Buying a Franchise in Australia: Verify the Seller’s Identity

A familiar brand name does not tell you which business you will contract with. Before buying into Australia’s franchising community, establish who is selling the opportunity, whether they are authorised to do so and where your money will go. These checks help distinguish an understandable corporate structure from an unexplained mismatch that needs resolving before you commit.

1. Identify the legal entity behind the brand

Start by asking for the proposed franchisor’s full legal name, Australian Business Number (ABN) and, where applicable, Australian Company Number (ACN). Compare these details with the party named in the draft franchise agreement, rather than relying on a brochure, website or email signature.

A trading name may differ from the company’s legal name. A franchise group may also use separate entities for intellectual property, supply arrangements or other functions. Differences are not automatically suspicious, but you should understand them.

Create a simple record showing:

• The brand and business names used in advertising.
• The legal entity offering the franchise.
• The entity named as franchisor in the agreement.
• The person negotiating with you and their role.
• Each entity requesting payment and the stated reason.

Use ASIC’s registers to check company and business name details. ABN Lookup can help you cross-check an ABN and its associated entity details. Search using identifiers as well as names, particularly where similarly named businesses exist.

Registration confirms particular recorded details; it does not establish that the opportunity is profitable, trustworthy or suitable. Ask your solicitor to explain any trust, partnership or overseas entity involved, including who will actually bear the contractual obligations.

2. Use the Franchise Disclosure Register correctly

Australia specifically regulates franchising through the mandatory Franchising Code of Conduct, enforced by the Australian Competition and Consumer Commission (ACCC). The current Code commenced on 1 April 2025, with some requirements applying from 1 November 2025. It sets disclosure obligations and standards of conduct, including an obligation to act in good faith.

Franchisors must maintain a profile and publish key information on the Australian Government’s Franchise Disclosure Register. Search for the proposed franchisor and compare the identifying information with your agreement and correspondence.

The register is a starting point, not a government endorsement. A listing does not mean the Government has approved the business model, checked every claim or guaranteed your investment. Australia does not have a general franchise approval process simply because this disclosure register exists.

If you cannot find the business, ask for its exact registered profile details. Do not accept an unexplained absence or a profile belonging to another entity as sufficient reassurance. Have your solicitor investigate before proceeding.

Keep dated copies of the information you reviewed. If names or entities change during negotiations, request an explanation and updated documents rather than assuming the change is administrative.

3. Check the representative’s authority

You may deal with an employee, broker, recruitment consultant or existing franchisee rather than the franchisor directly. Establish whom that person represents and what they are authorised to offer.

Ask the proposed franchisor to confirm the representative’s role through independently verified contact details. Do not rely exclusively on a telephone number or contact address supplied by the person whose authority you are checking.

Useful questions include:

• Are you acting for the franchisor or an existing owner?
• Who can approve the proposed franchise grant or transfer?
• Who is authorised to agree changes to the commercial terms?
• Will the franchisor confirm any concessions directly in writing?

For an existing outlet, distinguish the seller of the business assets from the franchisor granting or approving franchise rights. They may be different parties with separate agreements and payment obligations.

The Australian Consumer Law prohibits misleading or deceptive conduct in business dealings. Nevertheless, do not assume a representative’s assurance necessarily binds the entity you expect. Give your solicitor relevant emails and proposed concessions so they can check authority and ensure agreed terms are properly documented.

4. Verify payment instructions before transferring money

Before making a payment, obtain a written explanation of its purpose, recipient and contractual basis. If the invoice comes from an entity other than the proposed franchisor, ask why that entity is entitled to receive the money.

Confirm bank details through an independently verified contact channel, particularly when instructions change unexpectedly. A professional-looking invoice or familiar email thread is not enough by itself.

Ask your solicitor to check when payment is legally and contractually due, and whether it is refundable. Identity checks do not replace the Code’s pre-contract disclosure requirements or legal advice about payment timing.

Practical takeaway: Before signing or paying, make sure you can identify the contracting entity, verify the representative’s authority and explain the payment recipient. Pause whenever those three checks do not align.