The chain is facing 22 charges of breaching visa conditions after hiring about 20 students from Indonesia over 2 1/2 years.
The Department of Immigration and Citizenship says the students have been working illegally in manager Anni Kartawidjaja's stores in Melbourne's southeast.
Overseas students were also unlawfully working at two grocery stores owned by Ms Kartawidjaja, according to the department.
The manager is accused of enlisting the help of five of her senior employees to carry out a scam.
The department expects more than 90 charges to be laid as a result of its two-year investigation.
Ms Kartawidjaja is accused of organising for the Indonesians to travel to Australia, where the majority were said to have lived at her properties while paying rent, phone and heating bills as salary deductions.
Investigators have gathered evidence they say shows that management at the outlets were told to turn a blind eye to the illegal workers.
The charges each carry a penalty of up to a year's imprisonment.
A department spokesman said: "It is imperative that employers understand they may be penalised for compromising the integrity of visa programs.
"The department's focus is to address the actions of businesses that wilfully take part in illegal work."
Nando's Australia has 271 restaurants, employing about 5000 people.
Kim Russell, marketing director of Nando's, said: "We have just been made aware of these allegations by the Department of Immigration.
"We believe the allegations are in relation to one franchisee of Nando's Australia," she said.
"We are not aware of the details of the allegations but are in the process of investigating the situation with the franchisee. We have strict policies around lawful employment and fair work practices."
Ms Kartawidjaja and her employees will appear at Moorabbin Magistrates' Court on August 7.
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