Franchising in Australia is regulated under the provisions of the Competition and Consumer Act 2010 (Cth). Franchisors must have a keen understanding of issues that can become problematic in running a franchise. Most franchising systems also require ongoing support services in the form of training, marketing and group advertising. While not always strictly mandated by the franchisor, most commercial franchising in Australia involves some element of control by the franchisor of these elements. A franchising lawyer can assist you understand your obligations under the Competition and Consumer Act 2010. This article examines the three broad categories of franchises in Australia.

System Franchise

System franchises (or business format franchising) are the most common form of franchising in Australia. Examples of industries where system franchises are most common include fast food outlets, service industries (e.g. dry cleaners and laundries) and accommodation industries. In this form of franchising, the franchisor has developed a unique or individual manner of doing business or conducting commercial processes. In these systems, the franchisor permits the franchisee to use the system in the operation of the franchisee’s business.

This type of franchising is also a method of marketing goods and services utilising a successful business format. In entering this franchise arrangement, the franchisor sells the franchisee the right to use the business format, which will usually tie the name or trademark of the business, product or service. In return, the franchisee typically pays a fee usually based on a percentage of turnover, to the franchisor for advertising and support services.

The amount of control exercised by the franchisor can range from granting only use of the trade mark and the pattern of doing business, to the ability to sell goods and services provided by the franchisor exclusively. Consequently, it is common for the franchisor to act as the principal supplier of the assorted products used in the business. Make sure your franchise agreement and supplier agreement clearly set out the obligations of both parties.

Product Franchise

A product franchise is where a distributor franchisee acts as an outlet. Typical examples of product franchises in Australia include fuel stations, convenience stores and motor vehicle dealerships. This can be in the form of wholesale, retail or otherwise, for the products or services of the manufacturer franchisor. Under most product franchise arrangements, the distributor franchisee is granted the exclusive right to sell the product within a particular geographic market.

Processing or Manufacturing Franchise

Manufacturing (or processing) franchise systems are an arrangement where the franchisor provides technical know-how or ingredients on how to produce, manufacture or process a particular good or service. This is most common for processor or manufacturer franchisees. In Australia, processing or manufacturing franchise systems are most evident in the food and drinks industry.


One of the biggest benefits of running a franchise is that the franchisee benefits from the name, reputation and goodwill already created by the franchisor. Each type of franchise system is different, and it is important to remember every franchise agreement is different. Speaking to a franchise solicitor will assist you in understanding your rights and obligations. Call LegalVision today on 1300 544 755 – we provide fixed-fee quotes and high-quality legal advice from our team of experienced franchising lawyers.

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

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