Buying a NZ Franchise: Choose Independent Advisers

Buying a franchise in New Zealand involves more than asking someone to check the paperwork. You need advisers who understand the franchise community, act independently for you and explain how the proposed deal affects your finances and responsibilities. Choosing the right lawyer and accountant—and giving them a clear brief—can turn a document review into useful buying advice.

Choose advisers who act for you

A broker, seller or franchisor may recommend a lawyer or accountant. A recommendation can be a useful starting point, but it is not proof that the adviser is independent or suitable for your purchase.

Ask who the adviser would represent, whether they have acted for the franchisor or seller, and whether any existing relationship creates a conflict. A lawyer should assess conflicts before accepting your instructions. Familiarity with a brand may help, but it should never replace an independent assessment of your interests.

Look for relevant experience rather than a general assurance that the adviser handles business purchases. Useful questions include:

• Have you advised buyers of New Zealand franchises?
• Have you reviewed businesses with a similar operating model?
• Who will actually carry out the work and explain the findings?
• How do you handle issues that require input from another specialist?
• Can you meet the proposed timetable without shortening essential checks?

Your accountant and lawyer do different jobs. The accountant tests the financial position and commercial assumptions; the lawyer examines legal obligations, transaction documents and available protections. Neither should be expected to replace the other.

Understand why independent advice matters in New Zealand

New Zealand has no franchise-specific legislation, mandatory franchise registration system or general statutory franchise disclosure regime. There is also no franchise-specific law governing the ongoing relationship between franchisor and franchisee.

That does not mean the relationship is outside the law. General contract law applies, alongside legislation relevant to the business. The Fair Trading Act 1986 prohibits misleading and deceptive conduct, unsubstantiated representations and unconscionable conduct in trade. Competition obligations arise under the Commerce Act 1986. Property, employment and intellectual property laws may also affect the purchase and operation.

The Franchise Association of New Zealand (FANZ) has a Code of Practice applying to its members. Membership is voluntary, and its code requirements are not a nationwide statutory regime. They include disclosure and processes concerning independent legal advice before signing.

Ask your lawyer whether the franchisor is a member and which code obligations apply to your transaction. If you are asked to acknowledge receiving advice, or to sign a statement declining it, understand exactly what that document records. An acknowledgement is not a substitute for advice, and a legal review is not a guarantee of commercial success.

Give both advisers the same complete brief

Engage advisers before committing yourself, not simply when the seller says the documents are ready for signature. Start by explaining what you intend to buy, how you will fund it, who will operate it and what you need the business to provide financially.

Give both advisers access to the same core information. Depending on the transaction, this may include the proposed franchise agreement, disclosure document, sale agreement, financial statements, lease, funding proposal and written explanations supplied by the seller or franchisor.

Do not filter out documents because they appear routine. A financial assumption may depend on a contractual obligation that only becomes obvious when the two advisers compare their findings.

Agree a written scope covering:

• Which documents and financial records will be reviewed.
• What further information each adviser will request.
• Which checks are excluded or require separate specialists.
• Expected fees, likely additional charges and reporting dates.
• Whether the advisers may communicate directly with each other.

Ask for an initial review that identifies major obstacles before commissioning every possible investigation. This can help you avoid spending heavily on a deal with a fundamental problem.

Require a decision-ready conclusion

A long report is not necessarily a useful report. Ask each adviser to distinguish between matters that need resolving before you proceed, risks you could knowingly accept and issues requiring further evidence.

Arrange a joint discussion where legal and financial findings overlap. For example, a compulsory payment may be clearly drafted but absent from the financial forecast. That is neither purely a legal issue nor purely an accounting issue.

Finally, request a clear list of unresolved questions, who must answer them and what satisfactory evidence would look like. If the documents change, confirm whether the revisions need another review.

Practical takeaway: appoint independent advisers early, give them a shared brief and require clear conclusions. The goal is not merely to obtain a signature on an advice certificate, but to understand the commitment before you make it.