Business loans for franchisees already trading: refits, renewals and extra sites

Most finance content about franchising is written for people about to buy their first store. This page is for the owner who’s already been trading for a few years, and now faces the next decision: a refit notice, a renewal, a chance to buy the store across town, or a slow quarter that needs bridging.

If you’re still at the buying stage, our franchise finance and buying a franchise pages cover that ground. What follows assumes you have trading figures, a relationship with your franchisor and a lease clock that’s already ticking.

How do lenders look at a franchisee who’s already trading?

Better than at a new franchisee, almost always. A store with two or three years of history gives the lender something real to assess: actual sales, actual margins and actual bank statement conduct. The questions they’ll ask are fairly predictable.

• What’s left after the franchisor’s cut? Royalties, marketing levies, technology fees and mandated supplier pricing come out before you see a profit. Assessors calculate serviceability from what remains.
• How long does the business have left? The remaining term on your franchise agreement and lease, plus any options, sets a practical ceiling on the loan term.
• How does your store compare? Some lenders ask how your sales rank within the network, or for franchisor benchmarks.
• Is the brand accredited? NAB has said that only about 10% of Australia’s roughly 1,200 franchise systems are likely to be accredited with any bank. If your brand is one of them, a bank may offer streamlined terms. If not, the bank will treat you more like an independent small business.

What do franchisees typically borrow for?

Need	What tends to fit	Notes
Franchisor-required refit or rebrand	Equipment finance plus an unsecured or secured loan	Equipment is its own security; building works aren’t
Renewal with conditions attached	Term loan sized to the new term	Lenders want the renewal signed first
Buying another franchisee’s store	Business acquisition loan	Franchisor consent to the transfer is essential
Opening a new territory or site	Mix of equipment finance and a term loan	See opening a second location
Slow season, stock or a tax bill	Line of credit or short-term loan	Keep this separate from long-term debt
Refinancing expensive debt from the start-up phase	Secured loan or term loan	Often possible once trading is proven

When a refit notice arrives, what are your options?

Refits are where many franchisees first need serious money after their initial purchase. Brands update their look every several years, and the cost can run well into six figures for a food outlet.

The Franchising Code limits when a franchisor can require significant capital expenditure. Broadly, it should have been disclosed before you signed, be needed to meet a legal obligation, or have been agreed in one of the ways the Code sets out. If you’re unsure whether a refit demand fits, ask the franchisor for its written justification and get advice before committing.

Once the scope is settled, split it:

1. Equipment and fixtures with resale value (ovens, coffee machines, refrigeration, digital menu boards, POS hardware) usually suit equipment finance. Each item acts as its own security, and repayments can be spread over its working life.
2. Building works, joinery, flooring and signage installation have little value once removed. These are better covered by an unsecured business loan, a shop fit-out facility, or a loan secured against property.
3. Lost trade during the works is easy to forget. If the store closes for a fortnight, factor that into how much working capital you need.

If your landlord’s consent is needed for equipment finance over fixtures in the premises, the lender may ask for a landlord waiver.

Planning a refit or second store? Share the details in a short enquiry and we’ll come back with options that suit your trading.

What changed with the new Franchising Code?

Since 1 April 2025, a replacement Franchising Code has been in force, contained in the Competition and Consumer (Industry Codes—Franchising) Regulation 2024. It generally applies to agreements entered into, renewed, extended or transferred from that date, while existing agreements stay under the former Code until one of those events happens.

For a franchisee thinking about borrowing, a few changes are worth knowing:

• Renewals and transfers bring you under the new Code. If you’re borrowing to renew or buy another store, the new rules will apply to that agreement.
• The Key Facts Sheet has gone. Franchisors no longer prepare one. Information that used to sit in it is now expected in the disclosure document, so ask for the current version when renewing or buying.
• Some early terminations now attract compensation. The new Code introduced compensation rights where a franchisor ends agreements early in certain circumstances. Lenders like anything that reduces the chance of a franchisee being left with debt and no business.

What risks do lenders weigh with franchisees?

Brand-level problems. If the franchisor is struggling, closing stores or in dispute with its network, lenders will be cautious about every franchisee in the system, however well the individual store trades.

Supplier mark-ups. Mandated suppliers can squeeze gross margins. Assessors notice if your margin is well below what similar independent businesses earn.

Lease timing. A franchise agreement with five years left on a lease with two years left is effectively a two-year business unless the lease renewal is secure.

Wage compliance. Franchisees operate in industries where underpayment has drawn regulator attention. Lenders may ask about payroll practices if your wages-to-sales ratio looks unusually low.

Documents to prepare

1. Franchise agreement, including the remaining term and renewal options
2. Premises lease and any options
3. Two years of financial statements and year-to-date management accounts
4. Six months of business bank statements
5. Franchisor’s refit scope, quotes and timeline (for refits)
6. Network benchmarking or store ranking, if the franchisor provides it
7. Written franchisor consent, where your agreement requires it for security or transfer

Illustrative example: a refit and a second store in the same year

This is a hypothetical case. A franchisee runs a café in a busy suburban shopping centre and has traded for four years. Head office announces a network-wide rebrand, with every store to be refitted inside a year. Around the same time, the franchisee two suburbs away decides to retire and offers to sell.

The brand isn’t accredited with the franchisee’s bank. The bank is happy to look at the store purchase if the owner’s home secures it, but wants one more quarter of results first, which costs time.

The owner splits the problem. New espresso machines, refrigeration and digital menu boards are funded through equipment finance. The building works for the refit are covered by an unsecured loan sized from four years of steady bank statements. Once the refit is complete and the franchisor has approved the transfer, the second store purchase goes to the bank with the extra quarter of figures and the home as security. Both loan terms are set to finish before the end of their respective franchise agreements.

Funding the next chapter of your franchise

You’ve already proven you can run the store. The next step, whether it’s a refit, a renewal or a second site, should be easier to fund than the first one was, and usually is when the application shows the right numbers.

Getting started means about sixty seconds on our form, and your credit record isn’t looked at when you submit it. Franchisees already juggle head office, landlords and suppliers, so we keep it simple: your enquiry isn’t passed around a panel of financiers. A specialist reads through your store’s position and phones you. Include your real weekly sales, the years left on your agreement and lease, and exactly what the funds will cover, so the first suggestion we make actually suits your store.

Ask about funding for your store →