Training expense refers to the total out-of-pocket costs that a franchisee incurs to participate in required training programs mandated by the franchisor. These may include travel, lodging, meals, wages, and supplemental training fees. Training expense is typically disclosed in Item 7 of the Franchise Disclosure Document (FDD).
Training expense in franchising represents the cumulative financial cost associated with attending and completing the training programs that franchisors require of new franchisees and their key staff. These costs go beyond any training fee that might be included in the initial franchise fee and encompass all expenses tied to attending the training—such as airfare, hotel accommodations, meals, lost wages, and additional participant costs. Training is essential to help franchisees learn the systems, procedures, customer service standards, and operational methods that define the franchise brand. Franchise agreements may also require ongoing training after the business launches, with associated training expenses to be paid by the franchisee. A clear understanding of training expense is critical for budgeting and should be reviewed carefully in the FDD’s Item 7 disclosures.
Also see 'Training Cost'
Learn more about franchising in The Educated Franchise - 3rd Edition
The concept of became standardized as franchise systems matured and began offering formal onboarding programs in the 1960s and 1970s. As systems expanded, franchisors required new franchisees to attend centralized or regional training to maintain operational consistency. These programs became more sophisticated—and often longer—as franchise systems added new technologies and compliance requirements. Today, training expenses are common and often necessary for both initial operations and ongoing development, especially as brands evolve or roll out new services. State and federal franchise laws now require these expenses to be clearly disclosed, providing transparency for prospective franchisees.
Training expense is a critical part of the initial and ongoing cost structure of owning a franchise. While the franchisor typically provides the training itself, franchisees are responsible for many of the associated costs. A thorough understanding of training expense helps ensure accurate budgeting and reduces the risk of unexpected financial strain during startup and beyond.