Are Training Agreements the Answer for New Franchise Manager Retention?

New clients frequently ask me if I have a training agreement I can provide. As much as I hate saying no to any client request, my decision to not draft a training agreement as a standard offering for my clients is intentional because I have mixed feelings about using them.

While the law generally allows employers to require managers to sign these types of agreements (shockingly, even in California) in exchange for highly specialized training that will benefit them, there is enough red tape associated with executing these documents that I have a hard time justifying them in most cases.

Here is a list of what I consider to be advantages and disadvantages to implementing a training reimbursement agreement:

Advantages

1. Provides financial recourse to the franchisee if the employee leaves soon after becoming certified.
2. Theoretically, serves as a deterrent to employees who might not otherwise take training seriously.
3.  Shows the employee, in writing, a pretty significant number that you are investing in them. The idea here is that employees who possess the tiniest sense of loyalty and ethics will not think about leaving for at least a year.

Disadvantages

1. Payroll deduction from the final check to reimburse for training may not allowed and even if it is in your case, the employee may not authorize it, so enforcing these can be challenging – think small claims/civil court.
2. Employees may stay longer than you want them to because they are concerned about having to pay you back. Managers who stick around out of fear are not in it for the right reasons and this could negatively impact your business.
3. If these agreements are not very carefully drafted and enforced, you could find yourself in legal trouble that will be way more costly than just absorbing the training expense.

When my clients are really adamant about wanting some kind of agreement to protect them from managers leaving too soon after training, I prefer to add language to the offer letter (offer letters are great – more on those in a later post) to accomplish this instead. It’s a pretty decent compromise and checks off most of the advantages above.

Want to know more about training agreements and how to incorporate them into your manager promotions? Give us a call for a free 10 minute consult 217.636.3566.

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