What do I need to think about when launching a train the trainers programme both in the UK and overseas?
With a train the trainer program, you are training people in your particular methodology or technique so that they can then deliver this training to their own end clients.
Typically there are two agreements that are required. The first is to govern the contract in relation to the actual training provision, such as the fee payable (typically a one off upfront fee for the training that may be payable in instalments to allow the student to spread the cost), the specific delivery of the training (what is being provided, where is it being provided, who is providing it when is it being provided), protection of your Intellectual Property, termination rights (e.g. the right to terminate if a participant is being disruptive to the group), and provisions in relation to the objective criteria as to whether they meet the standard required to be able to train other people in the particular methodology or technique. It's very important that the criteria are objective as opposed to subjective and are provided in detail, so that there is no scope for dispute or refund requests down the line. The contract should also include a contractual restriction on the participants using your ideas and methodology for a competing business or setting up in competition with you.
Then the second agreement is the ongoing licence agreement, once the trainer has reached the relevant criteria to train other people. This is a licence of your intellectual property such that they are able to use your methodology/technique and any associated materials. It may also be a licence of your trademark so that they can deliver their trainings under your brand. If you are allowing the participants to deliver trainings under your brand, then you would need more provisions in the licence agreement to protect your brand such as quality control, dealing with complaints and the ability to terminate if you reasonably believe that they are not upholding your standards or doing anything else that might affect your reputation. It's important to obtain your registered trademark before you allow licensees to trade under your brand as otherwise there is a risk that they could apply for the trademark ahead of you and stop you from using your own mark! The typical timeline on obtaining a trademark in the UK is 3 to 5 months so you may need to plan ahead. You should also consider applying for a trademark in any other jurisdictions in which you are licensing licensees.
If you are agreeing to promote the licensee’s services on your website or provide other marketing support in order to help to find them end clients, it's important to include a clause to state that there are no guarantees as to how many leads you may generate and how many clients might sign up with them. This is an area that has a potential to cause dispute, so unless you have a solid lead generation system that is going to provide value to the licensee (and for which you will charge handsomely!) then it is better to stay clear of any promises to generate leads.
In terms of the fee structure for the licence agreement, typically there would be a minimum fee payable, normally on an annual basis (but it could be on a monthly or quarterly basis), which would cover your costs plus a bit more in setting up the licence. This is to guard against the licensee deciding not to actually practise the training and you having wasted all of your time and effort in setting them up as a licensee. Then there would be a variable fee which is typically based on a percentage of the revenue brought in from the delivery to end clients of the training. You should have audit rights in the contract so that if you suspect that the licensee is not being frank about the turnover produced as a result of the delivery of the training, you could instruct your own accountants to look at their books and enforce compliance with the contract.
The other big thing to consider is the issue of exclusivity of territory. Obviously it would be to your advantage to grant a non-exclusive licence but there is a lot of value in granting an exclusive licence, so this really depends on the commercial situation at the time. It's important not to shortchange yourself by giving an exclusive licence for a territory when you are starting out, as value will grow in your business and you may regret this later down the line. The most important thing is to be clear about exclusivity and if you do grant any kind of exclusivity to make sure that the territory is well defined.
You also need to think about advertising and marketing – are you happy for the licensee to promote the training as they see fit or do you want approval on their marketing or to stipulate that they have to use your template marketing? Are they obliged to carry out a minimum level of marketing? If so, then this should be provided for in the agreement.
Finally, you want to get an indemnity from the licensee to reimburse you for any loss that you suffer as a result of the licensee's activities and any failure to comply with the law and regulation.
You can decide to charge different loyalty percentages for different licensees, particularly if they are from different countries, but it would be wise to have a confidentiality provision in your contract that prevents them from discussing the terms of their agreement with other trainers or any other third parties.
If you are dealing internationally, then it's important to take tax and accountancy advice and also to consult with lawyers in the jurisdictions in which the potential licensees are based. The UK has a fairly lax regulation relating to licences and franchises but in most other countries it is a highly regulated area and you don't want to fall foul of any of their laws.
If you're interested to know more and to ask your own questions to top business lawyer Suzanne Dibble and learn from the experience of lots of other small business owners, then click here to apply to join our thriving membership for just £1 for your first month!
© Suzanne Dibble 2013-2022
The information contained above is provided for information purposes only. The contents of this article are not intended to amount to advice and you should not rely on any of the contents of this article. Professional advice should be obtained before taking or refraining from taking any action as a result of the contents of this article. We disclaim all liability and responsibility arising from any reliance placed on any of the contents of this article.
