Buying a childcare franchise in Australia after the 3 Day Guarantee: what changed and what to check

• Two layers of approval apply: National Law approvals from your state or territory regulator, then CCS approval under Family Assistance Law, which checks that the people running the business are fit and proper to handle public money.
• Regulators must decide a complete provider approval application within 60 days and a service approval within 90 days. CCS approval can only follow National Law approval, and there is no set timeframe for it.
• At 1 July 2026, 15,805 services (92% of those with a quality rating) were rated Meeting National Quality Standard or above, and 78% of the 7,200 approved providers ran a single service.
• Child safety rules tightened from 2025, with powers to suspend or cancel CCS funding, a national early childhood worker register, mandatory child safety training and maximum National Law penalties tripled from 1 January 2026.

Several national changes since 2025 affect how a childcare business earns revenue and what it must prove to keep its funding. In date order:

1. 1 April 2025: new providers applying for CCS approval must supply a statement of tax record as part of the fit and proper assessment.
2. 2025: the Early Childhood Education and Care (Strengthening Regulation of Early Education) Act 2025 made quality and safety a key requirement for seeking or keeping CCS approval, and gave the power to suspend or cancel CCS funding for services that fall short.
3. 2025: the Early Childhood Legislation Amendment (Child Safety) Act 2025 increased maximum penalties and infringements and expanded regulators' powers.
4. 1 January 2026: maximum penalties under the National Law and National Regulations tripled.
5. 5 January 2026: the 3 Day Guarantee replaced the activity test, giving every CCS-eligible family at least 72 subsidised hours a fortnight for each child, or 100 hours in some circumstances.
6. 1 July 2026: new CCS settings for 2026–27, including a 90% subsidy for family incomes up to $88,520 and an hourly rate cap of $15.19 for centre-based day care for children below school age.
7. Now: services that take the worker retention payment must pay eligible workers at least 15% above award rates and keep fee increases within a cap of 5.8% for the period to 7 August 2027.
8. From July 2027: services that are not Meeting Quality Area 2 (children's health and safety) under the National Quality Standard may have their worker retention payment funding cut or suspended.

Approvals sit with the legal entity that operates the service, so ask early whether that will be your company or the franchisor. The usual sequence is:

1. Provider approval from your state or territory regulatory authority under the Education and Care Services National Law. It is recognised nationally and lets you apply for service approvals. The regulator must decide within 60 days of a complete application.
2. Service approval for each site, which relates to the premises and the type of care provided. The regulator must decide within 90 days of a complete application.
3. CCS approval from the Department of Education under Family Assistance Law. You need National Law approval first, an ABN, a bank account in the provider's name, and fit and proper persons with management or control, backed by background checks.
4. A knowledge assessment or interview, if the regulator or department asks, on your obligations under the National Law and Family Assistance Law.
5. Rules that sit alongside the National Law, such as planning controls, working with children checks, health department rules and food safety requirements.
6. If you buy through a trust, the trustee applies, because a trust isn't a legal entity. A provider that will run 25 or more services must also show it is financially viable.
7. Operating conditions once approved: centre-based day care must operate for at least 48 weeks a year, and outside school hours care for at least 7 weeks.

Staff are the largest cost in a childcare service, and the law sets the minimum. Revenue depends on fees, occupancy and how much of each fee the subsidy covers.

• Centre-based ratios are 1:4 from birth to 24 months in every state and territory, and 1:5 from 24 to 36 months (1:4 in Victoria).
• From 36 months to preschool age the ratio is 1:11 in the ACT, the Northern Territory, Queensland, South Australia and Victoria, and 1:10 in NSW, Tasmania and Western Australia. Ratios are calculated across the whole service, not room by room.
• The National Quality Framework also sets minimum qualifications, including when a service needs an early childhood teacher.
• Early childhood workers are generally covered by the Children's Services Award 2010 or the Educational Services (Teachers) Award 2020. If you opt into the worker retention payment, your workplace instrument must pay at least 15% above award rates.
• The same payment caps fee growth, so model wage costs against fees that can't rise faster than the cap.
• A family's CCS percentage applies to your hourly fee or the hourly rate cap, whichever is lower. Fees above the cap ($15.19 an hour for centre-based day care for children below school age from 1 July 2026) widen the gap fee families pay.
• Staffing waivers are a signal to check: at 1 July 2026, 4.3% of services held one, which providers can seek when they can't meet staffing requirements.

FranchiseScope doesn't publish Register benchmarks for childcare: its childcare category has Register profiles for only five early learning centre franchisors, and only three of them disclose setup costs, too few for a reliable median. Check each franchisor's own profile instead. Every profile must answer the same questions, including:

• How many years the franchisor has operated in Australia, and how many outlets it has.
• Its estimated start-up costs, upfront payments and ongoing payments to the franchisor and to others.
• Whether the franchisor, its associates or their directors have a serious offence conviction in the last 10 years, a relevant civil judgment in the last 5 years, or a history of bankruptcy or insolvency.
• Whether you must buy goods or services only from the franchisor or suppliers it nominates.
• Whether the franchisor can change the agreement on its own, and whether disputes can go to arbitration.
• The agreement term, renewal rights, what happens to goodwill at the end, and whether a restraint of trade applies.

Ask the franchisor for a full cost list, then test each line with current franchisees and your own accountant.

• Premises: long day care usually needs a purpose-built or converted building with outdoor play space. If the franchisor or an associate leases the site to you, it must give you the head lease or a summary of its commercial terms before you sign.
• Lease and term fit: compare the lease term with the franchise term. For agreements entered into from 1 November 2025, the agreement must give you a reasonable opportunity to make a return on any investment the franchisor requires.
• Fit-out, furniture, learning resources and play equipment, plus any significant capital expenditure the franchisor expects during the term, which disclosure documents created from 1 November 2025 must describe.
• Wages during ramp-up: a new service must meet staffing rules from its first day, while enrolments may build slowly, so budget working capital for that period.
• Franchise fees: royalties, marketing levies and technology fees. Ask what revenue each fee is calculated on, including whether CCS counts.
• Compliance costs: mandatory child safety training for all staff, workforce register reporting, CCS software, insurance and professional advice.

• Occupancy or earnings projections that aren't set out as earnings information in the disclosure document, or that the franchisor can't show a reasonable basis for.
• No clear answer on which entity will hold the provider, service and CCS approvals, or what happens to them if you sell or leave.
• Network services rated Working Towards NQS or Significant Improvement Required, or with enforcement actions or conditions shown on StartingBlocks.gov.au.
• A fee plan that assumes increases above the fee growth cap while also counting on the worker retention payment.
• A lease that outlasts the franchise agreement, or a franchise term too short to recover the fit-out.
• Sites that keep changing hands. The disclosure document must list three years of transfers, closures and terminations, with former franchisees' contact details unless they have opted out.
• Pressure to sign quickly. The franchisor can't sign until 14 days after you receive the disclosure document, a copy of the Code and the agreement in its final form, and any payment in that window must be refunded within 14 days of your written request.

• Confirm who will be the approved provider, and start the National Law and CCS approval steps early.
• Check each network service's quality rating, compliance history and any conditions on StartingBlocks.gov.au.
• Compare the franchisor's Register profile with its disclosure document, remembering that Register answers are self-reported.
• Build a staffing model for your licensed places using the ratios and qualification rules for your state or territory.
• Test fees against the hourly rate cap, local competitors and the fee growth cap.
• Read the lease and the franchise agreement together, including terms, renewal options and make-good obligations.
• Ask current and former franchisees about enrolment ramp-up, staff turnover and franchisor support during assessment and rating.
• Get independent legal, accounting and business advice before you sign.