Buying a Franchise in Australia: Check Equipment Ownership

A franchise may come with coffee machines, workshop tools, refrigeration or mobile equipment, but access is not the same as ownership. Before buying a new or existing franchise in Australia, establish exactly which assets you are paying for and whether you can legally use them from opening day. This focused check can prevent an apparently complete business purchase from leaving you without essential equipment.

1. Separate the franchise rights from the physical assets

A franchise agreement gives you contractual rights to operate within a brand’s system. Do not assume it also transfers ownership of everything shown in a brochure, demonstrated during a visit or listed in a seller’s presentation.

Ask for an equipment schedule identifying each essential item, its location and its legal owner. For higher-value assets, request make, model and serial number details. Separate the list into:

• Equipment you will purchase outright.
• Equipment owned by the franchisor and provided for your use.
• Equipment leased or hired from another business.
• Equipment supplied on loan or under another commercial arrangement.
• Equipment you must obtain separately before opening.

For an existing outlet, reconcile this schedule against the business sale contract. For a new franchise, compare it with the fit-out quotation and any equipment package.

Descriptions such as “fully equipped” are not a substitute for a precise inventory. Ask the seller to identify anything displayed on site that is excluded from the transaction, including spare equipment and accessories needed to operate the main machines.

2. Verify ownership and any finance attached

Invoices and purchase records can help establish how an asset was acquired, but an invoice alone does not demonstrate that it is free of finance or other claims.

Australia’s Personal Property Securities Register, or PPSR, records security interests in personal property, which can include business equipment. A security interest may give a lender or another party rights over an asset. This is separate from the government’s Franchise Disclosure Register, which provides information about franchise systems rather than equipment ownership.

Ask your solicitor to decide which PPSR searches are appropriate, interpret the results and check whether any relevant interests need to be released before settlement. Search requirements vary according to the asset and transaction; do not assume that searching a machine’s serial number is always sufficient.

Where equipment is financed, ask for a clear settlement process. Who obtains the payout figure? Who pays the financier? What evidence confirms that the relevant security has been released?

For hired or leased assets, establish whether the provider will agree to a transfer or requires a new contract. The seller’s permission to use equipment does not necessarily allow you to take over that arrangement. Make any essential approvals part of the purchase conditions your solicitor negotiates.

3. Check the cost of keeping equipment usable

Ownership matters, but so does the ability to keep trading. Arrange an independent inspection where the value or operational importance justifies it, and ask for maintenance records, warranty details and any outstanding repair reports.

Build a separate equipment cost schedule covering:

• Purchase or upfront hire charges.
• Recurring rental or finance payments.
• Installation, delivery and commissioning.
• Servicing, inspections and consumables.
• Insurance obligations and policy excesses.
• Removal or return costs for assets you do not own.

Confirm whether warranties and service agreements transfer to you. Ask who pays when essential equipment fails and whether replacement equipment is available during repairs. Treat any promised assistance as something to document, not an automatic benefit of joining a franchise community.

Also check compatibility. A machine may function properly but require software access, a subscription or a service account that is not included in the sale. Identify those dependencies before agreeing that the equipment package is complete.

4. Put the equipment position into the contracts

Australia specifically regulates franchising through the mandatory Franchising Code of Conduct. A new Code commenced on 1 April 2025, with some rules applying from 1 November 2025. The Australian Competition and Consumer Commission oversees compliance, and the Australian Consumer Law also applies.

Franchisors must provide prescribed pre-contract information, including the disclosure document and franchise agreement. Review the equipment obligations in those documents alongside the asset schedule, sale contract and any hire agreements. Disclosure does not itself prove that a seller owns an asset outright.

Ask your solicitor to resolve inconsistent descriptions and document the agreed ownership, transfer arrangements, condition requirements and responsibility for outstanding payments. Confirm what happens if essential equipment cannot be transferred or is missing at handover.

Practical takeaway: Before committing, obtain a verified equipment inventory, a clear account of ownership and finance, and contractual protection for the assets you need to trade. Pay for an agreed package—not an assumption about what comes with the franchise.