How to find franchises for sale near you, and vet them

• Every resale goes through the franchisor, which must reply in writing and must not unreasonably withhold consent (s49).
• Ask any broker who engages and pays them. If the franchisor pays someone to introduce or recruit franchisees, item 5 of its disclosure document must name them.
• The franchisor must give you the ACCC's information statement within 7 days of your formal application or expression of interest, because a buyer taking over by transfer counts as a prospective franchisee (s22).
• Ask for the site or territory's 10-year history (item 13), which covers earlier franchisees and why they stopped trading.
• After an assignment, you can unwind the purchase by written notice before 14 days pass or before you take control of the business, whichever is earlier (s52).

• The franchisor. Ask each brand you like for its current resales. Because every transfer needs its consent, the franchisor often knows early which owners plan to sell.
• FranchiseScope's resale marketplace (For Sale). Resales there are listed by the franchisor with no commission, so each listing has gone through the brand. Listings appear as franchisors publish them.
• FranchiseScope's opportunity listings. You can build a free buyer profile to apply, and your name and contact details stay private until you choose to connect.
• Business brokers, including those who specialise in franchise resales. A broker acts for whoever engages and pays them, so do your own checks.
• General business-for-sale websites, where franchises sit alongside independent businesses. Confirm with the franchisor that a listing is current before you spend money on due diligence.
• Owners you meet. Some franchisees sell to someone they know before advertising, so tell the franchisees you speak to that you are looking.
• New territories. If no resale suits, FranchiseScope's open territories page shows the states where brands told the Register they intend to expand.

1. Start with a map, not a brand: list the suburbs you would work in or commute to, and the travel time you can live with.
2. Walk or drive those areas and note the franchise brands already trading there. They are your most likely resale candidates.
3. Search the Franchise Disclosure Register by industry, filter by the states where franchisors operate, and contact brands directly about resales near you.
4. Use FranchiseScope's location reports to check population, growth and competition in each area before you look at a particular business.
5. Set alerts where marketplaces offer them, and recheck franchisor resale lists every few weeks.
6. For territory-based businesses such as home services, get the territory boundary on a map before comparing prices. Item 9 of the disclosure document says whether the territory is exclusive and whether the franchisor can change it.

A resale either assigns the seller's existing agreement to you or ends it so you can sign a new one. The Code sets the order of events.

1. The seller asks the franchisor in writing to consent, with the information it would reasonably need to decide (s48).
2. The franchisor gives you the ACCC's information statement within 7 days of your formal application or expression of interest (s22).
3. It gives you the existing agreement, any other documents you must sign, lease documents if it or an associate will sublease the premises to you, and the current disclosure document with a copy of the Code (s24). Only repeat franchisees with a substantially identical agreement can opt out of the last two.
4. It can't consent until 14 days after giving you those documents, or after giving you earnings information if that comes later (s24(3)).
5. It replies in writing with any conditions, or reasons if it refuses. It must not unreasonably withhold consent, and if it hasn't refused in writing within 42 days of the request, or of receiving the last information it asked for, consent is deemed (s49).
6. If the deal involves a new agreement between you and the franchisor, the new-agreement rules apply instead, including the 14-day consideration period and cooling-off (s23 and s50).
7. After an assignment, you can unwind it by written notice to the seller and the franchisor before 14 days pass or before you take possession and control, whichever is earlier. Each must refund what you paid them within 14 days, less reasonable expenses the relevant agreement sets out (s52 and s53).

The Code lists circumstances in which refusing or revoking consent is reasonable (s49(6)). The list isn't exhaustive, so ask early what the franchisor looks for.

• You are unlikely to be able to meet the financial obligations under the agreement.
• You don't meet a reasonable requirement in the agreement for a transfer.
• You don't meet the franchisor's selection criteria.
• You won't agree in writing to comply with the franchisee's obligations under the agreement.
• The seller hasn't paid, or made reasonable provision to pay, money it owes the franchisor.
• The seller hasn't fixed a breach of the agreement.

• A seller who wants a deposit or a signed contract before the franchisor has given you any documents.
• An asking price built on 'potential' rather than trading records your accountant can check.
• A listing the franchisor doesn't know about, or a franchisor that says consent is unlikely.
• Several resales in the same system or area at once. The ACCC warns that high turnover across a system can mean it expanded too quickly or without a plan (burning).
• A short remaining term with no option to renew. The disclosure document must say so in a bold statement (item 18).
• A broker or seller who discourages you from calling other franchisees or getting independent advice.
• A price far below similar businesses in the same system. There is usually a reason, and you need to find it before you pay.

• Remaining term and renewal: the years left, and whether item 18 gives you an option to renew.
• Transfer terms: whether the franchisor will amend the agreement on transfer (item 19), and the fees you and the seller will pay (item 14).
• Lease: the remaining term, options, rent reviews and whether the landlord will consent to an assignment.
• Trading records: at least 2 to 3 years of profit and loss statements, BAS and bank statements, reviewed by your accountant.
• Earnings information: if the franchisor gives you any, the 14-day wait restarts from that day (s24(3)).
• Capital expenditure: any refit or upgrade the disclosure document flags for the remaining term (items 14(1A) and 14(1B)).
• Site history: earlier franchisees at the site in the last 10 years and why they stopped. The ACCC's guidance says item 13 should give each one's name, the year they stopped and the reason.
• Staff: who is staying, their award classifications and pay, and how accrued leave is being handled in the sale.
• Franchisee view: calls to current and former franchisees from item 6, not just the seller's referees.