How Much Does A Franchise Agreement Review Cost?

Mia is looking at buying a cafe franchise in Brisbane. The franchisor has sent through a franchise agreement, disclosure document, information statement, lease details and a deadline to sign. The opportunity looks exciting, but the folder of documents is huge.

Her next question is very normal: how much should she budget for a lawyer to review the franchise documents before she signs?

The franchise agreement review cost can vary, but the main thing is knowing what you're paying for. A good review shouldn't just skim the agreement. It should help you understand the commercial risks, the fees, your exit options and the obligations you'll be locked into once you become a franchisee.

How Much Does A Franchise Agreement Review Cost?

In Australia, a basic fixed-fee franchise agreement review will often sit somewhere around $1,000 to $2,000 plus GST, depending on the lawyer and the documents involved. A fuller review that also covers the disclosure document, lease or licence documents, personal guarantees and a detailed advice call may commonly fall around $2,000 to $4,000 plus GST. If you need negotiation support, urgent turnaround, lease negotiations or several rounds of amendments, the total cost can be higher.

Many franchise lawyers price review work on a fixed-fee basis once they've seen the documents and understood the scope. That means you'll know the cost before they start, rather than being surprised by hourly billing later.

It depends on the complexity of the franchise documents, the level of advice you need and how the lawyer charges.

Some reviews are fairly straightforward. For example, a quick franchise agreement review may suit an established franchise system with standard documents, a simple territory and no unusual lease arrangements. Other reviews take more time because there are site-specific issues, finance conditions, personal guarantees, lease risks or unusual restraint clauses.

The main cost drivers are usually:

• The length and complexity of the franchise agreement: Some agreements are clear and well organised. Others are long, heavily one-sided or full of cross-references to manuals, policies and side documents.
• The disclosure document: This needs to be checked against the agreement and your commercial expectations, not read in isolation.
• The business model: A mobile service franchise is different from a restaurant franchise with fit-out costs, staff, premises and supply arrangements.
• The lease or licence: If you need premises, a commercial lease review can be just as important as the franchise agreement.
• Your questions and negotiations: If you want the lawyer to help negotiate changes, that usually adds work beyond the initial review.
• Urgency: A very short turnaround can affect cost because the lawyer may need to prioritise your matter quickly.

If you're comparing quotes, ask what the fee actually includes. A cheap review that only summarises the agreement may not give you the practical advice you need to decide whether to sign.

What Should Be Included In A Fixed-Fee Franchise Review?

A fixed-fee franchise review should clearly set out which documents will be reviewed, what advice you'll receive and whether a call or written summary is included.

For a buyer, the review should usually cover more than just the franchise agreement. Under the Franchising Code of Conduct, a franchisor must give you key pre-entry documents, including the information statement, disclosure document, a copy of the franchise agreement, a copy of the Code and relevant lease or occupancy documents. The information statement should be provided early, generally as soon as practicable and no later than 7 days after you formally apply or express interest, and before the other required documents.

The franchisor generally must give the required documents at least 14 days before entering into or executing the franchise agreement. Certain later changes or extra earnings information can also affect timing. The Australian Competition and Consumer Commission oversees compliance with the Code, so these documents aren't just admin paperwork. They're part of the legal framework for franchising in Australia.

A useful fixed-fee review will often include:

• Franchise agreement review: Your obligations, fees, territory, performance targets, termination rights, renewal rights, restraints and dispute process.
• Disclosure document review: The franchisor's background, existing franchisees, costs, litigation history, supplier rebates and other information you're meant to know before signing, including any required franchise disclosure document update.
• Franchising Code check: Whether the process appears to meet the Code requirements that matter to your decision.
• Lease or occupancy document review: If premises are involved, checking rent, term, renewal options, fit-out obligations and who controls the site.
• Personal guarantee and security review: If you're signing personally or offering security, you need to understand what assets may be at risk.
• Advice call or written advice: You should come away with a clear list of risks, questions and possible negotiation points.

Before you approve a quote, ask whether the lawyer will review all attachments and schedules. Sometimes the schedules contain the fees, territory map, site details or special conditions that matter most.

Is A Disclosure Document Review Separate From The Agreement Review?

It can be separate, but it usually works best when the disclosure document and franchise agreement are reviewed together.

The disclosure document tells you what the franchisor is disclosing about the franchise system. The franchise agreement tells you what you're legally agreeing to do. If the two documents don't line up, that can be a major issue.

For example, the disclosure document may describe expected establishment costs, supplier arrangements and marketing fund contributions. The franchise agreement may then give the franchisor broad rights to change suppliers, increase certain fees or require extra spending on equipment or fit-out. You need to read both documents side by side to understand your real exposure.

A disclosure document review should look at things like:

• whether the initial and ongoing fees are clear
• whether marketing fund contributions are explained
• whether the franchisor receives rebates or other benefits from suppliers
• how many franchisees have left the system recently
• whether there are disputes or litigation involving the franchisor
• whether you can contact current and former franchisees
• whether the term of the franchise matches any lease or licence term

Say Mia's disclosure document estimates set-up costs of $180,000 to $230,000, but the lease schedule also requires a bank guarantee equal to 6 months' rent. If monthly rent is $8,000 plus GST, that's an extra $48,000 tied up in a bank guarantee. That may not be a deal-breaker, but Mia needs to know about it before she signs finance documents or pays a deposit.

That's why a franchise disclosure document review cost should be assessed in context. The value is in spotting the gaps between the documents and the commercial deal you think you're getting.

How Do Franchise Lawyer Costs Compare In Australia?

Franchise lawyer costs in Australia usually depend on whether you're using a free template approach, an online fixed-fee legal service or a traditional law firm charging by the hour.

Each option has a different level of support.

Free Or DIY Review

A DIY review costs less upfront, but it puts the risk on you to identify legal and commercial issues yourself. This can be risky with franchise documents because they often contain long-term obligations, personal guarantees, restraints and termination clauses.

Templates and online checklists can help you organise your questions, but they won't tell you whether a clause is reasonable for your specific franchise, location or risk profile. Templates also often miss the interaction between the franchise agreement, disclosure document, lease and finance arrangements.

Online Fixed-Fee Review

A fixed-fee review gives you more certainty because you know the price before the work starts. This can be helpful when you're already budgeting for franchise fees, rent, fit-out, equipment and working capital.

A good fixed-fee quote should make clear:

• which documents are included
• whether the fee includes a phone or video call
• whether you receive written comments or a written advice note
• whether negotiation with the franchisor is included or quoted separately
• what happens if extra documents arrive later

Traditional Hourly Billing

Some firms charge by the hour. Franchise lawyer hourly rates in Australia can vary widely, but it's not unusual to see commercial lawyers charging a few hundred dollars per hour, and senior specialists charging more. This can make sense for complex negotiations or unusual franchise systems, but you should ask for an estimate and regular updates so costs don't surprise you.

Hourly billing can become more expensive if there are multiple rounds of negotiations, urgent deadlines, lease issues or finance documents to review. That doesn't mean it's the wrong option. It just means you need clarity before the lawyer starts.

What Documents Should You Send Your Lawyer?

You should send every document the franchisor has given you, plus any related lease, finance or company documents that affect the purchase.

It's tempting to send only the franchise agreement because that's the document with the biggest title. In practice, your lawyer needs the full picture to give useful advice. Missing documents can lead to missed risks.

Before your review, gather:

• the Franchising Code information statement, which the franchisor should have provided within 7 days after you expressed interest and before other required documents
• the franchise agreement, including all schedules and annexures
• the disclosure document
• a copy of the Franchising Code of Conduct
• any operations manual or summary of key manual obligations
• lease, sublease, licence to occupy or agreement for lease review documents
• fit-out documents, plans or contractor requirements
• supplier agreements or mandatory supplier lists
• finance approval conditions, if your lender has given them to you
• any deposit receipt or payment request, including refund terms
• emails or messages about special promises, territory, exclusivity or expected earnings
• company documents, if you're signing through a company with an ACN and ABN

If an older or legacy pack includes a key facts sheet, you can send that too. It may still be useful background, but it isn't part of the current pre-entry document list in the same way it was under the previous Code.

Here's a simple outline you can fill in before sending your documents. It's not a legal document and it won't replace tailored advice, but it helps your lawyer understand what matters to you.

1. Your details: Write your name, company name, ABN or ACN, and who will sign the documents.
2. Franchise system: Note the brand, location, territory and whether it's a new site or existing business.
3. Key dates: Add the date you received the documents, any signing deadline and any payment deadline.
4. Money paid or requested: List deposits, initial fees, training fees, legal fees, rent, fit-out and working capital estimates.
5. Premises details: Note whether you have a lease, sublease, licence or no premises yet.
6. Main concerns: Write the 3 to 5 issues you're most worried about, such as territory, renewal, exit, personal guarantees or earnings.
7. Promises made: Record anything the franchisor or broker has said that influenced your decision.
8. Outcome you want: Say whether you need advice only, negotiation support or help deciding whether to proceed.

If you later use this outline to prepare negotiation notes or special conditions, a lawyer should tailor those legal documents before you rely on them.

What Questions Should You Ask Before Approving A Quote?

You should ask practical questions about scope, timing and deliverables before you approve the quote.

This is the easiest way to avoid paying for a review that doesn't match what you actually need. It also helps you compare quotes fairly. One lawyer may be quoting for a short phone call after reading the agreement only. Another may be quoting for a review of the agreement, disclosure document, lease, guarantees and a written list of negotiation points.

Useful questions include:

• Which documents are included in the fee? Ask whether the disclosure document, lease and guarantees are covered.
• Will you check the Franchising Code process? For example, the information statement, 14-day consideration period and cooling-off rights should be considered.
• Will I receive written advice? A written summary can be helpful when you're weighing up risk or speaking with your accountant, broker or lender.
• Is a call included? Many franchise risks are easier to explain in a conversation, especially if you're new to franchising.
• Are negotiations included? If not, ask how further work will be quoted.
• What is the turnaround time? Make sure the lawyer can review the documents before your signing deadline.
• What happens if the franchisor sends revised documents? Ask whether the fee includes a check of changes or whether that's extra.

You should also ask what the lawyer needs from you. The review will be stronger if you explain your commercial goals. For example, if you're relying on an exclusive territory, planning to sell in 3 years or signing a personal guarantee, those details should shape the advice.

Remember, a franchise agreement is usually drafted to protect the franchisor's system. That's normal in franchising. Your review is about understanding where the balance sits and whether the deal works for your business.

When Should You Get The Review Done?

You should get the review done before you sign anything binding or pay money you can't easily recover.

Under the Franchising Code of Conduct, the franchisor generally needs to give you the required documents at least 14 days before entering into or executing the franchise agreement. That 14-day period is designed to give you time to read the documents, get advice and ask questions before committing.

Some franchisors may ask for deposits or other payments before all documents are provided. Be careful with this. Before paying anything, check exactly what the money is for, whether it's refundable, when it becomes non-refundable and what happens if you decide not to proceed after reviewing the documents. There's also a 14-day cooling-off period for many new franchise agreements, but it's much safer to understand the documents before signing rather than relying on cooling-off rights later.

Timing matters because franchise deals often involve several moving parts at once. You may be dealing with:

• the franchisor's signing deadline
• a landlord or shopping centre approval process
• finance approval
• fit-out quotes
• training dates
• handover of an existing franchised business

If something doesn't line up, the cost can be practical rather than theoretical. For example, if your franchise term is 5 years but your lease is only 3 years with no option to renew, you may be committed to the franchise after losing the premises. Or if you pay for fit-out before the lease is final, you may have spent money without secure access to the site.

A sensible order is:

1. Collect the franchise documents and note the date you received them.
2. Do your own first read and list the issues that don't make sense.
3. Speak with your accountant or financial adviser about the numbers.
4. Get the legal review before signing or paying amounts you may not be able to recover.
5. Negotiate any changes or special conditions in writing.
6. Only sign once the franchise agreement, disclosure documents, lease and finance arrangements line up.

If the franchisor is pushing for a same-day signature, take a breath. A serious franchise relationship is a long-term commitment, and a short delay for proper advice is usually worth it.

Key Takeaways

• A franchise agreement review in Australia may range from about $1,000 to $2,000 plus GST for a basic review, through to $2,000 to $4,000 plus GST or more for fuller reviews with leases, guarantees or negotiations.
• A useful review should cover the franchise agreement, disclosure document, information statement and any lease or occupancy documents that affect your business.
• Fixed-fee reviews can give you cost certainty, but check exactly what's included before you approve the quote.
• The Franchising Code includes important pre-entry rules, including early provision of the information statement and a general 14-day period before the franchisor executes the franchise agreement.
• Try to get advice before signing or paying money you may not be able to recover, rather than relying on cooling-off rights later.

If you'd like help with reviewing your franchise agreement, checking your disclosure documents, understanding your lease risks or negotiating changes before you sign, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.