Franchising Q & A

Franchising Q & A

How do I assess a franchise business?

The 3 key points to buying a franchise are as follows.

• Evaluate yourself.
• Evaluate the system.
• Seek professional advice.

In evaluating yourself and the system, it can help to answer the following questions.
1. Has sufficient testing of the system taken place?
2. What is the selection criteria?
3. Does the franchisor have sufficient capital to allow for growth, profit lead times and other contingencies?
4. What are the franchisor’s credentials?
5. What is the background of the franchise system?
6. What are your financial expectations?
7. Is the agreement fair, reasonable and legal?
8. How do I finance my business?

Once you’ve answered as many of these as you can, then it’s time to move to the next steps!

Should I seek legal advice?

It’s very important to have appropriate advice when reviewing any new business opportunity. If you wish to engage a solicitor, you need to find one experienced in franchise agreements to work with you to assess the fairness of the proposed franchise contract. In most cases much of the contract may be non-negotiable. You need to evaluate whether the terms and conditions of the contract are acceptable to you and to identify areas that may need to be addressed with the franchisor.

Firstly you must find out if you can afford to buy the franchise. Ask the franchisor if they have any affiliations with lending institutions and if so what are they. There are many financial institutions that provide franchisee funding and advice.

If I want out, can I get out? Can I sell the franchise?

Yes. A franchise business can be sold like any other ongoing concern.

Are there any guarantees?

No. Like all businesses a franchised business can also fail. To be successful a franchisee must follow the franchise business system; with commitment and enthusiasm. Being part of a franchise group makes being in business a lot easier. A franchisor provides the tools, know how, support, business system and brand, it is up to the business owner to make that work to their advantage. There is no doubt that joining a proving winning business greatly increases your opportunity for success!

Additional Key Information

Legal Considerations
A prospective franchisee must seek professional advice from qualified and experienced advisors. There are several legal and regulatory areas that impact on franchising. Generally, franchising is regulated under the same general law provisions that govern all commercial activities The Competition and Consumer Act 2010 is the primary legislation governing franchising. Franchising is regulated by the Franchise Code and monitored and regulated by the A.C.C.C.

The Franchising Code of Conduct
Introduced in 1998 to regulate the franchise sector and introduce standard protections for franchisees. Requires franchisors to provide a mandatory disclosure of information about the business. Potential franchisees should read the Franchise Manual provided by the ACCC as it summarises the Code and will help you to understand how it works before buying a franchise. We supply this to you as part of our business information pack.

The Disclosure Document
A franchisor must provide a prospective franchisee with a copy of the code of conduct and the disclosure document.
The information disclosed covers issues relevant to the commercial aspects of the franchise and relevant history that you need to know about your new business partners.


Dreaming of getting out from under your boss and building your own empire? Franchising is a great start for the life of a business owner. Our company prides itself in doing franchising right and we follow the regulations set down by the Franchising Code of Australia. Speak to our team members to get the lowdown directly from them.

  • Franchisor knowledge and experience
  • Comprehensive training and on going support
  • Easier access to finance
  • Sharing of marketing materials and ideas
  • Ongoing research & development.