Buying a Franchise in Australia: Check Staffing Costs

A franchise’s wage budget can look manageable until you translate opening hours into a lawful, workable roster. Before buying, establish who must be on site, what they must be paid and who covers absences. Within Australia’s franchising community, access to a recognised brand does not remove your responsibilities as an employer. Staffing deserves its own due diligence check, not just a line in a profit forecast.

1. Build a roster around the operating requirements

Start with the franchisor’s required trading hours and operating procedures. Ask which tasks must happen before opening and after closing, whether minimum staffing levels apply, and which roles require particular qualifications or training.

Build a sample weekly roster showing roles and paid hours rather than simply counting employees. Include:

• Opening, closing, cleaning and cash-handling duties.
• Busy periods that require additional staff.
• Meal breaks and the cover needed while staff take them.
• Deliveries, stocktakes, meetings and required training.
• Management, rostering and payroll administration.

Check the roster against the premises and service model. A business that needs someone serving customers continuously may need additional cover even when sales are quiet. Ask the franchisor to explain how its staffing model accommodates this.

If you will work in the business, identify your hours separately. Prepare both an owner-operated roster and a replacement roster for when you are unavailable. Otherwise, unpaid owner labour can conceal the true cost of keeping the doors open.

2. Price the roster using applicable employment rules

Australia specifically regulates franchising through the mandatory Franchising Code of Conduct, administered by the Australian Competition and Consumer Commission. The current Code commenced on 1 April 2025, with some requirements applying from 1 November 2025. It governs the franchise relationship; it does not replace employment law.

The Fair Work Act 2009 is a central part of Australia’s employment framework. Coverage can depend on the employing entity and location, so confirm whether the national workplace relations system or a state system applies to your proposed business.

For businesses in the national system, minimum obligations may come from the National Employment Standards, an applicable modern award or an enterprise agreement. Do not assume that the brand’s description of a role determines its award classification.

Have a qualified employment adviser or payroll specialist confirm:

• The applicable award or agreement and each role’s classification.
• Ordinary hours, overtime, penalty rates and allowances.
• Casual loadings, minimum engagements and break requirements.
• Leave entitlements and record-keeping obligations.

Then ask your accountant to add superannuation, workers’ compensation insurance and any applicable payroll tax. Use current official rates rather than copying an old franchise budget. There is no single wage percentage that proves a franchise is affordable: the roster and applicable rules must support the figure.

3. Check the evidence behind the wage allowance

Ask how the staffing allowance in any financial material was calculated. Was it based on the outlet you are buying, a comparable location or a model business? Does it include a paid manager, or assume the owner covers management duties without a wage?

For an existing outlet, request appropriately anonymised payroll summaries, rosters and records of actual hours worked, subject to privacy safeguards. Compare these with trading hours and sales patterns. A low historical wage bill is not reassuring if it reflects chronic understaffing, extensive unpaid owner work or possible underpayments.

For a new outlet, request the assumptions supporting the proposed staffing structure. Test a normal week, a busy week and a week involving staff absence. Include recruitment and induction costs, and allow for new employees needing time to become proficient.

Do not treat a franchisor-approved payroll platform as proof of compliance. Ask who sets classifications and pay rules, who updates them, and who checks exceptions. Establish which responsibilities remain with your business even where the franchisor supplies systems or guidance.

4. Resolve employment questions before committing

If you are buying an operating franchise, establish whether existing employees will be offered employment and obtain advice on transfer-of-business rules. Depending on the circumstances, these can affect employment instruments and recognition of prior service. Do not assume every entitlement resets at settlement.

Have your solicitor address responsibility for accrued entitlements, payroll information and any identified employment claims in the purchase arrangements. Your accountant should reconcile relevant amounts rather than relying solely on the seller’s summary.

Put unresolved staffing assumptions to the franchisor in writing. If required opening hours or service standards make your lawful roster unaffordable, resolve that before signing; do not rely on informally reducing hours later.

Practical takeaway: Before committing, obtain a costed roster, confirmation of the applicable employment rules and a clear allocation of any staff-transfer obligations. Buy on the cost of running the business properly, not on the cheapest-looking wage estimate.