How to Choose the Right Childcare Franchise in Australia

Choosing a childcare franchise is not choosing a logo. It is signing a contract that can run five to ten years, sets what slice of your revenue leaves the building every month, and quietly decides who you are allowed to sell to when you eventually exit. Get the brand right and the agreement wrong, and you have bought yourself a problem with a nice sign on the front.

If you are still weighing up whether to franchise at all rather than run independently, start with our guide to franchise versus independent childcare centres and come back here once you have decided franchising is the path. This article is about the next question: once you want a franchise, how do you pick the right one?

First, Work Out What You Are Actually Buying

In childcare, the word “franchise” gets used loosely, and that costs people money. Before you compare brands, separate three very different things.

A true franchise is one where you own and run the centre, you pay an upfront franchise fee plus ongoing royalties, and you operate under the brand’s system and rules. A company-owned network is a brand that owns its centres outright — you cannot “buy in” as a franchisee, you can only be employed or, at most, manage. A licence or management arrangement sits in between, where you use a brand or a curriculum without the full franchise structure. Each carries a completely different level of control, cost, and resale freedom.

This matters because Australia’s biggest early-learning names are not all franchises. G8 Education operates more than 400 centres and Goodstart Early Learning runs around 660 as a not-for-profit — but those are largely company-owned and operated networks, not brands you join as a franchisee. The genuine franchise space is smaller and more varied than the household names suggest, so the first job is confirming the model on offer is one you can actually own.

Read the Disclosure Document Like a Buyer, Not a Fan

By the time you are excited about a brand, you are the worst judge of it. The Franchising Code of Conduct exists precisely to slow that excitement down, and the version in force from 1 April 2025 strengthened the protections for people in your position.

Under the Code, the franchisor must give you the disclosure document — and the Code itself — at least 14 days before you sign anything, and you then have a mandatory 14-day cooling-off period after signing, according to the ACCC. The franchisor must also tell you to get independent legal, accounting, and business advice. Treat that as an instruction, not a suggestion.

Three things in the disclosure pack are worth more than the glossy brochure:

• The list of current and former franchisees. The Code requires their contact details to be disclosed. Call the ones who left, not just the ones the brand introduces you to — they will tell you what the system is really like.
• Any earnings or financial information, which must be provided 14 days before signing and must carry the franchisor’s accuracy statement. Be sceptical of network averages; ask how a centre of your size, in your area, actually performs.
• Significant capital expenditure and any specific-purpose funds. From 1 November 2025, the ACCC requires the disclosure document to flag when you will be required to spend significant capital during the term, and to give details of money you must pay into specific-purpose funds. A refit you did not budget for can wipe out a year of profit.

You can also look a brand up before you ever speak to them. The Franchise Disclosure Register at franchisedisclosure.gov.au is a free public register administered by the ACCC and hosted by Treasury, where franchisors publish profiles and, in some cases, their standard agreement. Read the profile cold, before a salesperson frames it for you.

Run the Fee Maths Against a Thin-Margin Business

Childcare is not a high-margin business once wages and rent are paid, which is exactly why the franchise fee structure deserves forensic attention. We cover the full cost stack in our childcare operating costs breakdown — the point here is what the franchise layer adds on top.

Industry sources indicate ongoing franchisor fees in childcare commonly run a royalty of around 5–7% of gross revenue plus a marketing levy of roughly 1–4%, for a combined take that often lands between 7% and 12% of gross. The same sources put the upfront franchise fee in the order of $50,000 to $100,000, on top of the fit-out or build, which can range from a few hundred thousand dollars to well over a million depending on the site.

Two questions decide whether those numbers work for you. First, are fees charged on gross revenue or net profit? A percentage of gross is paid whether or not your centre is full — in a soft occupancy year, a gross royalty bites hardest exactly when you can least afford it. Second, what does the fee actually buy? A strong system — proven enrolment marketing, compliance support, buying power, training — can be worth every cent. A weak one is just a tax on your turnover. The test we apply: would this centre perform meaningfully better as a franchise than it would as a well-run independent? If not, the fee is buying a logo.

Ask the Childcare-Specific Questions Generic Advice Misses

Most “how to buy a franchise” advice treats every franchise the same. A childcare franchise is a regulated childcare business first and a franchise second, and the regulated layer is where the real risk sits. A general business purchase still applies — work through our how to buy a childcare centre guide and the due diligence checklist — but add these franchise-specific questions on top:

• Who holds the approvals? Provider Approval and Service Approval are the legal right to operate. If the franchisor holds the Service Approval rather than you, your business is far less independent — and far harder to sell.
• Who is accountable for the NQF rating? Your centre’s National Quality Framework rating is set by how your centre operates, but the franchise system shapes it through training, ratios support, and policies. Ask how the brand’s existing centres rate, and what support you get to lift a rating.
• How is the territory defined? A protected catchment is worth real money. Ask whether the franchisor can approve another centre — its own or a new franchisee’s — inside your catchment, and what happens to your fees if local supply jumps.
• Where does staffing responsibility sit? Educator recruitment, qualifications, and award compliance remain yours in most franchise models. Confirm what the brand actually provides versus what it merely promises.

Choose for the Exit, Not Just the Entry

The single most overlooked part of choosing a franchise is what happens when you want out. Franchise terms commonly run five to ten years with renewal options, and the agreement — not you — usually controls how and to whom you can sell.

Read the transfer and assignment clauses before you fall in love with the brand. Can you sell your centre to any qualified buyer, or only to someone the franchisor approves? Does the franchisor take a transfer fee or a right of first refusal? Does the buyer have to re-sign for a fresh full term, or inherit your remaining years? These clauses directly affect your buyer pool and therefore your sale price. A centre that can only be sold to a franchisor-approved buyer, on the franchisor’s terms, is worth less than one you can take freely to the open market — and that gap shows up in the valuation. Choose the franchise whose agreement still leaves you with a sellable asset at the end.

Key Takeaway

Pick a childcare franchise the way you would pick a long-term business partner: confirm you are buying a business you genuinely own, read the disclosure document and the transfer clauses before the brochure, and make sure the fee is buying real operating uplift on a thin-margin business. The right franchise pays for itself in occupancy, ratings, and resale value. The wrong one just charges rent on your turnover.

Thinking about buying into a childcare franchise — or selling a branded centre? Talk to ChildcareLink for a specialist, confidential read on whether the deal and the agreement actually stack up. Visit childcarelink.com.au or contact our team directly.

Sources

• Australian Competition and Consumer Commission (ACCC) — Franchising Code of Conduct (new Code in force 1 April 2025; further disclosure obligations from 1 November 2025), 2025
• Franchise Disclosure Register, franchisedisclosure.gov.au (administered by ACCC, hosted by the Australian Treasury), 2025
• FranchiseInsights — Franchise Cost Comparison Australia, 2026
• Sanicki Lawyers — Childcare Franchise Sector in Australia update, 2024
• G8 Education and Goodstart Early Learning — public network/centre-count data, 2026

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. ChildcareLink recommends seeking independent professional advice tailored to your specific circumstances before making any business or investment decisions.