The franchisor holds the leverage.
Selling or buying a franchise works like other business sales, with extra steps driven by the franchise relationship. The franchisor normally has to consent to the transfer, and it holds real leverage, because its consent can come with conditions of its own, such as the buyer completing training, upgrading the premises or fit-out, or signing a fresh franchise term. Completion is usually made conditional on that consent, and the franchise rights and the franchise agreement transfer with the business, so the buyer takes on the franchise system and its obligations.
Disclosure is layered.
The franchisor's disclosure obligations under the Franchising Code of Conduct sit on top of the Victorian small business disclosure under the section 52 statement, so a franchise sale can involve more than one disclosure regime at once. The lease is frequently tied to the franchise as well, which brings the lease assignment and the landlord's consent into the mix alongside the franchisor's.
Understand the franchise before the price.
Because the franchisor controls whether and how the transfer happens, and on what terms, it pays to understand the franchise agreement and the franchisor's requirements early, before the price and the timetable are locked in. We handle franchise transfers, including the franchisor consent and the lease, through our dedicated franchise sale and purchase service.
The franchisor's consent can carry conditions of its own, from training and upgrades to a new franchise term for the buyer. Price and timetable should be agreed with those in view, not before.
Law referenced: Franchising Code of Conduct.