Buying an existing franchise (a resale): what to check
A resale can be a faster, lower-risk way into a system, or an expensive way to inherit someone else's problem. Here is how to tell which.
Should you buy an existing franchise or open a new one?
What a resale gives you that a new site does not
- A trading history, you can review actual sales and costs, not projections.
- An existing customer base and trained staff, so revenue starts from day one.
- A fitted-out site, often cheaper than a greenfield build once goodwill is set fairly.
Because you can see the numbers, a resale removes much of the guesswork that makes a new site risky, provided the seller gives you genuine access to the books.
The extra checks a resale demands
A resale carries everything a new franchise does, plus the specific history of this site. Verify the seller's figures against bank statements and BAS, not just a profit-and-loss they prepared. Check the remaining lease term, the condition of the equipment, and why the current owner is really selling.
You still get the Code's protections
A resale is still a franchise transaction: the franchisor must approve the transfer, and you receive a disclosure document and the agreement, with the same 14-day disclosure period and 14-day cooling-off period under the Franchising Code 2025. Read them as carefully as a first-time buyer would.
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Frequently asked questions
Is it cheaper to buy an existing franchise or start a new one?
Sometimes. A resale avoids much of the fit-out and ramp-up cost but adds a goodwill premium in the sale price. A new site carries the full establishment cost but no goodwill. Compare the all-in figure for both, and make sure any goodwill is justified by verified trading numbers.
What should I check before buying a franchise resale?
Verify the seller's sales and costs against bank statements and BAS, check the remaining lease term and equipment condition, confirm why the owner is selling, and get the franchisor's transfer approval. You still receive a disclosure document and cooling-off rights under the Franchising Code 2025.
Do cooling-off rights apply to a franchise resale?
Yes. A resale is a franchise agreement, so the Code's 14-day pre-signing disclosure period and 14-day cooling-off period apply. Use them.
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