The Steps to Buy a Franchise in Australia: A Buyer’s Roadmap
- Neda Whelan (LLB, LLM, GDLP)
- 2 days ago
- 6 min read
Introduction
Buying a franchise is, for most people, among the largest financial commitments they will ever make, and it is usually a decision reached with enthusiasm already formed. By the time you begin evaluating a system in earnest, you have generally decided the opportunity is attractive. The steps to buy a franchise are not there to displace that enthusiasm but to test it. This roadmap sets out the sequence a careful buyer follows, from the first honest question about whether franchising suits you, through the research, the numbers and the agreement, to the point of signing. It draws together our series for prospective franchisees, with each stage linking to a fuller treatment.
Why the Order of the Steps Matters
Australian franchising operates under a comprehensive regime, governed primarily by the Competition and Consumer (Industry Codes – Franchising) Regulations 2024, a mandatory industry code with the force of law that the Australian Competition and Consumer Commission enforces. Much of the information you need is information the franchisor must give you by law: the disclosure you receive, the time you are allowed before signing, your cooling-off right, and the obligation of good faith. Those protections are most useful to a buyer who understands them and works through the evaluation in order.
Step 1: Decide Whether Franchising Suits You, and What You Are Buying
Two threshold questions deserve an honest answer at the outset. The first is temperamental. You will own your business and carry its risk, yet operate it within a system that belongs to someone else, on terms you do not set. Those who do well embrace that arrangement rather than merely tolerating it; if your instinct is to improve the model rather than follow it, building your own business may be the more honest path. The second question concerns the asset. You are not acquiring a business outright, but a licence to use the franchisor’s brand and systems for a defined period. When the term ends, the licence ends with it, and the goodwill you build usually attaches to the system rather than to you. We explore both questions in Part 1 of our series.
Test the opportunity before you commit
Before you sign, make sure the system and the agreement are the right commercial and legal fit. Learn how our franchising law team can guide your due diligence and review your agreement for compliance with the Code.
Step 2: Research the System Before You Commit Anything
Good due diligence begins earlier than most buyers realise, and the true starting point is free and public. The Franchise Disclosure Register, hosted by the Australian Government and administered by the ACCC, records key information about each franchisor operating in Australia, and you can search it at franchisedisclosure.gov.au before you speak to anyone. Absence from the Register, or a profile plainly out of date, is a warning sign. Once discussions become serious, the Code entitles you to a disclosure document at least 14 days before you sign or make a non-refundable payment, and it rewards close reading. The franchisees already in the network, both current and former, will then tell you whether the support promised at the sales stage matches what is delivered. Part 2 sets out how to work these three sources in order.
Step 3: Build Honest Numbers
Every franchisor presents its system in the best light, and your task is to translate that optimism into numbers that reflect your situation, your site and your appetite for risk. Where earnings figures are offered, ask what sits behind them, since benchmarks from comparable outlets are worth more than a confident forecast, and network averages conceal the spread between the strongest and weakest sites. Build a full model of the upfront and ongoing costs, including a market salary for your own labour, then stress-test it against a weaker year. Since 1 November 2025 the Code has also required that an agreement give you a reasonable opportunity to earn a return during the term on any investment the franchisor requires. Part 3 works through the model in detail.
Step 4: Read the Agreement and the Code Together
The franchise agreement records what you are agreeing to, and the Code builds a framework of protections around it. A handful of clauses carry most of the commercial weight: term and renewal set how long your investment runs; the fees set your cost of operating; supply and pricing set your margins; territory sets your market; and transfer, termination and restraint set what happens at the end. Understand exactly what your territory grants and what it does not, since a map may still leave you exposed if the franchisor reserves online or direct sales within it, and understand the supply terms, which can decide whether the business is viable. Our franchising law team can read these against what is normal in your sector, as Part 4 explains.
Step 5: Check the Exposures Buyers Overlook
Three exposures sit slightly out of view and can each reshape the economics of the deal. The first is the premises: where the franchise trades from a fixed site, establish who holds the lease and whether the lease term and the agreement term line up, since a mismatch is a trap in either direction, and our commercial and retail leasing team can review how the two interact. The second is capital expenditure the franchisor can require after you sign, including a possible second fit-out at renewal, so project the full capital horizon over the term. The third is the exit: understand your renewal rights, the cost of selling, and any post-term restraint, which the Code now limits where an agreement simply expires and is not renewed, provided certain conditions are met. Read the exit before you sign. Part 5 covers all three.
Step 6: Take Independent Advice and Commit With Clarity
The agreement will record that you had the opportunity to obtain independent legal and financial advice, and that opportunity deserves to be treated as substantive rather than a formality. An experienced franchise lawyer identifies the clauses that matter most for you, compares the terms against sector norms, advises whether the protections are adequate, and confirms that the disclosure document and agreement comply with the Code. Even where the core terms will not move, it is worth asking the franchisor to confirm an ambiguous point in writing. A problem found before signing can be negotiated or planned around; the same problem found afterwards is simply a cost you carry. Part 6 explains how to commit with clarity.
How We Can Help
No amount of preparation removes all risk, but it changes the character of the risk you accept: you commit knowing what you are buying, what it will cost, and how you intend to grow and eventually leave. Our franchising law team brings a perspective shaped by senior in-house roles inside major national networks, so we read a franchise agreement as the franchisor’s own advisers do and act wholly in your interest. We can guide your due diligence, review the disclosure document and agreement against the Code, and provide the independent advice the agreement assumes you will take, drawing on our broader commercial law practice where the deal calls for it. If you are working through the steps to buy a franchise, contact our team to arrange a conversation.
Frequently Asked Questions
What are the main steps to buy a franchise in Australia?
Decide whether franchising and the system suit you; research the franchisor through the Franchise Disclosure Register, the disclosure document and the existing network; build and stress-test honest numbers; read the agreement and the Franchising Code together; check the premises, capital and exit exposures; and take independent legal and financial advice before you sign.
How long must a franchisor give me before I sign?
Under the Franchising Code you are entitled to the disclosure document at least 14 days before you enter the agreement or make a non-refundable payment, a period the 2024 Regulations call the consideration period. After signing, you also have a 14-day cooling-off period during which you may terminate and recover the monies paid, less the franchisor’s reasonable expenses.
Do I really need a lawyer to buy a franchise?
There is no legal requirement, but the agreement will record that you had the opportunity to take independent advice, and the cost is modest against the size of the commitment. A franchise lawyer identifies the clauses that carry the most commercial weight, checks compliance with the Code, and flags problems while you still have the leverage of a buyer deciding whether to proceed.
What is the Franchise Disclosure Register?
It is a free, public register hosted by the Australian Government and administered by the ACCC, on which franchisors operating in Australia must maintain a profile. You can search it at franchisedisclosure.gov.au to compare systems and run a basic compliance check before contacting anyone. Because the information is supplied by franchisors and is not verified, treat it as a research tool rather than a guarantee.
Disclaimer: This article provides general information only and is not legal advice. The law is complex and varies with individual circumstances, and you should obtain advice tailored to your particular situation from an experienced franchise lawyer before making decisions about buying a franchise.
Neda Whelan
Neda Whelan is the Founder and Principal of Whelan Lawyers. With over a decade of experience as former General Counsel for major national networks such as Clark Rubber and Jim's Group, she provides practical, commercial-first legal strategies for franchisors and business owners.
