Franchise agreement summary, Lumen Roasters, Greenslopes site
Franchise agreement summary template, with every fee in one table
A prospect reading a franchise agreement for the first time wants one thing before the clauses: the total cost of being in this system for a year. This four page summary puts every payment in a single table, then shows what those percentages come to on the site forecast of $780,000, which is $76,260 a year or 9.8 per cent of gross sales.
The document, page by page
Every page as it renders and as it prints, with nothing summarised. Read the wording before you reuse it.
Section by section
What each section is for, so you can keep the ones you need and drop the rest.
- Letterhead and header block
- The franchisor's masthead, the prospect, the site, the date and the agreement version.
- Code warning
- A callout stating the 14 day disclosure rule and the 14 day cooling off period.
- 1. What it costs
- A nine row fee table, and a callout turning the percentages into $76,260 a year.
- 2. Term and renewals
- Seven years, two renewals of five, the notice window and the four renewal conditions.
- 3. Territory
- A 2.5 kilometre circle, with a protected and not protected table and the delivery carve out.
- 4. What you must buy, and from whom
- Coffee from the roastery, nominated suppliers, open categories, and the 85 per cent minimum.
- 5. How the agreement ends
- Transfer, breach with up to 30 days to fix, the no remedy grounds, and end of term obligations.
- 6. What to do before you sign
- Five numbered steps, from reading the disclosure document to calling seven franchisees.
How to adapt this document
For a service franchise with no shop, replace the 2.5 kilometre circle in section 3 with a postcode list and drop the supply section entirely, because what binds a mobile franchisee is a lead allocation rule rather than a purchase minimum. For a multi site agreement, add a development schedule to section 2 showing the date each store must open and what happens if one is late, since that is the term a multi site franchisee actually negotiates. For a system where the franchisee owns the lease, move the lease renewal condition out of section 2 and say in section 5 what happens to the site if the franchise ends but the lease does not, which is the gap that produces litigation. Keep the callout on page one in every version.
Which law the terms follow
The summary is written for an Australian franchise and names the Franchising Code of Conduct, which the Australian Competition and Consumer Commission administers and which took effect in its current form on 1 April 2025. Two timing rules from the Code appear on the page: the disclosure document, the Code and the agreement must be given at least 14 days before signing or before a non refundable payment, and the franchisee has 14 days after signing to end the agreement. The marketing fund wording follows the Code's requirement for a separate account, an annual statement to every franchisee and an audit unless 75 per cent vote to dispense with one. The summary also points the prospect to the Franchise Disclosure Register, the free public register where franchisors publish system information. Figures are shown excluding GST unless the line says otherwise, and the franchisor's ABN appears on the letterhead.
What makes this document work
Nine payments in one table, with nothing recurring left out
The initial fee of $55,000, a $4,500 training fee, royalty at 6.0 per cent, a 2.5 per cent marketing levy, a 1.0 per cent refurbishment reserve, $180 a month for point of sale, a $12,000 renewal fee and a $9,500 transfer fee. The line under the table says there is no other recurring charge, which is the sentence a prospect needs.
The percentages are converted into a number
At the site forecast of $780,000 a year, the callout works it through: royalty $46,800, levy $19,500, reserve $7,800 and point of sale $2,160, for $76,260, or 9.8 per cent of gross sales before rent, wages and stock. A prospect who sees 6 plus 2.5 plus 1 rarely does that arithmetic unprompted.
It says plainly that it is not the disclosure document
The warning callout on page one states that the Franchising Code of Conduct requires the disclosure document, a copy of the Code and the agreement at least 14 days before signing, and that there are 14 days after signing to end the agreement. A summary that quietly replaces those documents is a compliance problem, not a shortcut.
Questions people ask
Can a summary replace the franchise disclosure document?
No. Under the Franchising Code of Conduct a franchisor must give a prospective franchisee the disclosure document, a copy of the Code and the franchise agreement at least 14 days before the agreement is signed or a non refundable payment is made. A summary is a reading aid that sits alongside them, which is why the callout on page one says so.
How long is the franchising cooling off period?
Fourteen days from signing the agreement, and it applies even where a deposit has already been paid. That is what the warning callout on the first page tells the prospect. Take advice inside that window rather than after it, because the practical value of a cooling off right falls away once the fit out is ordered.
What should a franchise fee table include?
Every payment, one to a row, with the amount and when it falls due. This one runs from the initial fee through royalty, marketing levy, refurbishment reserve and point of sale to the renewal and transfer fees. A fee that only appears in clause 27 of the agreement is the one that causes an argument, so put it in the table.
Is a franchise territory ever exclusive?
Rarely, and this summary shows why. The protected column stops a second Lumen Roasters store inside 2.5 kilometres and gives first offer on a new site inside 4. The not protected column lists delivery platforms, wholesale beans, supermarket retail and events. A customer inside the circle can still order from another store through a platform.
What is the Franchise Disclosure Register?
A free public register hosted by the Australian Government where franchisors publish information about their systems. It is the first place to look before meeting a franchisor, because it lets you compare what a brand says in a sales meeting with what it has filed. The last item on this summary sends the prospect there.
How much notice is needed to renew a franchise agreement?
Whatever the agreement says, and here it is a window between nine and six months before the term ends, with the franchisor answering within 28 days. Miss the window and the agreement simply ends. The four renewal conditions are listed rather than left to discretion: no breach, two clean audits, the year 5 refit done, and the lease renewed.
What happens to the marketing fund a franchisee pays into?
It is accounted for separately. The franchisor must prepare an annual statement of the fund's receipts and spending and give it to every franchisee, with an audit unless 75 per cent of franchisees vote to do without one. The callout in section 4 tells the prospect to ask for the last two years before signing.
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