Buying a Franchise in Australia: Plan for Opening Delays

An opening date is a target, not a guarantee. Premises may need approvals, equipment may arrive late, or required training may be unavailable. Before buying a franchise in Australia, establish what happens between signing the agreement and serving your first customer. Within the franchising community, clear responsibility for this period can prevent a delayed launch becoming a costly contractual problem.

Separate signing, commencement and opening dates

A franchise agreement is legally binding, and its beginning and end dates matter. Do not assume that your franchise term starts only when you open for business. Ask your solicitor to identify the date from which your operating rights run and whether the end date moves if opening is delayed.

For example, an agreement might start when signed while the proposed opening falls several months later. If the end date stays fixed, a delay could reduce the time available to trade without reducing the purchase price or other commitments.

Create a simple timeline showing:

• When you sign the franchise agreement.
• When the franchise term begins and ends.
• When each initial and recurring payment becomes due.
• When premises, equipment and training must be ready.
• The target opening date and any final contractual deadline.

Label each date as a binding obligation, an estimate or a milestone dependent on another event. Ask the franchisor to resolve inconsistencies between the agreement, project timetable and payment schedule before you commit.

Identify who controls each opening requirement

Request a written launch plan that names the person responsible for each task. A statement that the franchisor will “help with opening” does not explain who submits applications, instructs contractors or approves the finished outlet.

Depending on the business and location, opening may depend on planning consent, building work, food business requirements or other approvals. These requirements vary: obtain location-specific advice rather than assuming the franchise agreement establishes permission to trade.

For each requirement, record who must act, who pays, what evidence confirms completion and what happens if it is late. Pay particular attention to dependencies. You may be unable to complete training before staff are recruited, or to book an inspection before equipment is installed.

Ask how franchisor-controlled approvals work. Who approves the layout? How quickly will submitted plans be reviewed? Can an opening inspection require further work, and who decides whether the outlet is ready?

These are matters to clarify and, where appropriate, negotiate. Do not assume the law gives you a particular approval deadline or reimbursement right.

Calculate the cost of waiting to trade

Have your accountant prepare a separate pre-opening delay budget. Its purpose is to identify expenses that continue while customer revenue has not yet begun, rather than simply increasing the general contingency allowance.

Check the documents for costs such as rent, equipment hire, insurance, finance repayments, software subscriptions and any fixed franchise charges. Establish whether each starts on signing, delivery, access to premises or actual opening. A sales-based royalty and a fixed monthly charge can behave very differently before trading starts.

Model a shorter and a longer delay using your own quotations and payment commitments. Include practical consequences such as rescheduled training, contractor return visits or stock that cannot be used as planned. Avoid assuming these costs will arise in every franchise.

Then ask who bears each cost under the proposed agreements. If a franchisor promises to defer a fee or contribute to delay expenses, have the arrangement documented clearly, including its limits and payment conditions. Check that any concession does not merely postpone a large bill until opening day.

Agree what happens if opening cannot proceed

Australia’s mandatory Franchising Code of Conduct regulates the relationship between franchisors and franchisees and is enforced by the Australian Competition and Consumer Commission. The current Code commenced on 1 April 2025. Australian Consumer Law also applies, including prohibitions on misleading or deceptive conduct.

For a new purchase, franchisors generally must provide the franchise agreement, disclosure document and Code at least 14 days before you sign or make a non-refundable payment. Use that review period to examine opening obligations, not just the headline investment.

Ask your solicitor whether the agreement needs conditions addressing essential approvals or a final opening deadline. Clarify whether a missed deadline allows an extension, renegotiation or termination, and what happens to payments already made. These outcomes should not be assumed.

Also check obligations under separate contracts. Ending the franchise agreement may not release you from commitments to a landlord, lender or contractor.

Practical takeaway: Before signing, obtain one opening timeline, one responsibility schedule and one delay budget. Make sure the contracts explain what happens if the planned opening date slips.