How To Sell My Franchise Business in Australia

Review Your Franchise Agreement

Before you do anything else, read your franchise agreement carefully. This legally binding document between you and your franchisor outlines the specific conditions that apply when transferring ownership. Under Australia’s Franchising Code of Conduct, franchisors have defined rights around the sale of a franchise – and these vary significantly from one brand to another. Look for clauses covering written consent requirements, transfer fees payable to the franchisor, rights of first refusal, training obligations for the new owner, and the process for assigning the franchise agreement. If anything is unclear, speak with a franchise lawyer before proceeding.

Get Franchisor Consent Early

Most franchise agreements in Australia require written consent from the franchisor before you can advertise or sell your franchise. The franchisor has the right to approve or reject a prospective buyer — but under the Franchising Code of Conduct, that approval cannot be unreasonably withheld. Start this conversation as early as possible. Some franchisors have a formal process with set timelines; others are more flexible. Either way, delays in franchisor approval are one of the most common reasons franchise sales stall or fall through entirely.

Prepare Your Disclosure Document

Before a buyer can formally commit to purchasing your franchise, you are required to provide a Disclosure Document – a legally mandated document under the Franchising Code of Conduct. It outlines key information about the franchise including financial performance history, details of the franchise network, any existing litigation, and information about the franchise agreement itself. Your franchisor should be able to assist with this document, or a franchise lawyer can prepare one on your behalf. Buyers are entitled to at least 14 days to review the disclosure document before signing any agreement.

List All of Your Assets

Just like any other business sale, preparation is essential. As a franchise seller, you should prepare a detailed asset register for the buyer. This should include all physical assets such as equipment, fit-out, vehicles, and stock on hand, as well as intangible assets like customer databases, supplier agreements, and any intellectual property you own outright. Having a thorough, well-documented asset list builds buyer confidence and helps justify your asking price. Your franchisor may also require a copy of this as part of the approval process.

Value Your Franchise Correctly

Valuing a franchise differs from valuing an independent business. As well as standard methods like capitalised earnings and EBITDA multiples, buyers and their accountants will factor in the remaining term of your franchise agreement – and whether a renewal is likely. Other key considerations include the royalty structure, the strength of the brand in your territory, the size and exclusivity of your territory, and the overall health of the franchise network. An overpriced franchise will sit on the market; an underpriced one costs you tens of thousands. If you are unsure, our consultants can provide a free valuation guide.

Leasing Details

Check your current lease agreement carefully if you are renting the business premises. Look for any assignment clauses – most commercial leases require landlord consent before you can transfer the lease to a new tenant. Some leases have personal guarantees attached; your solicitor can advise on whether these carry over to the buyer or terminate on settlement. Factor in the lease expiry date as well – a lease with less than 12 months remaining can significantly reduce the value of the business to a buyer.

Profit and Loss Statements

Prepare at least three years of profit and loss statements, BAS statements, and tax returns. Buyers and their accountants will scrutinise these closely to verify your claimed earnings and calculate an appropriate purchase price. If your financials include non-recurring expenses or owner benefits (such as a personal vehicle or above-market salary), have your accountant prepare an adjusted, normalised P&L – this is the document that will be used to justify your asking price in negotiations.