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Have you thought about expanding your business? If you have, you have probably realised that it could be an expensive process to begin, and it may not always pay off. However, there is a solution that requires minimum capital and usually allows works as long as your present business is running successfully. Franchising involves licencing your business model to somebody else who takes on the risk to replicate your business in another location. Then, as the franchisee, they pay you franchise fees for using the model. Franchising in New Zealand is a relatively straightforward process as the relationship between a franchisor and franchisee is governed by a franchise agreement. However, it can get more complicated if you want to expand your franchise overseas. This article will explain how you can bring your New Zealand franchise to Australia.

Setting Up a Company

The first step to bringing your New Zealand franchise to Australia is to set up an Australian company. Although it may be possible to set up franchises in Australia from your New Zealand franchise, it helps streamline the process if you set up an Australian company. 

Additionally, it may be best practice to register your New Zealand company in Australia. This is because it is much easier to set up a New Zealand company in Australia than any other foreign company trying to set up in Australia. To set up a New Zealand company in Australia, you must ensure that the name you wish to trade under is not taken. You must then fill out Form 402, which will provide general information about how the business will run. The documents that you must attach to your application include a:

  • current certified copy of the entity’s certificate of incorporation or registration;
  • current certified copy of the entity’s constitution;
  • memorandum of appointment of the local agent or power of attorney in favour of the local agent; and
  • memorandum stating the powers of certain directors.

Ongoing Obligations

Ongoing obligations of being a New Zealand business registered in Australia include:

  • maintaining a registered office in Australia;
  • displaying your company name;
  • displaying your Australian Registered Body Number (ARBN); and
  • using a local agent.

Ongoing Documents

There are also several ongoing documents that you must provide to the Australian Securities and Investment Commission. However, as a New Zealand business, you do not need to provide all of these documents. The documents that you do not have to provide are:

  • notification of change of registered office or office hours of a registered body;
  • notification of change to directors of a registered body;
  • statement to verify financial statements of a foreign company;
  • notification of change to details of a foreign company; and
  • notification of cessation, winding up or dissolution of a foreign company or registered Australian body.

Finding Franchisees

Once you have set up your New Zealand business in Australia, you can look for franchises. You should undertake market research to determine which part of Australia would be best suited for your business. You should also ensure that you have set up the appropriate supply chain models for your Australian businesses, as it may be harder to source specific products in Australia.

After you have set up the base of your franchise, you can then search for potential franchisees. The best way to do this is to employ a franchising agent in Australia. A franchise agent will look for people interested in buying a franchise and assess whether they would be suitable for your business.

Once you have found individuals willing to buy into your franchise, you can then draft a franchise agreement similar to the one you use in New Zealand. However, you must make sure that it reflects Australian laws where appropriate. Once your franchisees have signed the franchise agreement, your business has now expanded to Australia. 

Key Takeaways

If you have thought about expanding your business, then franchising might be one of the main options. This comes from its easy process and quick growth. Once you have exhausted your franchise options in New Zealand, you should consider expanding to Australia. Australia is a new market with several similar qualities to New Zealand. This means that it may not be a huge culture shock for your business. To expand to Australia, you should register your New Zealand business in Australia and follow all the obligations this requires. Then you could look to set up a business model suited for Australia. Once this has been set up, you can then look for franchisees to buy into your business. For legal assistance with franchising, contact LegalVision’s New Zealand franchise lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Does my New Zealand franchise plan have to be the same in Australia?

No, you should alter your New Zealand franchise plan so it better suits the market in Australia.

Can I have a master franchisee in Australia?

Yes, you can appoint a master franchisee in Australia to help you manage and recruit Australian franchises.

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