Franchise earnings claims explained
If a franchisor shows you an income figure, the law requires it to stand behind it. Here is how earnings claims work, and how to read them.
What is a franchise earnings claim?
What the Code requires
- A franchisor may choose to make no earnings claim at all, this is common and lawful.
- If it makes one, it must have a reasonable basis for the figure.
- It must provide the assumptions and material facts behind the claim in writing.
- Misleading earnings representations can breach the Code and consumer law, enforced by the ACCC.
How to read an earnings claim
Treat any figure as a starting point to verify, not a promise. Ask for the written assumptions, whether the figure is revenue or profit, for how many sites and over what period, and whether it reflects new or established franchisees. Then test it against what current franchisees actually tell you and your accountant's conservative model. A range with clear assumptions is useful; a single confident number with none is not.
- Guaranteed income cleaning franchises: how the offers work and what to check9 min
- What is the most profitable franchise in Australia? Why the question misleads8 min
- Solar, battery and EV charging franchises in Australia: licences, rebates and risks9 min
- Home care franchises in Australia under Support at Home: what buyers need to know10 min
- Franchise vs vending machine business: which is the better small investment?9 min
- NDIS franchises in Australia: registration, pricing and the checks to make9 min
- Health and allied health franchises in Australia: registration, referrals and the economics8 min
- How to write a franchise business plan for a bank loan9 min
Get “Franchise earnings claims explained” as a printable checklist
Plus a short, practical series on getting franchise-ready. No spam.
Frequently asked questions
Do franchisors have to provide earnings figures?
No. Under the Franchising Code 2025 a franchisor may make no earnings claim, which is common and lawful. If it does make one, it must have a reasonable basis and provide the assumptions in writing.
What must back up a franchise earnings claim?
A reasonable basis, plus the material facts and assumptions behind the figure, given to you in writing. An earnings claim without its assumptions is a warning sign, and misleading claims can breach the Code and consumer law.
Should I trust a franchisor's income figures?
Treat them as a starting point to verify, not a promise. Ask for the written assumptions, then test the figure against what current franchisees actually earn and an accountant's conservative model before relying on it.
Keep researching
Continue this question in your AI assistant, or add FranchiseScope as a preferred source on Google so more of our franchise research reaches you.
Find a franchise that fits you
Build a free buyer profile and we'll match you to franchises expanding near you, and save your progress as you research. Private by default, no account needed to keep reading.