Being smart about your new franchise: Your checklist before signing a lease agreement

The Australian Competition and Consumer Commission today launched a checklist publication—Being smart about your new franchise—checklist before signing a lease agreement, at its Franchising Consultative Panel meeting.

The publication will help prospective franchisees make an informed decision before they sign up to a retail franchise and the related lease agreement.

"Lease terms are an important consideration for anyone thinking about buying a retail franchise. It is one of the main factors that will determine if the business will be successful," ACCC Commissioner, Mr John Martin, said today. "Signing a lease is a significant commercial decision - the franchisee is legally bound by the terms and conditions for the lease period.

"The ACCC is focusing on educating and assisting people who are considering becoming franchisees in exercising due diligence before they enter into a franchise and commit to a retail lease. It believes prevention of a problem is better than trying to fix the damage afterwards."

The retail leasing checklist will assist prospective franchisees to consider issues like:

• contractual obligations
• renewal and transfer options
• occupancy costs, and
• franchise territory.

The checklist is a simple and user-friendly tool to ensure all critical factors are considered. It is important to look at how these factors might affect the viability of the franchise in both the short and long term before the lease agreement is signed.

A free copy of the checklist is available by calling the ACCC Small Business Helpline on 1300 302 021 or via the link below.