Training costs

Item 7 training money is usually the cost of getting people to training and housing them while they are there. It is not a tuition line, and it is not the wage cost of training a full opening crew. Item 11 states the required hours and who must attend. Item 7 estimates some of the cash attached to those hours. Mixing the two produces a number neither item printed.

The league table at the end of this chapter includes every training-bucket row. All five itemised filings have one, and none of them uses the same label.

The five disclosed rows next to Item 11 hours

Brand	Item 7 label	Low	High	Classroom hours	On-the-job hours
German Doner Kebab	Initial Training	$5,000	$10,000	40	120
Shah’s Halal Food	Travel Expenses to Attend Training	$2,000	$20,000	19	85
The Great Greek	Travel and Living Expenses (while attending training)	$10,000	$20,000	60.25	180
Mad for Chicken	Your Training Expenses	$3,000	$6,000	25	106
375° Chicken ‘n Fries	Your Training Expenses	$100	$5,000	23	67

Hours come from the brand records for those filings, not from Item 7. Great Greek’s 60.25 classroom hours and 180 on-the-job hours are the longest classroom block in this itemised set, on a 35-year term. Shah’s Item 7 label is the most precise about what the dollars are: travel. 375°’s $100 low is the figure that only makes sense as a local commute; the $5,000 high is travel and living for someone who is not local.

GDK’s Initial Training of $5,000–$10,000 is the least specific label. It may include a training fee paid to the franchisor, travel, or both. Item 5 and the footnote decide. The 40 classroom and 120 on-the-job hours still have to be staffed. Those hours are labor. They belong on the pre-opening payroll calendar that feeds working capital, not as a capitalized wage inside the $10,000 high.

Who attends, and who is unpaid

Item 11 typically names a managing owner and a number of managers. It does not pay them. If two people fly to training for two weeks, Shah’s $2,000 low is airfare-shaped and the $20,000 high is airfare-plus-hotel-plus-meals-shaped for more than one person, or for a longer stay, or both. The filing does not require this directory to guess which. It does require a buyer to count heads before using the low.

Great Greek’s $10,000–$20,000 of travel and living against 60.25 classroom hours is the combination that most often surprises owner-operators who planned to “split time” with a store already open. Those classroom hours are a block of calendar, not a video library. The 180 on-the-job hours may be in a training restaurant in another city. Living expenses continue until they end.

Wages for the rest of the opening crew — the people who are not in the Item 11 named-attendee list — are not in these rows. They are pre-opening payroll. GDK’s additional funds of $15,000–$20,000 for three months will not absorb a full crew’s training week if the footnote assumed a quieter ramp. Mad for Chicken’s $51,375–$162,000 additional-funds band is the one that might, if the footnote listed payroll. Read it.

Training is not the franchise fee

The fee buys the right to open. Training cash is extra unless Item 5 says tuition is included and Item 7 therefore prints only travel. GDK, Shah’s, Mad for Chicken, and 375° each print a franchise fee ($30,000, $30,000, $35,000, $40,000) as its own row. Great Greek prints $35,550–$39,500, with the low reserved for affiliated-brand owners. Adding training into the fee to make one “cost of joining” number erases the travel check that is due on a different day, often to airlines and hotels rather than to the franchisor.

The FTC’s compliance guide requires Item 7 to state to whom the amount is paid. A training row paid to the franchisor is a different cash event from a training row paid to United Airlines. Copy that column onto the worksheet.

Worked example: do not divide dollars by hours

Shah’s $20,000 high ÷ 104 Item 11 hours (19 + 85) is about $192 per hour. Great Greek’s $20,000 high ÷ 240.25 hours is about $83 per hour. GDK’s $10,000 high ÷ 160 hours is $62.50. Those unit costs are nonsense. The Item 7 dollars are mostly travel and living; the hours are curriculum. A cheap hourly figure can mean the buyer lives near the training restaurant. An expensive one can mean two people flew across the country. Neither figure is the wage of the opening crew.

375°’s $100 low ÷ 90 hours is about $1 per hour and should not survive a second look. It is a disclosed low for a local attendee’s expenses, sitting next to a $5,000 high. Use the high if anyone is traveling. Use a wage schedule regardless.

Training checklist

1. Copy the Item 7 training label exactly — especially Shah’s “Travel Expenses to Attend Training” and Great Greek’s “Travel and Living Expenses.”
2. List every person Item 11 requires, plus anyone the operations manual effectively requires.
3. Price airfare, lodging, meals, and local transport as a trip budget.
4. Price pre-opening wages for named attendees and for the rest of the crew as a payroll budget, on the working-capital calendar.
5. Confirm whether a training fee to the franchisor sits in this row, in Item 5, or in neither.
6. Ask recent franchisees how long they were away from the site and what they spent beyond the Item 7 cell, as the FTC’s FDD walkthrough recommends.

Training restaurants, new markets, and remote modules

Item 11 may require training in a specific restaurant that is not in the buyer’s city. Great Greek’s 180 on-the-job hours are the block most likely to mean weeks away from home. Shah’s 85 on-the-job hours can still mean a cross-country trip if the training restaurant is the only one the franchisor will certify. GDK’s 120 on-the-job hours sit inside a five-outlet minimum; a multi-unit buyer may be sending more than one crew. The Item 7 travel cell does not multiply itself by the development schedule. The cash plan has to.

New-market openings add hotel nights after “training” officially ends, while the franchisor’s opening team is on site. Great Greek’s Opening Assistance of $500–$2,000 is other, not training, and is not a housing budget for that team. If the franchisee is expected to house or feed them, that is a footnote or an operations-manual fact. It is not Mad for Chicken’s $3,000–$6,000 training row.

Remote or computer-based modules, where they exist, can make 375°’s $100 low plausible for a local owner who already lives near the training restaurant. They do not cancel on-the-job hours. Count hotel nights against the hours that still require presence.

The injected comparison below sorts training rows by high estimate. Shah’s and Great Greek will sit at the top because of travel. That is a travel ranking, not a curriculum ranking.