Multi-Unit Franchisees: The Legal Issues You Need to Get Right
If you’re expanding from one franchise to several, your legal and operational settings need to grow with you. More sites mean more contracts, more staff, and more compliance risks. This is a practical snapshot of the key legal areas to get right as you scale.
1. Franchising Code of Conduct: What Changed in 2025 and Why It Matters
The new Franchising Code of Conduct, effective 1 April 2025, reshaped how franchise relationships are regulated.
- It introduced faster termination rights for serious misconduct and stronger protections for franchisees.
- If you’re signing or renewing after 1 April 2025, your agreement falls under the new Code. Older agreements remain on the 2014 Code until renewed, transferred or extended.
- You must receive the standard-form disclosure document, and the franchisor’s profile must be up to date on the Franchise Disclosure Register. What’s disclosed will impact your timing and decision-making when taking on new sites.
2. Development Schedules, Performance and Cross-Defaults
Multi-site deals often come with a development schedule setting out how many stores you’ll open and by when.
- Watch for cross-default clauses that could let one store’s problem jeopardise the rest.
- Negotiate store-by-store cure rights and realistic timelines.
- Review renewal and transfer provisions so you can sell or restructure a store without triggering default across your group.
- Make sure the Code’s “reasonable opportunity to make a return” obligation is supported by genuine site-level financials.
3. Unfair Contract Terms (UCTs): Real Penalties Now Apply
Since 9 November 2023, it’s illegal for any party to rely on unfair contract terms in standard-form small business contracts, which includes most franchise agreements.
- Look for one-sided clauses, such as broad restraints, unilateral termination rights or open-ended indemnities.
- Ask for fairer drafting and clear limits on variations or penalties.
4. Labour, Employment and Governance That Scales
For most multi-unit franchisees, the biggest challenge isn’t paperwork, it’s people management. Once you move beyond a single site, you’re no longer just running a store; you’re running a multi-site business with layers of staff, compliance and risk.
Under the Fair Work Act and the Protecting Vulnerable Workers laws, you’re responsible for full employment compliance, even if your franchisor provides systems or templates. You must ensure:
- Accurate wage payments and record-keeping: Errors in one site can expose the whole group. Multi-site operators are often targeted in Fair Work audits.
- Award classification and rostering: Make sure staff are paid under the correct award level, including penalties, overtime and allowances.
- Centralised HR systems: Use one reliable platform for payroll, rosters, leave, training and incident reporting across all stores.
- Delegation and accountability: Appoint strong store managers and set clear expectations for performance and reporting.
- Work health and safety: You’re responsible for maintaining safe workplaces across all locations. Keep records of safety checks, incidents and staff inductions.
- Governance and documentation: Maintain copies of Code disclosures, payroll summaries, supplier approvals, safety reports and lease consents. These are your evidence if a franchisor, landlord or regulator audits you.
If managing people and compliance starts to feel overwhelming, it’s a sign your structure needs attention, not that you’re doing something wrong. With the right legal and HR framework, you can focus on strategy and growth instead of day-to-day firefighting.
5. Site Control: Leases, Incentives and Make-Good
Each location will have its own lease obligations, and these need to align with your franchise terms.
- Match lease terms and options to franchise terms to avoid rent gaps or “dead time.”
- Secure all landlord consents, incentive deeds and step-in rights before signing.
- Always have your leases independently reviewed, even if the franchisor helps negotiate them.
6. Disputes, Exit and Restraint of Trade
Disputes are a reality in growing networks.
- The Code and your agreement set out mediation and resolution steps. For multi-site operators, push for the right to resolve disputes store by store, not across all your outlets.
- Review restraint of trade clauses carefully, they should be reasonable in duration, area and scope, and should not stop you from operating a compliant business after exit.
7. Funding, Guarantees and Insurance
Multi-site growth usually means new finance arrangements, and often, new guarantees.
- Negotiate caps or rolling releases for personal guarantees once each site meets performance targets.
- Keep your finance, lease and franchise obligations consistent to avoid accidental defaults.
- Review all insurance policies to make sure every site is properly covered and compliant with both your franchisor’s and landlord’s requirements.
How Rise Legal Helps Multi-Unit Franchisees
At Rise Legal, we help franchisees grow confidently and stay compliant as they scale. Our team covers franchising, leasing, employment, governance and compliance, giving you everything you need to expand sustainably.
We can assist with:
- Multi-site franchise and development deed reviews
- Retail lease and incentive deed reviews, tripartite and landlord consents
- UCT and Code compliance checks
- Employment and payroll system audits
- Governance frameworks and compliance record systems
This is just a high-level overview of the legal and operational issues that come with owning multiple franchise sites. Every brand, structure and growth plan is different.
The best way to make sure your setup is right and that your labour and compliance systems can handle the scale, is to book a quick chat with the Franchise team. We’ll look at your agreements, team structure and systems to make sure you’re legally protected as you grow.
✅ Book a chat with our team today – Free Discovery Call
Disclaimer: This blog post is intended for informational purposes only and should not be considered legal advice. Consult with a qualified commercial lawyer for personalised advice related to your specific circumstances.
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