By Craig Zammit
SYDNEY: The Australian Competition and Consumer Commission has launched the Being Smart About Your New Franchise checklist for those looking to sign a lease agreement, at its Franchising Consultative Panel meeting.
The publication is designed to help prospective franchisees make an informed decision before signing 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, John Martin, said.
“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 recommend prospective franchisees consider issues such as contractual obligations, renewal and transfer options, occupancy costs and franchise territory.
The checklist is designed as a user-friendly tool to ensure all critical factors are considered and how these factors might affect the viability of the franchise in both the short and long term prior to signing the lease agreement.
A free copy of the checklist is available by calling the ACCC Small Business Helpline on 1300 302 021 or via www.accc.gov.au/content/index.phtml?itemId=785095.