Signing a franchise agreement is one of the most consequential financial commitments a new entrepreneur can make. In 2026, stronger disclosure laws and a wider range of financing options mean buyers have more protection, but only if they use the available tools.
Updated Code: What Changed for 2025-2026
The Franchising Code of Conduct, enforced by the Australian Competition and Consumer Commission, continues to evolve. Current requirements include a mandatory Key Facts Sheet, a public Franchise Disclosure Register, a 14-day cooling-off period and substantially higher penalties for serious breaches. The Key Facts Sheet is designed to give prospective franchisees a concise, standardised summary of upfront and ongoing costs, territory rights, supply restrictions and dispute resolution processes. It reduces the ability of franchisors to bury unfavourable terms in lengthy contracts.
Disclosure Register and Key Facts Sheet
Before signing, new entrants should search the Franchise Disclosure Register to check a franchisor’s litigation history, contact details and number of former franchisees. The Key Facts Sheet must be provided early in the process, allowing side-by-side comparison of different systems. If a franchisor is slow to provide these documents or pressures you to sign quickly, treat that as a red flag. The cooling-off period means a franchisee can withdraw within 14 days after signing or paying non-refundable money, provided they have not taken possession of the premises or business.
Financing Options and Bank Expectations
Australian lenders assess franchise applications partly on the strength of the franchise system. Banks and non-bank lenders may offer secured business loans, equipment finance, franchisor in-house plans or government-guaranteed SME loans. Most require a cash contribution of 30–50 percent and a realistic cash flow forecast. The Australian Government’s business portal provides practical guidance on planning, buying and running a franchise, including links to state and federal resources: https://business.gov.au/. New owners should also ask the franchisor whether it has accredited relationships with lenders, as this can speed approval but does not replace independent financial advice.
Pre-Signing Checklist for New Franchisees
Before committing, complete a structured checklist. Obtain independent legal and accounting advice. Read the disclosure document and Key Facts Sheet line by line. Verify earnings claims with documented evidence from at least five current franchisees. Confirm the territory is exclusive or understand any competition from other franchisees and online channels. Review the lease, supply agreements, marketing fund obligations and exit clauses. Check the franchisor’s litigation history in the Disclosure Register. Finally, compare at least three franchise systems in the same sector. These steps will not eliminate risk, but they transform a blind commitment into an informed business decision.