The ACCC is only one source of information for people thinking of buying a franchise. There are two other important sources that we recommend you consider.
Invest in advice
Make sure you get independent professional advice before you buy a franchise. Professional advice may help you avoid signing up to a poor business opportunity.
Lawyers, accountants and business advisors can each help you understand franchising from different perspectives. One type of advice may not be enough.
Advice from professionals who are working for you may help you discover risks and issues you might not otherwise see.
It is essential to talk to current and former franchisees
Current and former franchisees are a very important source of information about the franchise. They know how the franchise system works in practice. They can tell you if they are happy with their franchise and the support provided by the franchisor.
Don’t just rely on the people the franchisor recommends. Your disclosure document should include contact details for all current franchisees, and former franchisees from the last three financial years who have agreed to provide contact details. Consider it a red-flag warning about the franchise if there are no contact details or it’s too hard to make contact with former or current franchisees.
Getting advice and speaking with other franchisees in advance should give you greater confidence in your decision, irrespective of whether or not you sign up.
More information is on our website: www.accc.gov.au/buyingafranchise
The information in this article is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a statement of the law in any jurisdiction. As it is intended only as a general guide, it may contain generalisations. You should obtain professional advice if you have any specific concern.
Author: Kristie Piniuta is the ACCC Director of Small Business & Industry Codes