Buying a Franchise

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5 things you need to know about Buying a Franchise

  1. Buying a franchise, either from a franchisor, or an existing franchisee, can be a great way to launch an entrepreneurial career with the support an existing business structure. Australians are avid franchisees and it is a business structure that is well regulated by the Franchising Code of Conduct.
  2. As with any new business venture, it’s important that you perform due diligence before signing up as a franchisee. This means that you need to review the franchise agreement and the disclosure document, including to make sure that the business model works from a cash flow and profit and loss perspective. Perhaps most importantly, make sure you’re not entering into a contractual arrangement that heavily favours the franchisor.
  3. The two main documents that you’ll need to have reviewed are the franchise agreement and the disclosure document. These two documents set out all the terms under which you will be entering into the franchise, including all the payments required.
  4. If you’re purchasing a franchise from an existing franchisee you will also need to have the sale of business agreement reviewed. This isn’t necessary if you’re purchasing a new franchise from a franchisor.
  5. Finally, if the franchise you’re purchasing is based in a commercial space you will also need to have the commercial lease agreement reviewed. You need the lease transferred to you, and you need to understand the lease and ensure that you are happy with it.
Our Buying a Franchise Lawyers
Emma Jervis Key Focus:

Employment, Franchises, Business And Commercial, Litigation


Clinch Neville Long, McCabes, Neville & Hourn

Masao Watanabe Key Focus:

Business And Commercial, Franchises, Litigation



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