Buying in to a franchise is not so different to buying any other business – it demands time and effort. There are many areas that deserve your careful consideration when getting involved in a franchise; not least of which is double-checking you have all the necessary legal documents in place.

While the legal side of things is paramount, don’t overlook other important aspects of the investment choice, such as assessing your financials, or choosing an appropriate franchise. On top of this, your franchise lawyer will want to review any financial data of the franchisor, and enquire into the quality of the goodwill in the company.

Your franchise lawyer will be reassured knowing you have come fully prepared, having assessed every aspect of the franchise. Once you are your lawyer are on the same page, they will ask you about the following:

Initial enquiries

How well have you investigated the type of franchise you’re considering becoming involved with? What did you discover? What is the public opinion about the franchise? How many people will pass by the location of the proposed premise of the franchise? Is this adequate? What are your investment costs? What are your future potential earnings? What is the term of the lease? Are there options to renew? What level of competition will you be facing? How close is the nearest competitor?

Reasons to buy

Your motives for buying-in to a franchise are important, as they may affect the type of advice you’re given, in terms of the business structure as well the types of franchise documents.

For instance, there are franchisees that buy-in to a franchise because they have become redundant and they see franchising as another option for work. Some are searching for routine or moving into a specific industry or looking to expand their employment opportunities.

Your individual circumstance

It’s important you consider, based on your general day-to-day routine, whether a franchise lifestyle is right for you. If, say, you’re looking at running a bakery and you don’t plan on hiring a baker, you will have to work late/early hours.

Or perhaps you want to work in retail or in hospitality and aim to lower costs by personally working in the shop. You’ll be committing to more days than you planned and might end up working in the evenings.

Ask around

It’s a good idea to speak with some franchisees in that franchise to gauge whether the job is right for you. They will have valuable insight into the inner-workings of the industry. A franchise lawyer is going to suggest you get as much information as possible from franchisees before you sign the dotted line and spend the big bucks.


How easy will the transition be considering your own capabilities? Are you skilled in the field? What training is included in the package? Are you qualified or do you need certain licenses? Have you factored in these added costs? A franchise lawyer will expect you to have done this research.

Location, Location

Recognise your location and decide whether it has potential. What level of exclusivity will you have in this location?


Do you have an accountant who can look over the franchise materials? Profitability is important and a franchise lawyer can’t give you these answers.


Can you afford this venture, keeping in mind the start-up fee and on-goings? A franchise lawyer would advise you speak with a financial institution prior to making any hasty financial decisions to get a better idea of how much you are capable of spending.

Business Structure

In what structure will you be taking over the franchise? Will you need to incorporate or establish a trust? How are your assets being protected? Is this adequate? What are the taxation consequences of running a franchise and will they affect your other assets?

Planning ahead

What will you do if you decide you’d like to sell in the future? What are the steps involved in selling? Will the franchisor be entitled to buy-back the business? What will happen if you pass away or become seriously injured?

When shopping around for a franchise that’s right for you, take your time and choose wisely. There are various legal considerations before, during and after any franchise investment, all of which require the professional guidance of a franchise lawyer.


Be prepared to answer the above questions. You will want your franchise lawyer to be fully informed so that they can negotiate favourably on your behalf. For more information on what kind of information you should start preparing for your consultation, contact LegalVision on 1300 544 755 and speak with one of our franchise lawyers today.

Emma Jervis
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