FKINP Before signing, a prospective franchisee should receive written advice identifying material legal risks, their commercial consequences, proposed changes and any issues requiring further due diligence.[2][4] The Franchising Code then gives at least 14 days to consider the documents before the franchisor can sign, and usually a further 14-day cooling-off period after signing.[7]
Compare the review scope before choosing a provider
Compare providers on three points: the written deliverable, negotiation and follow-up, and the fee model.
Minerva Law
- Written deliverable: A written risk memo ranks material risks by commercial cost, identifies amendments worth requesting and is followed by a call.[4]
- Negotiation and follow-up: The call is included. Putting proposed amendments to the franchisor is a separate scope with a separately quoted fee.[4]
- Fee model: A fixed fee is quoted before work begins for a defined scope, with cost depending on the documents and complexity.[4]
Beger & Co Lawyers
- Written deliverable: The stated minimum service covers the agreement, disclosure document, franchise system and territory, followed by a meeting about findings and recommendations.[5]
- Negotiation and follow-up: A recommendations meeting is included.[5]
- Fee model: The firm describes a fixed fee tailored to the matter.[5]
West Perth Legal
- Written deliverable: Advice or drafting may be delivered by email.[6]
- Negotiation and follow-up: Instructions can be taken by telephone or teleconference, with an optional face-to-face meeting.[6]
- Fee model: Fixed fees are offered where possible, with an obligation-free quote based on the circumstances and complexity.[6]
Minerva specifies a risk-ranked memo and separates negotiation from the review.[4] Beger includes system and territory due diligence, business-structure discussion and asset-protection considerations.[5] West Perth Legal lists fees, territory, renewal, termination and exit among its review subjects and offers remote delivery.[6] None of the three cited pages states a dollar price.[4][5][6]
Documents to give the lawyer
Provide the transaction documents together rather than sending only the franchise agreement. ASBFEO recommends considering the agreement and disclosure materials alongside professional advice and the buyer’s own inquiries.[2]
- the franchise agreement in the form in which it is to be signed, and any later changed version;
- the disclosure document and the copy of the Franchising Code the franchisor gave you;
- any premises lease, sublease or occupancy terms;
- other related agreements the franchisor requires, such as equipment leases, intellectual-property licences, guarantees, loan or security agreements, confidentiality agreements and post-term restraints; and
- any earnings information the franchisor has provided.[7]
The Code requires the franchisor to give you the agreement, the disclosure document and a copy of the Code before signing, and to give those related agreements at least 14 days before signing if they are available.[7] The Key Facts Sheet used under the old Code is no longer required for agreements under the new Code.[8]
Also provide the proposed signing deadline and identify missing documents. Minerva asks for the documents and deadline before confirming scope, fee and timing.[4] Include written financial claims or answers already received from the franchisor; ASBFEO recommends asking about unclear matters and obtaining answers in writing.[2]
Ask for issue-by-issue written advice
A written assessment should identify each material issue, explain its practical consequence, list questions requiring written answers and identify amendments worth requesting.[2][4]
Ask the lawyer to address:
- fees, payment obligations and benefits received;
- territory and exclusivity;
- training, operational support and marketing contributions;
- agreement duration and renewal;
- transfer, sale, termination and other exit routes;
- guarantees, security and lease obligations;
- franchisor or franchisee insolvency;
- dispute-resolution processes; and
- payments or other obligations continuing after exit.[2][4][6]
For territory, ask what is protected, what remains non-exclusive and how territory changes could affect the business. Minerva says its review considers territory protection, while ASBFEO identifies territory changes as an issue buyers should examine.[2][4]
For renewal, ask the lawyer to explain the relevant conditions and consequences. West Perth Legal expressly lists agreement duration and renewal among its review subjects.[6]
Early-exit advice should cover the practical effect of consent and buyout provisions. ASBFEO warns that a franchisor must act in good faith but need not act in the franchisee’s commercial interests; it may withhold consent to a sale or propose a buyout on less favourable terms.[2]
Restraints are among the related agreements the Code expects you to receive before signing.[7] Ask the engagement to explain any restriction applying during and after the franchise and its practical effect on your next business.
Separate legal review from accounting and due diligence
A legal review is not an assessment of whether the franchise will be profitable. A franchising lawyer can explain agreement clauses and legal exposure, while an accountant or business adviser can test financial assumptions and the investment opportunity.[2] Beger & Co also recommends obtaining independent legal and accounting advice.[5]
The Code builds the same split into signing. For a new franchise, the franchisor must not enter the agreement until it has a signed statement for each of an independent legal adviser, business adviser and accountant — either the adviser confirming advice was given, or you confirming you received that advice or chose not to obtain it.[7] Ask your lawyer which of these statements they will sign and what their advice covers.
The prospective franchisee remains responsible for:
- reading and understanding the agreement, disclosure materials and professional advice before committing;[2]
- conducting inquiries into the franchise system and territory;[2]
- comparing promised benefits with obligations and payments;[2]
- understanding dispute processes and the consequences of changes to the business, ownership or territory;[2]
- assessing whether ongoing and early-exit payment obligations can be met.[2]
The franchisor is the other contracting party and cannot provide independent advice. Unclear matters should be raised with the franchisor and answered in writing.[2] Disclosure and regulation support informed decisions but do not protect a buyer from a poor business decision.[2]
Know the Franchising Code timings
The current Code is the Competition and Consumer (Industry Codes—Franchising) Regulations 2024. It applies to franchise agreements entered into, renewed, extended or transferred on or after 1 April 2025.[8] Ask the lawyer to confirm which provisions apply to your transaction, because some requirements started later, on 1 November 2025.[8]
- 14-day consideration period: the franchisor must not sign until 14 days after the latest of giving you the required documents, giving you a materially changed agreement, or giving you earnings information.[7]
- Payments during that period: if you pay the franchisor or an associate during the consideration period and then ask in writing for the money back, the franchisor must repay it within 14 days of your request.[7]
- 14-day cooling-off: you may terminate a new franchise agreement within 14 days after entering it. Only a franchisee who has, or recently had, a substantially similar agreement with the same franchisor can opt out of this period.[7][8]
Plan the legal review to finish inside the consideration period, so any amendments can be negotiated before the agreement is signed. Use Australian terminology — disclosure document and Franchising Code — and do not rely on overseas franchise guides for these timings.
What to confirm with each provider
Before accepting a quote, ask for written confirmation of:
- the documents and issues included in the review;
- the form of the written advice and whether it identifies proposed amendments;
- whether the lawyer will sign the Code’s independent legal adviser statement;
- the number and format of follow-up discussions;
- whether negotiation and review of revised documents are included;
- the dollar fee, fixed-fee assumptions and additional-fee triggers;
- turnaround that fits inside the 14-day consideration period;
- service location: Beger’s page names Adelaide, West Perth Legal identifies Perth, and Minerva’s cited page does not state a city, state or nationwide service area;[4][5][6]
- cancellation and refund terms, conflict checks, professional-indemnity arrangements and engagement duration, which the three cited pages do not state.[4][5][6]
The engagement should ultimately specify the documents covered, the written work product, the issues assessed, the follow-up provided and where negotiation begins to attract another fee.
References
- Read the franchise agreement — ASBFEO (asbfeo.gov.au)
- Franchise Agreement Review — Minerva Law (minervalaw.com.au)
- Independent Legal Advice Before Buying a Franchise Business — Beger & Co Lawyers (beger.com.au)
- Franchise Agreement Legal Review — West Perth Legal (westperthlegal.com.au)
- Competition and Consumer (Industry Codes—Franchising) Regulations 2024 (F2024L01605) — Federal Register of Legislation (legislation.gov.au)
- New Franchising Code of Conduct — Table of key changes (March 2025) — Treasury (treasury.gov.au)
