Sapna has completed a Bachelor of Arts/Laws. Since graduating, she's worked primarily in the field of legal research and writing, and she now writes for Sprintlaw.
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Thinking about opening a physical shop? A brick and mortar store can be a powerful way to connect with customers, showcase your products in real life, and build a local brand presence.
At the same time, running a store in Australia comes with unique legal and operational steps - from leasing a premises to meeting consumer, privacy and workplace obligations.
In this guide, we’ll explain what a brick and mortar store actually is, whether it suits your business, and the Australian legal requirements to keep in mind. We’ll also outline key documents you should have in place before you open your doors.
What Is A Brick And Mortar Store?
A brick and mortar store is a physical retail location where customers can visit, browse and buy products or services in person. Think of traditional shops on a high street, pop-up stores in a shopping centre, or service-based storefronts like salons or repair shops.
Unlike online-only retailers, brick and mortar stores rely on in-person foot traffic and a physical customer experience. Many modern retailers combine both: a store you can visit, plus an online shop.
For many businesses, a physical presence builds trust, allows hands-on product experiences, and can lift average order values through personalised service.
Is A Brick And Mortar Store Right For Your Business?
Before signing a lease, it’s worth testing whether a physical storefront suits your goals and budget. A store can be a fantastic growth lever - but only when the numbers and customer demand stack up.
Pros
- Brand experience and trust: Customers can touch products, ask questions, and engage with your team.
- Local visibility: Street frontage and signage can attract walk-ins and repeat customers.
- Higher engagement: In-person upsells, fittings, demos and services can lift conversion and basket size.
Challenges
- Overheads: Rent, fit-out, utilities, insurance, staff and ongoing maintenance add up quickly.
- Operational complexity: Rosters, deliveries, cash handling, refunds and repairs need tight processes.
- Compliance: Retail leases, workplace safety, consumer rights and privacy obligations apply from day one.
Plan Before You Commit
Start with a simple business plan that covers:
- Your target customer, location, and expected foot traffic.
- Competitor landscape and differentiation (price, product mix, service).
- Projected costs and margins (including rent and staffing).
- Supply chain and inventory: ordering cycles, minimum quantities, and storage.
- Risk management: cash flow, seasonality, theft prevention and policies for refunds/returns.
Putting these details on paper will help you decide if a permanent store, a pop-up, or a shop-in-shop arrangement makes most sense at this stage.
How Do You Set Up A Brick And Mortar Store In Australia?
Here’s a practical, step-by-step view of the setup process. Your exact path may vary based on your location and industry, but these steps cover the usual journey.
1) Choose Your Business Structure
Decide whether you’ll operate as a sole trader, partnership or company. Many retailers start as a sole trader for simplicity, then shift to a company as they grow for limited liability and investment options. If you plan to hire staff, sign a lease and build a brand, a company structure is a common choice for risk management.
When you’re ready to incorporate, you can streamline the process with a professional Company Set Up.
2) Register Your ABN And Name
Apply for an ABN and register your business name so customers can legally transact with you under a brand that isn’t your personal name. You can handle the name registration alongside your structure with Business Name services.
3) Secure And Review Your Lease
Location matters, but so does the detail in your lease. Retail leases often include rent review mechanisms, fit-out obligations, make-good clauses, permitted use and signage rules. It’s important to understand what you’re agreeing to before you sign.
To reduce risk, have a lawyer complete a Commercial Lease Review before you commit.
4) Fit-Out, Signage And Council Approvals
Shop fit-outs may require local council approvals or landlord consent, particularly if you’re changing the use of the premises, altering plumbing/electricals or adding external signage. Always check the planning and building requirements for your area and your landlord’s fit-out guidelines.
5) Set Up Your Retail Systems
Choose your POS, inventory and receipt systems. Decide your returns policy, warranty process and customer service standards and make sure they align with your obligations under the Australian Consumer Law.
6) Build Your Online Presence
Even if you’re primarily in-store, customers will look you up online. If you collect customer details or sell online, you’ll need a Privacy Policy and Website Terms and Conditions that reflect what your store actually does.
7) Hire, Train And Document
Put the right contracts and workplace policies in place, and train staff on service standards, safety, refunds and privacy. Solid onboarding helps you deliver a consistent experience and stay compliant.
What Laws Apply To Brick And Mortar Retailers In Australia?
Several core legal areas apply to most physical stores. The specifics can vary by state and industry, but these are the essentials to have on your radar.
Retail Leases And Premises
- Retail lease legislation (which differs by state) sets rules around disclosure, rent reviews, outgoings and lease terms. Read landlord disclosure documents carefully and keep copies of all notices and agreements.
- Check permitted use, trading hours, and signage rules in your lease before planning your operations.
- If you’re in NSW, the Retail Leases Act (NSW) outlines special protections for retail tenants.
Australian Consumer Law (ACL)
- The ACL governs product safety, consumer guarantees, refunds, repairs and replacements, and how you advertise prices and promotions.
- Avoid misleading or deceptive conduct in your marketing and signage. The general prohibition is explained in this guide to Australian Consumer Law.
- Make sure staff know your refund process and when customers are entitled to a remedy under the law, not just store policy.
Privacy And Customer Data
- If you collect customer information (e.g. loyalty programs, email lists, CCTV that identifies individuals), you need to handle it lawfully and transparently.
- Publish a clear, accurate Privacy Policy and train staff on data access and handling.
Employment And Workplace Safety
- Hiring staff triggers Fair Work obligations: minimum pay, rostering, breaks, leave entitlements and correct classification under any applicable award.
- Issue a written Employment Contract to each employee and maintain up-to-date workplace policies for conduct, safety and grievances.
- Meet WHS duties: safe layout, manual handling training, incident reporting, and emergency procedures.
In-Store Technology And Surveillance
- Many retailers use CCTV or body-worn devices to deter theft. Make sure your signage and processes comply with state-based surveillance and security camera laws, and that any footage is stored securely and used appropriately.
Taxes And Receipts
- Register for GST if required, issue compliant receipts/tax invoices, and keep accurate records for reconciliation and BAS reporting.
- Display prices clearly and include GST in displayed prices if you are registered.
If your store sells regulated products (for example, alcohol, tobacco, pharmaceuticals or cosmetics), additional licences and standards will apply. Factor these into your timeline before you sign a lease or order fit-out equipment.
What Legal Documents Does A Brick And Mortar Store Need?
Not every store needs every document on this list, but most retailers will need several of them. Having tailored, plain-English documents in place protects your business and sets clear expectations with customers, staff and suppliers.
- Customer Terms And Returns Policy: A clear in-store policy that aligns with consumer guarantees and sets out how you handle refunds, exchanges and repairs.
- Website Terms And Conditions: If you have a website or online store, your Website Terms and Conditions set ground rules for users, orders and liability.
- Privacy Policy: Explains what personal information you collect (in-store and online), why, and how you store and share it. Use a tailored Privacy Policy that matches your actual practices.
- Employment Contract: Each staff member should have a written Employment Contract covering duties, pay, hours, confidentiality and termination.
- Workplace Policies: A short staff handbook or Workplace Policy suite for safety, conduct, breaks, leave requests, use of devices and handling customer complaints.
- Supplier Agreements: Written terms with wholesalers and distributors covering pricing, delivery, defects, title and risk, returns, and termination.
- Commercial Lease And Ancillary Deeds: Your lease, disclosure statements and any fit-out or incentive deeds - reviewed and negotiated before signing.
- Brand Protection: Consider registering your name and logo as a trade mark to protect your brand identity as you grow.
- Company Documents (if applicable): If you operate through a company, ensure your constitution and any shareholders arrangements are in place and consistent with how you intend to run the business.
Well-drafted documents don’t just tick a legal box - they help you train staff, reduce disputes, and present a professional, consistent experience to your customers.
Should You Buy An Existing Store Or Franchise Instead?
If you want the benefits of a physical presence without building everything from scratch, two alternatives are common: buying an existing store or joining a franchise network.
Buying An Existing Store
This can fast-track revenue and give you a proven location and customer base. You’ll need to review the lease terms, transfer of assets and stock, employee entitlements, and any supplier contracts. A thorough due diligence and a solid sale agreement are essential.
Joining A Franchise
Franchises offer brand recognition, systems and training. In return, you’ll follow the franchisor’s model and pay fees. If you go down this path, you’ll be provided disclosure documents and a franchise agreement - take the time to understand your obligations, performance clauses, territory, marketing contributions, and exit rights.
Whichever route you choose, factor legal review into your budget and timeline. It’s easier to negotiate strong terms up front than to fix issues later.
Key Takeaways
- A brick and mortar store is a physical retail location that delivers an in-person experience - great for brand trust and engagement, but with higher overheads and more compliance.
- Plan before you commit: assess your market, location, costs, staffing and inventory so you know a physical storefront makes commercial sense.
- Set up correctly from day one: choose a structure, register your ABN and name, and have your lease reviewed before you sign.
- Know your legal obligations: comply with retail lease rules, the Australian Consumer Law, privacy requirements, workplace laws and WHS duties.
- Put core documents in place: customer terms, Privacy Policy, Website Terms and Conditions, Employment Contracts, workplace policies and supplier agreements.
- Consider alternatives like buying an existing store or franchising - but do proper due diligence and get key agreements reviewed.
If you’d like a consultation on setting up a brick and mortar store in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.