Franchise Purchase Accounting Advice
Thinking about buying a franchise? Before you sign anything, get an independent accountant's review of the disclosure document, the franchise agreement's fees, and whether the numbers actually stack up — so you sign with a clear-eyed view of the risk, not just the sales pitch.
Why get accounting advice before you buy a franchise
Franchise agreements are written by the franchisor's lawyers, for the franchisor. The disclosure document tells you what the law requires — it doesn't tell you whether the deal works for you financially. That's where an accountant comes in.
Fees add up fast
Royalties, marketing levies, admin fees, software and portal charges can easily total 15–20% of revenue before you've paid a single wage.
No earnings guarantee
Most disclosure documents legally cannot forecast your earnings. Without your own cash flow model, you're guessing at your own return.
The franchisor's own health
A franchisor with a thin balance sheet or a history of franchisee turnover is a risk to your investment, not just theirs.
It's a Code requirement
The Franchising Code of Conduct requires you to get accounting and/or legal advice — and to have that adviser sign a statement — before you sign.
What our franchise purchase accounting advice covers
Disclosure Document review
Franchise fees, ongoing costs, franchisee turnover history, litigation and financial disclosures explained in plain English.
Franchise Agreement fee analysis
Every royalty, levy and recurring charge mapped against your expected revenue, so you know your real effective cost base.
Franchisor financial health check
A read of the franchisor's own financial statements — solvency, capitalisation, and whether the numbers support their promises.
Cash flow & profitability forecast
A realistic month-by-month forecast built on your specific territory, fees and start-up costs — not the franchisor's marketing figures.
Risk summary in plain English
A written summary of the key financial and commercial risks, so you and your co-owners can weigh them before signing.
Signed adviser's statement
The signed accountant's statement required under the Franchising Code of Conduct before you enter the agreement.
Our process
Send us the paperwork
Share the Disclosure Document and Franchise Agreement — we'll tell you if anything else is needed.
We review & model it
We read every fee clause and build a cash flow forecast specific to your numbers, not generic assumptions.
You get a written report
A clear, jargon-free advice document covering financial risk, key contract terms, and our recommendations.
We sign off
We provide the signed accountant's statement required under the Franchising Code, ready for your file.
Franchise purchase accounting advice: FAQs
Do I need an accountant before buying a franchise in Australia?
Yes. Under the Franchising Code of Conduct, a prospective franchisee must, before signing a franchise agreement, receive a signed statement from a qualified accountant, lawyer or business adviser confirming they received advice (or that they chose not to act on it). Beyond the legal requirement, an accountant's review is the main way to pressure-test the franchisor's numbers before you commit your own money.
What does franchise purchase accounting advice actually cover?
A proper review covers the Disclosure Document (fees, franchisee turnover, litigation and financial history), the Franchise Agreement's ongoing fee structure (royalties, levies and other charges), the franchisor's own financial position, and a cash flow forecast built on your specific numbers. It ends with a written risk summary and the signed adviser's statement the Code requires.
What's the difference between the Disclosure Document and the Franchise Agreement?
The Disclosure Document is a standardised information pack the franchisor must give you — covering fees, franchisee history, litigation and financial statements. The Franchise Agreement is the actual legal contract you sign, which sets out your binding obligations, including term, termination, restraint of trade and fees. Both need to be reviewed together, because the agreement's fine print doesn't always match the disclosure document's summary.
How much does it cost to get accounting advice before buying a franchise?
Costs vary with the size and complexity of the franchise and how much modelling is needed, but franchise purchase reviews are typically offered as a fixed fee agreed upfront, so there are no surprises. Contact us with the franchise system's name and we'll give you a fixed quote before starting.
What financial red flags should an accountant look for in a franchise disclosure document?
Key things to check include: a high combined royalty and administration fee percentage of revenue, no earnings or profitability information being offered, a thinly capitalised or unaudited franchisor balance sheet, a pattern of franchisee terminations or non-renewals in the last three years, and any undisclosed related-party rebates or payments the franchisor receives from suppliers.
Do I still need a lawyer if my accountant reviews the franchise paperwork?
Yes. An accountant's review focuses on the financial and commercial risk — fees, cash flow, and the franchisor's financial position. A solicitor separately reviews the legal enforceability of clauses like termination, restraint of trade, personal guarantees and dispute resolution. Most franchisees engage both, and the Franchising Code contemplates advice from a legal adviser, accountant or business adviser.
How long does a franchise purchase accounting review take?
A straightforward review is usually completed within a few business days of receiving the full Disclosure Document and Franchise Agreement. More complex franchise systems, or reviews that include a detailed cash flow forecast, can take a little longer — we'll give you a timeframe when you send through your documents.
What should I send my accountant before buying a franchise?
At minimum: the current Disclosure Document and the Franchise Agreement (including any schedules or annexures). It also helps to provide the franchisor's Policies and Procedures Manual if available, any earnings or projection information you've been given verbally, and your own savings/funding position so we can model realistic cash flow.
Is this different from ongoing accounting for franchisees?
Yes. This service is specifically for the pre-purchase decision — reviewing the deal before you sign. If you're already operating a franchise and need ongoing BAS, tax, royalty reconciliation or compliance support, see our Accounting for Franchisees service instead.
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Before you sign, know exactly what you're signing up for
Send us the Disclosure Document and Franchise Agreement and we'll give you a fixed-fee quote for a full financial review — including the signed adviser's statement the Franchising Code requires.