Selling a franchise is a slightly different process than the sale of an ordinary business. Normally, there is an established procedure for the sale of any branch of the franchise.

You would find this process detailed within your franchise agreement under the ‘assignment’ clause, as well as in the operations manual. Despite the restrictions that might be imposed under the set procedure, it can simplify the whole process by identifying the things you must do in order for a sale of business to be a success.

If you’re considering selling your branch of the franchise, it’s definitely worth speaking with a franchise solicitor. It’s also a good idea to discuss the decision with your franchisor and neighbouring franchisees, as they may be able to advise you on how to go about it, or even show some interest in purchasing your franchise. Alternatively, they may know someone who is interested in purchasing the business, so it always worthwhile making the necessary enquiries so that you have options.

What does the Franchising Code of Conduct say about selling your franchise?

According to the Code, the franchisor must give a disclosure document to the purchaser of your franchise. Transparency is very important in any business transaction, so it’s a good idea to personally give a copy of the disclosure document to any prospective purchaser.

What are the standard obligations set out in a franchise agreement?

Every franchise agreement is unique. As such, the obligations on the franchisee when selling the business may vary depending on how the franchise solicitor drafted the agreement. Ask the franchisor if there are any additional prerequisites to selling the business. These requirements might include, but are not limited to, the following:

  • A ‘first right of refusal’ that gives the franchisor the right to buy the business back from you before any other potential purchaser;
  • An assignment fee;
  • The right to meet and greet the potential buyer (usually an interview);
  • The franchisor might have to give their approval before allowing the franchisee to sell;
  • The costs involved in training up the new franchisee must be worn by the old franchisee;
  • All accounts must be paid in full before any sale can go ahead;
  • A restrain of trade clause that prevents the old franchisee from using any of the franchisor’s intellectual property, and stops them from competing in any way that is contrary to the restraint clause;
  • The old franchisee must give any business registration documents to the franchisor or the new franchisee;
  • Any operations manuals or other documentation must be returned to the franchisor prior to the sale.

In addition to this, the franchisee will have to give back any client lists, mobile numbers, email addresses or other materials that relate to the operation of the franchise.


If you’re thinking that maybe it’s time to move on and sell your franchise business, consult your franchisor and your franchise lawyer to get the ball rolling. If you don’t have a franchise consultant or solicitor to help you with this, call LegalVision on 130 544 755 and speak with one of our experience franchise solicitors. We’ll provide you with a fixed-fee quote for advice on the sale of your franchise business.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Lachlan McKnight
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at

View Privacy Policy