How to Buy a Franchise: A Step-by-Step Guide for 2026

Buying a franchise is one of the biggest financial decisions most people make, often second only to buying a home. Done well, it gives you a proven system, a known brand and a support team behind you. Done badly, it ties you to an agreement you do not understand, in a business you do not enjoy, for years. The difference usually comes down to process: knowing how to buy a franchise in the right order, asking the right questions at each step and not skipping the dull parts.

This guide sets out the ten steps to buy a franchise in 2026, from honest self-assessment to opening day, with the disclosure rules for Australia, the US, Canada, the UK and New Zealand. It applies to any industry. Where a worked example helps, we point to how buying a Success Tutoring franchise works. We are a tutoring franchisor, so read our view with that in mind; the steps below are the ones we would want any buyer to follow, whichever brand they choose.

Step 1: Assess yourself honestly

Before you look at a single brand, look at yourself. A franchise is a business you will run, not an investment you will watch.

• Capital. How much can you invest without risking your home or retirement, and how much working capital can you hold back for the early months? Lenders typically expect you to contribute a meaningful share of the total from your own funds.
• Time and role. Do you want to run the business day to day, or manage a manager? Most franchisors expect owner involvement, especially in the first years.
• Skills. Are you strongest in sales, people leadership, operations or numbers? Choose a business that rewards what you are good at.
• Lifestyle. Early mornings, late nights, weekends, school-holiday peaks: which can you live with for ten years?
• Purpose. What kind of work will still motivate you in year five?

Write your answers down. They become the filter for everything that follows.

Step 2: Research industries before brands

Choose the category first. Food, fitness, home services, childcare, retail and education each have different capital needs, staffing models, hours and resilience. Use franchise rankings such as Entrepreneur's Franchise 500 and the Franchise Times Top 400 to build a long list, but remember they measure franchisor strength and system size, not what an individual owner earns.

Useful starting points include franchise association websites (the Franchise Council of Australia, the International Franchise Association, the Canadian Franchise Association, the British Franchise Association and the Franchise Association of New Zealand), franchise expos and reputable directories. Our article on what you should know about franchising before you invest covers the basics of how the model works.

Step 3: Shortlist three to five brands

Narrow your list to three to five brands that fit your capital, skills and preferred hours and that have open territories where you want to operate. For each, gather:

• the total investment range and ongoing fees;
• the royalty structure (percentage of revenue, fixed fee or per-customer fee);
• territory size, exclusivity and availability;
• the support offered: site selection, fit-out, training, launch marketing and ongoing coaching;
• the length of the agreement and renewal terms;
• how long the franchisor has been franchising and how many units it has.

If you are considering education, our 12-point checklist for choosing a tutoring franchise applies this step to a tutoring franchise in detail.

Step 4: Enquire and meet the franchisor

Make contact, expect an introductory call and an application, and be ready to share your financial position. A good franchisor qualifies you as much as you qualify them. Pay attention to how they answer questions about failures, closures and franchisee disputes as well as successes. Pressure to sign quickly is a warning sign.

Step 5: Receive and read the disclosure document

Disclosure rules differ by country, and they are your most important protection.

• Australia. The Franchising Code of Conduct, remade with effect from 1 April 2025, requires a franchisor to give you a disclosure document, a copy of the franchise agreement and a copy of the Code at least 14 days before you sign or make a non-refundable payment (ACCC guidance). The Code also provides a cooling-off period after you sign.
• United States. The Federal Trade Commission's Franchise Rule requires a Franchise Disclosure Document (FDD) at least 14 calendar days before you sign a binding agreement or pay any money. The FDD has 23 standard items; Item 7 is the estimated initial investment, Item 19 contains any financial performance representation and Item 20 shows outlet openings, transfers and closures. Some states add registration requirements.
• Canada. There is no federal franchise statute. Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Prince Edward Island and, from 30 June 2026, Saskatchewan have franchise disclosure laws requiring a disclosure document at least 14 days before you sign or pay. Other provinces, including Quebec, rely on general contract and civil law.
• United Kingdom. There is no franchise-specific legislation. The British Franchise Association runs a voluntary accreditation scheme and Code of Ethics for members. Ask any franchisor for equivalent disclosure in writing.
• New Zealand. There is no franchise-specific statute. The Franchise Association of New Zealand has a code of practice its members follow, and the Fair Trading Act 1986 prohibits misleading conduct.

Read the whole document, not just the cost tables. Look at litigation history, the franchisor's financial statements, the list of current and former franchisees, and the conditions for renewal, transfer and termination.

Step 6: Make validation calls with existing franchisees

Validation means speaking with people who already own the franchise, ideally including some who have left. The disclosure document usually lists their contact details. Call more than the franchisor's suggested references, and visit units if you can.

Ask questions like:

• How long did it take to break even, and was that what you expected?
• Did the total investment match the disclosure estimate?
• How good is the training and ongoing support in practice?
• What surprised you most?
• Would you buy this franchise again?

Our list of 25 questions to ask a tutoring franchisor works for validation calls in most industries, and our franchise stories show the kind of background Success Tutoring partners come from.

Step 7: Arrange financing

Most buyers combine personal funds with borrowing. Common routes include:

• Bank business loans. Banks in Australia, New Zealand, the UK, Canada and the US lend to franchisees and assess both the borrower and the franchise system. Many have specialist franchise teams.
• Government-backed loans. In the US, the Small Business Administration's 7(a) programme guarantees loans of up to US$5 million made by approved lenders, and the franchise brand must be eligible for SBA lending. In the UK, Franchise Direct UK reports that the government-backed Start Up Loans scheme can lend up to £25,000 per director.
• Equipment and fit-out finance. Some lenders finance fit-out or equipment separately.
• Franchisor introductions. Many franchisors introduce lenders familiar with their system; few lend directly.

Build a five-year financial model before you apply, include a realistic ramp-up and keep a cash buffer for the months before the business pays its own way.

Step 8: Get independent legal and accounting advice

Do not sign without a franchise lawyer reviewing the agreement and an accountant reviewing your financial model and structure. A lawyer will explain territory rights, obligations, restraints of trade, renewal, transfer and termination. An accountant will test the investment estimate, your funding plan, tax structure and cash flow. The fees are small relative to the investment, and many franchisors require you to obtain advice, or sign a statement that you were told to.

Step 9: Sign, secure the site and complete training

Once you are satisfied, you sign the franchise agreement and pay the initial fee. For premises-based franchises, site selection, lease negotiation and fit-out follow, ideally with franchisor support. Initial training usually covers operations, systems, sales, marketing and people management. Ask how long it is, where it happens, and whether staff training is included.

Step 10: Launch and the first year

Launch is the start, not the finish. A strong opening relies on pre-opening marketing, a trained team and clear targets for the first 90 days. In the first year, follow the system closely, track your numbers weekly, stay in regular contact with head office, and learn from other franchisees. Most problems are cheaper to fix early.

A worked example: buying a Success Tutoring franchise

Success Tutoring is a K–12 tutoring franchise founded in Sydney in 2017, with physical, retail-style learning centres for English and Mathematics run by franchise partners with teams of tutors. It is a hands-on business, not a home-based, passive or part-time one. Support for partners can include site selection, leasing and fit-out, tutor recruitment and training, learning resources, franchise training and marketing around opening. As with any brand, check the franchise agreement and disclosure document for the support actually committed to.

The steps from first enquiry to opening day are set out on our what is the process page, and the costs are on the investment schedule. Use them as a reference point when you compare other brands' processes.

Frequently asked questions

What are the steps to buy a franchise?

Assess yourself, research industries, shortlist brands, meet franchisors, read the disclosure document, speak to existing franchisees, arrange finance, take legal and accounting advice, sign and train, then launch. Do not skip disclosure, validation or independent advice.

How long does buying a franchise take?

From first enquiry to signing often takes several weeks to a few months, because of the mandatory 14-day disclosure period in Australia, the US and Canada's regulated provinces, plus validation, finance and legal review. For premises-based businesses, site selection and fit-out add further months before opening.

Do I need business experience to buy a franchise?

Not always. Franchisors train owners in their system, and many successful franchisees come from corporate, engineering, finance or teaching backgrounds. What matters more is leadership, work ethic, willingness to follow a system and enough capital.

Can I get a loan to buy a franchise?

Usually, yes. Banks lend to franchisees and assess both you and the brand. In the US, SBA 7(a) loans of up to US$5 million are available through approved lenders for eligible brands. In the UK, the Start Up Loans scheme is an option for smaller amounts. Expect to contribute some of your own capital.

Is buying a franchise safer than starting a business?

A franchise gives you a proven system, brand and support, which reduces some risks. It does not guarantee success, and you pay for those advantages through fees and by following the franchisor's rules. Careful due diligence is what makes the difference.

Next steps

If you are researching how to buy a franchise in education, start with why us to see how Success Tutoring supports franchise partners, then read what the process looks like from first conversation to opening day.

This article is general information, not financial or legal advice. Laws and loan programmes change; verify current rules with official sources and seek independent advice before buying a franchise.