Well it's quite common that people often over promise, or exaggerate their abilities. I think this is just because they want to make the best impression that they can. It doesn't though mean that they intend to be deceptive. People, well anyway when it comes to job interviews, well, seem to over sell them selves. In regards to their job training - you really need to teach them everything you know about management, why not take the profits, and have someone else run the store? If the training doesn't seem to be sinking in, and they appear not remember what you've taught them then it could quite possibly be that they are so afraid on the inside that they could do a bad job, or get on your bad side, or even be fired! They just need to calm down, develop self confidence, self respect, and be themselves and enjoy their job...
...self help or personal development books should help,
I recommend having them read through a few,
Below is a link to a website that provides FREE copies of some of the best self improvement texts of the last 100 years.
Oh! and umm, get him a high quality MANAGEMENT textbook,
that should help a heap too