Franchise Resale Checklist for Australian Business Buyers
What this checklist is for
Buying a franchise resale — an existing franchised business sold by its current operator — is a different process from buying either a new franchise territory or an independent business. You're dealing with three parties instead of two (the seller, the franchisor, and your own advisors), and the franchisor's approval process adds a layer of complexity that catches many first-time buyers off guard.
This checklist covers the full evaluation process for a franchise resale in Australia: assessing the franchise system itself, verifying the financials with royalties properly accounted for, preparing for franchisor approval, and managing the transfer. It works for service franchise resales across Jim's Group businesses, Hire A Hubby territories, Poolwerx and Swimart operations, and similar blue-collar service systems common in the Australian market.
I put this together after watching a buyer I know spend $190,000 on a cleaning franchise resale without checking whether the commercial contracts were transferable to the new entity — they weren't, and two clients representing about 40% of revenue cancelled within 90 days of settlement (which was a painful lesson, and an avoidable one).
For background on the franchise resale landscape in Australia, read the guide to buying a franchise resale in Australia before working through this checklist.
The three things most buyers miss on franchise resales
One: Applying multiples to pre-royalty EBITDA rather than post-royalty. A business earning $130,000 EBITDA before the 10% royalty and 3% marketing levy looks very different after — and the multiple should be applied to the $113,000 post-levy figure, not the $130,000.
Two: Not getting informal franchisor approval before investing time in due diligence. A formal approval process takes four to eight weeks, but a 20-minute call with the development team early on tells you whether you're likely to qualify. If you're not, you've saved yourself weeks of work.
Three: Missing the remaining franchise agreement term. Under three years left creates genuine exit and renewal risk. Under the full checklist below, this gets its own section — but flag it early and often.
For the due diligence process on the business itself (financials, customers, staff), the initial deal screening checklist is a useful companion. This checklist handles the franchise-specific layers on top of that base process.
This is one of the sourcing and evaluation tools that sits within Module 3 of the Playbook — the module covering how to find, assess, and approach businesses before entering formal negotiations.
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