What You Need to Know Before Buying or Owning a Franchise?

Franchising is becoming a more popular way to enter the business market in Australia as more American brands want are seeking development in Australia. There are many things to consider before owning a franchise business including all of the legalities. Luckily, PB Lawyers are experienced franchise lawyers that have more than 25 years of experience in business law including franchising.

So, maybe you are considering owning the next Starbuck or a local Mad Mex or even a department store like The Good Guys, what do you need to know about franchising? What should you consider before franchising? Here are some things that the team at PB Lawyers recommends you consider before opening up a franchise for the first time.

Firstly, think about why you want to own or buy a franchise. Is it because the brand is popular? There is a demand in your area? Or is it as simple as you want to turn a profit without the small business stress? Knowing why you want to franchise will help you know what to look for in franchisors and will help the team at PB Lawyers represent you better to the potential franchisors.

Secondly, what is the end goal? Long term objectives are important for any business structure because it maps out the desired KPIs and strategies that need to be developed. It is particularly important for franchises because of the additional costs and documentation involved in owning this type of business. It will also help with the research of franchise businesses that interest you, and help your consultant or lawyer understand your position and work with you for the best deal possible.

Cost-Benefit Analysis

- Cannot control the reputation of the overall brand- Standardised procedures and setups including
- Agreement costs including parts of the profit- National Advertising Power and the ability to locally advertise.
- Maintain Inventory- Reduced Risk in Investment
- Uniforms
- Technical Set-Up and Maintenance including POS, operating equipment, regular technology improvements.
- Market Research and Development of Products or Services

Thirdly, think about what you have and what you need to own a franchise. Potential franchisees that have done their research usually have a good business sense and understand some setup procedures. However, things that you will need to consider are your negotiation skills, and financial records, and how they will translate to potential franchisors. If you struggle with how to negotiate, hire a PB Lawyer that specialises in franchising to help you with the process and even teach you how to get some of the things you want/need. Additionally, when considering potential franchisors, look into what training is provided by the franchisors for yourself, management staff and regular employees, this could be the difference between a successful franchise and an unsuccessful franchise.


Finally, if you haven’t already considered hiring a lawyer to discuss the franchise agreement and disclosure policies of your new franchise. This is an important action to undertake as a lawyer can explain all of the terms to you in simple English, advise you on what you need to consider before signing this agreement, and make sure you are not being exploited by the franchisor.

To get in contact with PB Lawyers call 1300 510 690 or send us an email and we will get back to you as soon as possible.

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