SELLER TRAINING THE BUYER

There is no standard for a training agreement in a business buy/sell contract. The duration and particulars covering this service provided to buyer by seller are as varied as the individual circumstances of each party’s situation. But as the purpose of the training program is to make sure the buyer is successful in the business–which is in the interests of both sides to the deal–the program should be designed to serve this end.

Many training pacts are based on the assumption that the buyer’s need for information and advice will be most critical right after the company changes hands. That need will most likely decline after a few weeks, as the buyer learns the business operating procedures and gets to know the employees, key vendors and major customers. Following this principal, training agreements usually call for the seller to spend time a few hours every week–maybe every day at first–with the buyer, until much of the basic information about running the business has been passed along. This initial period might require the seller to be on premises for a while.

A typical program will specify a period for the buyer to receive the most concentrated part of the training to start. That might be defined as a few days or several weeks, depending on the complexity of the business and the experience of the buyer.

The training period or periods that follow, calling for less seller involvement, should also be defined as to length and means of communication. The seller might, for example, be required to provide a “second phase” of training for a period of, for example, six weeks. Typically, the agreement will call for this part to be handled in phone or email conversations and there often is a limitation of, say two or three hours per week. The appropriate subjects for these interactions have to do with problems the buyer is encountering that were not discussed during the initial training period.

If the buyer wants the seller available to answer questions for up to six months or more after close, and if the seller is in accord with this, the fact should be spelled out in the training agreement.

IF THERE ARE PROBLEMS

While most sellers will object to being called on by the buyer to answer questions and to help solve problems after completion of the training program, the smart seller usually will cooperate with the request, at least for a few weeks. It may be annoying for a seller to continue getting calls, but it is easier and less costly than responding to a formal accusation–perhaps in the form of a lawsuit–claiming that the seller has not provided the buyer with the information and advice needed to be successful in the business. And the seller can always consult an attorney, if the buyer’s need continues well beyond the contractual period.