What should you check before buying a cleaning business?

Written by upcover's editorial team · Updated November 2026

Before buying a cleaning business, buyers commonly check client agreements, staff entitlements, equipment debts and financial records.

A cleaning business for sale may be a domestic run, a commercial operation with staff or a franchise. New owners also commonly review insurance for cleaning businesses before they take over.

Key takeaways:

• Due diligence when buying a business commonly looks at records, client agreements, staff, assets, licences and insurance.
• Buyers commonly have a lawyer check whether client agreements can move to a new owner.
• Transferring staff may bring recognised service and annual leave balances with them.
• Cleaning franchise buyers receive set documents and usually have a cooling-off period under the Franchising Code of Conduct.

What does due diligence involve when buying a cleaning business?

Business Queensland describes due diligence as "taking reasonable steps to make sure that you are not making risky or poor decisions".

Due diligence when buying a business: the checklist

If you're taking over a cleaning business, you can request a quote online or speak to an upcover team member.

Do client agreements transfer when you buy a cleaning business?

Whether client agreements move to a new owner depends on what each agreement says and how the parties structure the sale.

A domestic cleaning run may rest on handshake arrangements rather than written agreements, so talking to existing customers, as business.gov.au suggests, may help. Buyers commonly have a lawyer read any written agreements.

Client concentration is the share of revenue that comes from the largest clients. If one commercial client provides much of the revenue, losing that client after settlement may reduce income sharply.

What happens to staff when you buy a cleaning business?

Staff who move to the new owner may bring recognised service and leave balances with them. The Fair Work Ombudsman's transfer of business conditions include an employee starting with the new employer "within 3 months" of leaving the old one. Another is that the duties are "the same or nearly the same".

The Cleaning Services Award (MA000022) applies to "employers in the contract cleaning services industry and their employees who fit within the classifications of the award".

Leave and service on a transfer of business

On a transfer of business, a new employer "has to recognise an employee's service with the old employer when working out most of their entitlements".

The Fair Work Ombudsman says "annual leave that accumulated with the old employer will be carried across to the new employer". Where the employers are not associated entities, the new employer "can decide not to recognise an employee's service with the old employer". In that case the old employer pays out untaken annual leave.

Broadly, being an associated entity "involves one entity having a controlling interest in the other" (Fair Work Ombudsman). Buyers commonly review leave balances, and how the sale contract treats them, with an accountant or lawyer.

How do you check the financials of a cleaning business for sale?

business.gov.au suggests you "examine the past three to five years of financials" when buying a business. If the seller cleans in the business, a common question is whether the profit figures include a wage for those hours. Buyers commonly review these figures with an accountant.

Which equipment, vehicles and assets come with the sale?

The sale contract sets out which assets come with the business. Business Queensland says a draft contract provides information about the "assets and liabilities you are purchasing". For a cleaning business, that may include floor machines, vacuums, pressure washers, vans and the client database.

business.gov.au suggests asking whether there are "debts owing on assets that are registered on the Personal Property Securities Register".

Which licences and registrations transfer when you buy a cleaning business?

Some registrations can move to a buyer, while others stay with the seller. business.gov.au says "you cannot transfer an ABN and the new business owner will have their own".

A business name can move through ASIC, and upcover's guide to registering or transferring a business name explains the process.

In Victoria, the Labour Hire Authority says "Companies that supply workers to perform cleaning activities at commercial premises are labour hire providers". Under Victorian law, labour hire providers must hold a licence. A buyer of a Victorian commercial cleaning business can check with the authority what applies after the sale.

What should you check before you buy a cleaning franchise?

If you buy a cleaning franchise, the Franchising Code of Conduct sets out documents the franchisor gives you before you sign. According to the ACCC, these include an information statement, the franchise agreement, the disclosure document and a copy of the code. A "mandatory 14-day waiting period" follows, including for transfers of an existing agreement to a new franchisee.

"A franchisee may terminate a franchise agreement within 14 days of entering into the agreement (the cooling-off period)", according to the ACCC. For a transferred franchise, the new franchisee can give written notice to end the agreement within 14 days of becoming the franchisee. If they take possession and control of the business sooner, the deadline is that day.

The ACCC's information statement for prospective franchisees recommends legal, accounting and business advice from professionals with expertise in franchising.

Questions to ask when buying a business in the cleaning industry

Common questions to ask when buying a business, several from the Business Queensland due diligence checklist, include (non-exhaustive):

• Why do you want this cleaning business, and do you have the skills to run it?
• Why is the seller selling?
• Will the seller provide training after the purchase, and for how long?
• Is the seller prepared to sign an agreement not to compete with you?
• How much of the price is goodwill?

Insurance to consider when buying a cleaning business

Cleaning business owners commonly consider insurance for liability to others, injury to staff, equipment and vehicles. Cover depends on the policy and insurer you choose. Check the policy wording and its terms and conditions for what is and isn't included.

Whether any of the seller's existing policies can continue after the sale is a question for an upcover team member or an insurance broker.

The insured on the schedule should match the business a claim is made against. If you trade as a sole trader but the schedule names a company, or the reverse, the insurer may question whether the policy responds, as the entity does not match. This should be the trustee (if you operate through a corporate trust), not the trust, as well as the Pty Ltd and the parent company or operating entity.

If you have multiple entities, always try to list them all and ask your insurance broker or the upcover team to help you with this. upcover has separate pages on commercial cleaning insurance and house cleaner insurance, and a guide to insurance for commercial cleaning businesses.

Insurance commonly arranged by cleaning businesses

Public liability insurance is designed to cover claims if someone is injured or their property is damaged in connection with your business. A client slipping on a freshly mopped floor is one example, subject to the policy terms. Public liability insurance is commonly arranged as public and products liability insurance.

Products liability insurance is designed to cover claims for injury or damage caused by a product you made, sold or supplied, once it has left your hands.

Care, custody and control is a benefit commonly included under public liability insurance. It may respond to property damage claims where client property has been left in your care. Whether a policy includes this benefit, and its sub-limit (a smaller cap inside the overall policy limit), varies between policy wordings, so always check with your insurance broker or the team at upcover.

Workers' compensation insurance is designed to cover work-related injury or illness of employees. Workers' compensation insurance is required where workers fall within the relevant state or territory scheme (Safe Work Australia). Who counts as a worker, and any exemptions, depend on your state or territory scheme.

A business pack bundles several covers, such as property and public liability, into one policy. Options may include a portable equipment section, which is designed to cover equipment you take to client sites against insured loss or damage. Where the equipment is covered, and the limits, vary between policies.

Commercial motor vehicle insurance is designed to cover a vehicle used for business, such as a van carrying cleaning equipment.

Personal accident and sickness insurance may provide benefits to help protect your income if injury or illness stops you working, depending on the policy.

What does public liability insurance commonly exclude?

Exclusions commonly include, but are not limited to:

• liability you take on under a contract that would not otherwise exist under the law, known as a contractual liability exclusion
• damage to the exact property being worked on, under a care of property being worked on exclusion
• injury to yourself or your employees, which generally sits with workers' compensation or personal accident insurance
• fines and penalties that cannot be insured at law
• liability arising from using a registered motor vehicle. Injury to others caused by the vehicle generally sits with third party personal injury insurance, which is "often part of your vehicle registration fee" (business.gov.au). Damage to their property may sit with commercial motor vehicle insurance, depending on the cover arranged.
• dishonest, fraudulent or criminal acts by you (dishonesty by an employee may sit under the crime or fidelity section of a management liability policy, designed to cover losses from employee dishonesty, where you arrange one)

Important: This list is not exhaustive. Exclusions vary between insurers. Always refer to the policy wording and its terms and conditions for the exclusions that apply to you, and if you have questions you should speak to your insurance broker or the upcover team.

How upcover can help

upcover arranges business insurance for cleaning businesses. upcover works with 80+ insurance partners and can arrange quotes from a range of insurers.

• 70,000+ businesses covered
• 4.9/5 customer rating
• Certificate of currency available once your policy is confirmed

If you're buying a cleaning business, you can get a quote for insurance for cleaning businesses or speak to an upcover team member.

Frequently asked questions

What documents should a seller provide when selling a cleaning business?

Buyers commonly ask a seller for three to five years of financials, including tax returns, BAS, balance sheets and profit and loss records. For a cleaning business, buyers also ask for client agreements, staff records, an equipment register and licence details.

What happens to employee leave when buying a cleaning business?

When staff transfer with a cleaning business, the Fair Work Ombudsman says accumulated annual leave "will be carried across to the new employer". Where the employers are not associated entities and the new employer doesn't recognise prior service, the old employer pays out untaken annual leave.

What is a Personal Property Securities Register check when buying a business?

A Personal Property Securities Register (PPSR) check is a search for any security interest a lender may have registered against equipment, vehicles or other goods. Skipping the search puts a buyer "at risk of the property being repossessed", according to the PPSR.

What is different about buying a cleaning franchise?

Buying a cleaning franchise brings in the Franchising Code of Conduct. The ACCC says franchisors give the disclosure document, the franchise agreement and other documents before a 14-day waiting period. A franchisee can usually end a new agreement within a 14-day cooling-off period.

Which insurance do cleaning business owners commonly arrange after buying a cleaning business?

Cleaning business owners commonly arrange public liability insurance and, where workers fall within the relevant state or territory scheme, workers' compensation insurance. Some also consider a business pack, commercial motor vehicle insurance and personal accident and sickness insurance.

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_{The information in this article is general information only and does not take into account your objectives, financial situation or needs. It is not legal, tax or financial advice. Rules on transfers of business, franchising and business registrations are set by law and explained by the Fair Work Ombudsman, the ACCC and business.gov.au. These rules can change. Before deciding whether a product is right for you, read the policy wording and its terms and conditions. For commercial motor vehicle insurance and personal accident and sickness insurance, also read the Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services Guide (FSG). upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}