Legal Requirements for Opening a Gym Franchise in Australia

Written By KJ Gonzales


Launching a gym franchise is an exciting way to enter the booming fitness industry in Australia. With demand for health and wellness services on the rise, franchising offers a faster and more supported path to business ownership. But like any business, it comes with its share of legal responsibilities. 

Whether you're partnering with a well-known brand like Stepz Fitness or exploring other franchise options, it's essential to understand the legal steps involved. From registering your business to meeting insurance and safety standards, this guide breaks down what you need to know before you open your doors.

Summary: Starting a gym franchise in Australia is an exciting business opportunity, but it also comes with several legal responsibilities. From securing the right business structure to understanding workplace health and safety laws, it’s important to be informed and prepared. This article breaks down the key legal requirements for opening a gym franchise so you can start your journey with confidence and avoid unnecessary setbacks.


Understanding the Legal Basics of Franchising

What is a Franchise Agreement?

Before anything else, you need to understand what you’re signing up for. A franchise agreement is a legally binding contract between the franchisor (e.g. Stepz Fitness) and the franchisee (you). It outlines everything from brand usage and fees to your obligations and support offered.

Key inclusions in a franchise agreement:

  • Initial and ongoing fees

  • Territory and exclusivity clauses

  • Training and support structure

  • Marketing contributions

  • Termination or renewal clauses

Tip: Always have a franchise lawyer review the agreement before signing.

Registering Your Business

You’ll need to register your business with the Australian Securities and Investments Commission (ASIC). This includes:

  • Applying for an Australian Business Number (ABN)

  • Registering your business name

  • Choosing a legal structure (sole trader, partnership, or company)

For a franchise, setting up as a company is the most common approach due to liability protection and growth potential.


Licensing, Insurance and Regulatory Approvals

Fitness Industry-Specific Requirements

While there is no national fitness industry licence, your gym may need to comply with:

  • State or territory fitness industry regulations

  • Local council permits and approvals (e.g. signage, noise, parking, and occupancy)

Check with your local council to ensure your chosen site meets zoning and planning rules.

Insurance Policies

Adequate insurance is essential for protecting your business and meeting legal obligations. Required policies often include:

  • Public liability insurance: Covers injury or damage claims from third parties.

  • Professional indemnity insurance: Especially important if offering personal training services.

  • Workers' compensation insurance: Required if you have employees.

  • Business insurance: Covers property, equipment, and revenue loss due to damage or theft.


Employment and Workplace Obligations

Hiring Staff

As an employer, you’re legally required to:

  • Adhere to Fair Work Act 2009 guidelines

  • Provide appropriate employment contracts

  • Ensure minimum wage and award conditions are met

  • Register with the ATO for PAYG withholding and superannuation

Workplace Health and Safety (WHS)

Gyms must comply with national and state WHS regulations to keep members and staff safe.

This includes:

  • Regular equipment maintenance

  • First aid provisions

  • Emergency exits and evacuation plans

  • Clear signage for equipment use

  • Staff training in safety procedures

You may also need a WHS plan prepared as part of your business compliance checklist.


Privacy and Data Protection Laws

Gyms often collect personal and sensitive health information when signing up members or offering training.

Under the Privacy Act 1988, you must:

  • Clearly disclose how you collect and use data

  • Securely store member information

  • Allow members to access their data

  • Not share personal information without consent

If your business turns over more than $3 million annually, compliance with the Australian Privacy Principles (APPs)becomes mandatory.


Advertising and Marketing Regulations

When promoting your gym franchise, you must ensure all advertising:

  • Is truthful and not misleading

  • Complies with Australian Consumer Law (ACL)

  • Includes any necessary disclaimers (e.g. results may vary)

Unethical advertising, like false fitness guarantees, can lead to heavy fines and damage your brand reputation.


Franchise Code of Conduct

All franchise businesses in Australia must comply with the Franchising Code of Conduct, enforced by the Australian Competition and Consumer Commission (ACCC).

You must receive a:

  • Disclosure Document (at least 14 days before signing)

  • Copy of the Franchise Agreement

  • Franchisee Manual or guide (if provided by the franchisor)

This helps ensure transparency and allows you time to understand your legal obligations.


Working with an Expert Team

Legal compliance may feel overwhelming, especially for first-time business owners. That’s why it’s important to work with:

  • A franchise lawyer

  • An accountant familiar with franchise finances

  • Your franchise support team (like Stepz Fitness HQ) to guide you through setup

The right team will help you avoid costly mistakes and get your gym up and running with confidence.


Thinking About Owning a Gym?

Stepz Fitness makes starting your own gym simple. With our proven franchise model, legal setup guidance, and ongoing support, we take the guesswork out of launching a fitness business. 

Explore your path to ownership today by downloading out our free info pack.


Key Takeaways

  • A gym franchise requires a legally binding agreement and registration with ASIC.

  • You'll need to comply with local zoning laws, health and safety rules, and data privacy regulations.

  • Public liability and workers’ compensation insurance are must-haves.

  • Employment contracts and WHS compliance are essential to legal operation.

  • All franchisees in Australia must comply with the Franchising Code of Conduct.

FAQ

Q: Do I need any qualifications to open a gym franchise in Australia?
Not necessarily but your staff may need qualifications if you're offering personal training or specialised classes. You’ll need to comply with employment laws and make sure you hire appropriately qualified team members.

Q: Can I open a gym in a residential area?
This depends on your local council's zoning regulations. It’s essential to check these before signing a lease.

Q: How long does it take to meet all the legal requirements?
With support from your franchise team and a good lawyer, the legal setup can usually be completed within 2–3 months.

Q: Do I need a lawyer to open a franchise?
It’s highly recommended. A lawyer ensures your franchise agreement is fair and that you're meeting all legal obligations from the start.

KJ Gonzales
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