Buying a franchise is an attractive option for would-be business owners who want to work with an established brand. As buying into a franchise network is a significant commitment, it is important that you obtain advice from a franchise lawyer before entering into a franchise agreement.

LegalVision’s Franchise Team can assist with all aspects of buying into a franchise network, including:

  • reviewing the franchise documents (i.e. franchise agreement, disclosure document, operations manual and any financial statements);
  • reviewing the sale of business agreement if purchasing from an existing franchisee;
  • negotiating with the franchisor on your behalf;
  • conducting thorough due diligence on the franchise network; and
  • reviewing and advising on your commercial lease.

Our franchise lawyers have a well-established reputation in Australia’s franchise space and provide tailored advice to potential franchisees. We have advised clients operating across a diverse range of industries – including hospitality, home services, IT and retail – and can apply our specialist knowledge to your franchise purchase. Our franchise team can clearly explain your obligations and rights under the franchise agreement. Importantly, our franchise lawyers are available to provide cost-effective, practical commercial advice before, during and after you enter into a franchise agreement.

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5 Things You Need to Know About Buying a Franchise

  • 1Buying a franchise — either from a franchisor or an existing franchisee — can be a great way to launch an entrepreneurial career with the support of an existing business structure. Australians are avid franchisees and it is a business structure that is well regulated by the Franchising Code of Conduct.
  • 2As 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 making 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.
  • 3The 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.
  • 4If 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.
  • 5Finally, 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 ensure that you understand and are happy with the lease.

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