the full cost of using the support. Even training included in the franchise fee may involve travel, accommodation, wages during training and the need for cover staff. Also allow for your own working time and any external help with matters the training does not cover.

Draw up a separate plan for a delayed opening. Which training sessions would need to be rebooked? Would extra guidance incur additional costs? Would launch support still be available if the timetable slipped? Factor these uncertainties into your cash flow budget before discussing finance.

Finally, ask for the agreement to clarify what support includes, who is responsible for providing it, when it will be delivered, what it costs and any conditions that apply. In particular, check whether the franchisor can change the support through an operations manual and how such changes would affect your costs. Have your lawyer check which documents take precedence if the presentation, manual and agreement say different things.

Practical takeaway: Do not sign until you can describe what you will receive, when you will receive it and what you must pay for yourself. Check the promises with other franchisees and make sure the key support commitments are included in the agreement.