Inside Franchise Business - - Contents - ELIZABETH GORE-JONES Prin­ci­pal, The Fran­chise & Busi­ness Lawyers

What can you ex­pect your lawyer to charge?

How much can you ex­pect to pay your lawyer for ad­vis­ing you on buy­ing your fran­chise busi­ness? There is no sim­ple an­swer to this, be­cause fees will vary from firm to firm; some lawyers charge by the hour while oth­ers pro­vide a flat-fee struc­ture.

Here is an out­line of the fee-charg­ing ac­tiv­i­ties your lawyer is likely to un­der­take, and a guide to other costs you might need to meet…

Typ­i­cally your lawyer will


• the pro­posed con­tract of sale, plus ex­plain your rights and obli­ga­tions un­der the con­tract and ne­go­ti­ate any nec­es­sary changes, es­pe­cially those that will give you a right to ter­mi­nate with­out penalty if, for in­stance, you are not sat­is­fied with the fran­chise agree­ment or the fran­chisor does not agree to grant you the fran­chise

• the lease, plus pre­pare any dis­clo­sure state­ments un­der the ap­pli­ca­ble re­tail leases leg­is­la­tion, re­view the land­lord deed of covenant and pre­pare the deed of as­sign­ment of lease

• the fran­chise agree­ment, plus pro­vide you with ad­vice about it and un­der­take any nec­es­sary ne­go­ti­a­tions on your be­half.

UN­DER­TAKE due-dili­gence which will in­cur search fees.

PRE­PARE stamp-duty dec­la­ra­tions and

in­quiries, at­tend to stamp­ing of the doc­u­ments in the rel­e­vant states or ter­ri­to­ries.

There is no easy an­swer as to how much le­gal ad­vice will cost when you are buy­ing into a fran­chise as there are many vari­ables to be con­sid­ered.

AT­TEND t o a ny a djust­ments t o t he pur­chase price, in­clud­ing pro­vi­sion for em­ployee en­ti­tle­ments.

LIAISE with y our bank o r fi­nan­cial i nsti­tu­tion if you have ob­tained fi­nance.

FI­NALISE set­tle­ment.

Re­gard­less of the size, price or type of busi­ness, these ac­tiv­i­ties usu­ally en­tail a sub­stan­tial amount of work.


Search fees are usu­ally rel­e­vant if it is a food busi­ness, as this usu­ally re­quires a coun­cil in­spec­tion to en­sure the premises com­ply with reg­u­la­tions.

Other fac­tors will im­pact upon the search fees, such as the en­tity sell­ing the busi­ness. If you are buy­ing a food busi­ness, it is sug­gested you al­low about $600 to $700 in search fees.

If it is not a food busi­ness, then your search fees should be around the $300 mark.


Stamp duty is not payable in all states and ter­ri­to­ries when buy­ing a busi­ness. How­ever, if it should is payable, it is cal­cu­lated on the pur­chase price. Ask your lawyer about the cost as it varies. LE­GAL FEES

Again, your le­gal fees will vary de­pend­ing upon the type of busi­ness and, of course, varies be­tween law firms.

For a stan­dard trans­ac­tion (as an in­di­ca­tion only) you should al­low be­tween $5000 and $6000, plus GST. How­ever, for a larger, more com­pli­cated busi­ness trans­ac­tion (for ex­am­ple a res­tau­rant), you could be pay­ing be­tween $10,000 and $15,000 GST.


You may also need cer­tain li­cences to run your busi­ness, and these may in­volve fees. These li­cences vary ac­cord­ing to busi­ness type and the lo­cal coun­cil.

Li­cences you may need in­clude:

• Mu­sic – to play mu­sic or the ra­dio in your busi­ness (the li­cence en­sures the artists are com­pen­sated)

• Busi­ness name reg­is­tra­tion

• Food hy­giene – re­quired when your

busi­ness in­volves food prepa­ra­tion • Trade waste – for food and other busi

nesses that pro­duce waste

• Sig­nage and ad­ver­tis­ing – re­quired by

some lo­cal coun­cils

• Out­side din­ing per­mits – de­pen­dent upon the coun­cil.

When you en­gage your le­gal ad­vi­sor, ask them not only for a quote that in­cludes the hid­den ex­tras such as stamp duty, search fees and li­cence costs.

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