Competition and Consumer (Industry Codes—Franchising) Regulations 2024 (Cth)

Competition and Consumer (Industry Codes—Franchising) Regulations 2024

made under the

Competition and Consumer Act 2010

Compilation No. 1

Compilation date:21 October 2025

Includes amendments:F2025L01250

About this compilation

This compilation

This is a compilation of the Competition and Consumer (Industry Codes—Franchising) Regulations 2024 that shows the text of the law as amended and in force on 21 October 2025 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. Any uncommenced amendments affecting the law are accessible on the Register ( saving and transitional provisions

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Presentational changes

The Legislation Act 2003 provides for First Parliamentary Counsel to make presentational changes to a compilation. Presentational changes are applied to give a more consistent look and feel to legislation published on the Register, and enable the user to more easily navigate those documents.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. Any modifications affecting the law are accessible on the Register.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents

Chapter 1PreliminaryPart 1Preliminary1Name

This instrument is the Competition and Consumer (Industry Codes—Franchising) Regulations 2024.

3Authority

This instrument is made under the Competition and Consumer Act 2010.

4Simplified outline of this instrument

This instrument prescribes a mandatory industry code for the franchising industry.
The Code requires franchisors, franchisees and prospective franchisees:
(a)
to act in good faith towards one another; and
(b)
to do certain things, and observe certain cooling‑off periods, before entering into, renewing, extending, transferring or terminating franchise agreements; and
(c)
to do certain things in relation to disputes and dispute resolution.
The Code also includes:
(a)
requirements about the terms of franchise agreements; and
(b)
particular requirements for new vehicle dealership franchise agreements; and
(c)
requirements relating to the Franchise Disclosure Register; and
(d)
civil penalty provisions for contraventions of requirements.
The Code also confers functions on:
(a)
the Australian Small Business and Family Enterprise Ombudsman in relation to the Code; and
(b)
the Chairperson of the Australian Competition and Consumer Commission in relation to the Franchise Disclosure Register.

Part 2Definitions6Definitions

Note: A number of expressions used in this instrument are defined in the Act, including the following:
(a) contract;
(b) corporation;
(c) personal information;
(d) supply.
(1)
In this instrument:
ABN has the same meaning as in the A New Tax System (Australian Business Number) Act 1999.
Act means the Competition and Consumer Act 2010.
ADR practitioner means a conciliator or mediator.
ADR process means conciliation or mediation.
ANZSIC division and subdivision codes means the division and subdivision codes for an industry that are specified in the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (Revision 2.0), published by the Australian Bureau of Statistics on 26 June 2013.
Note: The Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (Revision 2.0) could in 2024 be viewed on the Australian Bureau of Statistics website ( for a franchisor, means a person:
(a)
who:
(i)
is a director or related body corporate, or a director of a related body corporate, of the franchisor; or
(ii)
for a franchisor that is a proprietary company (within the meaning of the Corporations Act)—directly or indirectly owns, controls, or holds with power to vote, at least 15% of the issued voting shares in the franchisor; or
(iii)
is a partner of the franchisor; and
(b)
whose relationship with the franchisor is relevant to the franchise system, including because:
(i)
the person supplies goods or services to a franchisee; or
(ii)
the person gives the franchisee a right to occupy premises, whether under a lease or otherwise; or
(iii)
the person owns intellectual property used in the franchise system; or
(iv)
the person is involved in market research, market testing, market development, sales promotion or management of the franchise system.
Code means the industry code set out in Chapter 2.
complainant: see section 70.

Co‑operatives National Law means the Law set out in the appendix to the Co‑operatives (Adoption of National Law) Act 2012 (NSW), as in force on 1 April 2025, and applying in a State or Territory under the following:
(a)
the Co‑operatives (Adoption of National Law) Act 2012 (NSW);
(b)
the Co‑operatives National Law Application Act 2013 (Vic.);
(c)
the Co‑operatives National Law Act 2020 (Qld);
(d)
the Co‑operatives National Law (South Australia) Act 2013 (SA);
(e)
the Co‑operatives National Law (Tasmania) Act 2015 (Tas.);
(f)
the Co‑operatives National Law (ACT) Act 2017 (ACT);
(g)
the Co‑operatives (National Uniform Legislation) Act 2015 (NT).
Corporations Act means the Corporations Act 2001.
disclosure document means a document created in compliance, or purported compliance, with section 20.
engage in conduct means:
(a)
do an act; or
(b)
omit to perform an act.
extend:
(a)
in relation to the scope of a franchise agreement, means a material change to:
(i)
the terms and conditions of the agreement; or
(ii)
the rights of a person under or in relation to the agreement; or
(iii)
the liabilities that would be imposed on a person under or in relation to the agreement; or
(b)
in relation to the term of a franchise agreement, occurs when the period of the agreement is extended, other than because of an option exercisable by the franchisee during the term of the agreement.

Fair Work Act means the Fair Work Act 2009.
Fair Work civil remedy provision means a civil remedy provision within the meaning of the Fair Work Act.
Fair Work related offence provision means a related offence provision within the meaning of the Fair Work Act.
Fair Work serious contravention means a serious contravention within the meaning of the Fair Work Act.
financial year, in relation to a franchisor and a franchise, means a period of 12 months in respect of which financial statements relating to the franchise are prepared for the franchisor.
franchise includes the following:
(a)
the rights and obligations under a franchise agreement;
(b)
a master franchise;
(c)
a subfranchise;
(d)
an interest in a franchise.
franchise agreement: see section 7.
franchisee includes the following:
(a)
a person to whom a franchise is granted;
(b)
a person who otherwise participates in a franchise as a franchisee;
(c)
a subfranchisor in its relationship with a franchisor;
(d)
a subfranchisee in its relationship with a subfranchisor.
franchise system includes a business system in which a franchisor grants a franchise to a franchisee.
franchisor includes the following:
(a)
a person who grants a franchise;
(b)
a person who otherwise participates in a franchise as a franchisor;
(c)
a subfranchisor in its relationship with a subfranchisee;
(d)
a subfranchisor in a master franchise system;
(e)
a subfranchisor in its relationship with a franchisee.
fund administrator, of a specific purpose fund, means:
(a)
the franchisor or master franchisor who controls or administers the fund; or
(b)
if the franchisor or master franchisor has authorised an associate to control or administer the fund for the franchisor or master franchisor—the authorised associate.
industry code has the meaning given by subsection 51ACA(1) of the Act.
interest in a franchise includes a legal or beneficial interest in:
(a)
a franchise agreement or a franchised business, whether arising as a result of a guarantee of a franchisee’s obligations under the agreement or otherwise; or
(b)
shares or voting rights in a corporation, not being a listed corporation (within the meaning of the Corporations Act), that owns a franchised business; or
(c)
units or voting rights in a unit or other trust that owns a franchised business; or
(d)
the capital or income of a partnership that owns a franchised business.
master franchise means a franchise in which the franchisor grants to a subfranchisor the right:
(a)
to grant a subfranchise; or
(b)
to participate in a subfranchise.
motor vehicle means a vehicle that uses, or is designed to use, volatile spirit, gas, oil, electricity or any other power (except human or animal power) as the principal means of propulsion, but does not include a vehicle used, or designed to be used, on a railway or tramway.
Note: Examples of motor vehicles are as follows:
(a) motor car;
(b) motorcycle;
(c) tractor;
(d) motorised farm machinery;
(e) motorised construction machinery;
(f) aircraft;
(g) motor boat.
motor vehicle dealership:
(a)
means a business of:
(i)
buying, selling, exchanging or leasing motor vehicles that is conducted by a person other than a person who is only involved as a credit provider, or provider of other financial services, in the purchase, sale, exchange or lease; and
(ii)
any servicing or repairing of motor vehicles by that business; and
(b)
includes a business of:
(i)
selling motor vehicles that is conducted by a person (for the purposes of this instrument, the franchisee) who sells the motor vehicles as an agent for a principal (for the purposes of this instrument, the franchisor); and
(ii)
any servicing or repairing of motor vehicles by that business.
new light goods vehicle means a new road vehicle of the kind referred to in clause 4.5.5 of the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005.
new passenger vehicle means a new road vehicle of a kind referred to in clause 4.3 of the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005.
new road vehiclehas the same meaning as in section 78 of the Road Vehicle Standards Act 2018.
new vehicle dealership agreement means a motor vehicle dealership agreement relating to a motor vehicle dealership that predominantly deals in new passenger vehicles or new light goods vehicles (or both).
Note: A motor vehicle dealership agreement is taken to be a franchise agreement (see paragraph 7(2)(c)).
obligation to act in good faith: see section 18.
old regulations means the Competition and Consumer (Industry Codes—Franchising) Regulation 2014, as in force before 1 April 2025.
Ombudsman means the Australian Small Business and Family Enterprise Ombudsman.
prospective franchisee means a person:
(a)
who deals with a franchisor for the right to be granted a franchise; or
(b)
who seeks to acquire a franchise business through the transfer of a franchise agreement.
Register means the register established under clause 53 of Schedule 1 to the old regulations.
renew, in relation to a franchise agreement, occurs when the franchisee exercises an option during the term of the agreement to renew the agreement.

respondent: see section 70.
Secretary means the Secretary of the Department that is administered by the Minister administering the Australian Small Business and Family Enterprise Ombudsman Act 2015.
serious offence means:
(a)
an offence under any law of the Commonwealth or a State or a Territory for which, if the act or omission had taken place in the Jervis Bay Territory, a person would be liable, on first conviction, to imprisonment for a period of not less than 5 years; or
(b)
a contravention of any provision of the Corporations Act.
Note: Jervis Bay Territory is mentioned because it is a jurisdiction in which the Commonwealth has control over the criminal law.
specific purpose fund means a fund:
(a)
that is controlled or administered:
(i)
by a franchisor or a master franchisor; or
(ii)
for a franchisor or a master franchisor by an associate for the franchisor or master franchisor; and
(b)
to which, under a franchise agreement, a franchisee is required to pay money (whether the franchisee is a franchisee or subfranchisee of the franchisor or master franchisor); and
(c)
that, under the franchise agreement, must be used for a specified common purpose relating to the operation of the franchised business.
Note: Examples of specific purpose funds could include a marketing fund for advertising or a cooperative fund for information technology.
subfranchisor means a person who is:
(a)
a franchisee in relation to a master franchise; and
(b)
a franchisor in relation to a subfranchise granted under the master franchise.
trade mark has the meaning given by the Trade Marks Act 1995.
Note: A trade mark is a sign (including any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent (or any combination of these)) used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person (see sections 6 and 17 of the Trade Marks Act 1995).
transfer, in relation to a franchise agreement, includes a situation in which:
(a)
the agreement is terminated on the basis that a new franchise agreement is entered into between the franchisor and a prospective franchisee; or
(b)
the franchisee’s rights and obligations under the agreement are assigned to a prospective franchisee; or
(c)
the agreement contemplates a transfer in specified circumstances and those circumstances happen.
virtual attendance technology means any technology that allows a person to attend an ADR process or an arbitration without being physically present at the ADR process or arbitration.
(2)
In this instrument, the following terms have the meanings given by theCorporations Act:
(a)
ACN;
(b)
ARBN;
(c)
body corporate;
(d)
Chapter 5 body corporate;
(e)
consolidated entity;
(f)
director;
(g)
insolvent under administration;
(h)
misconduct;

(i)
officer;
(j)
registered company auditor;
(k)
registered office;
(l)
related body corporate.
7Meaning of franchise agreement
(1)
A franchise agreement is an agreement:
(a)
that takes the form, in whole or part, of any of the following:
(i)
a written agreement;
(ii)
an oral agreement;
(iii)
an implied agreement; and
(b)
in which a person (the franchisor) grants to another person (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services in Australia under a system or marketing plan substantially determined, controlled or suggested by the franchisor or an associate of the franchisor; and
(c)
under which the operation of the business will be substantially or materially associated with a trade mark, marketing or a commercial symbol:
(i)
owned, used or licensed by the franchisor or an associate of the franchisor; or
(ii)
specified by the franchisor or an associate of the franchisor; and
(d)
under which, before starting or continuing the business, the franchisee must pay or agree to pay to the franchisor or an associate of the franchisor an amount including, for example:
(i)
an initial capital investment fee; or
(ii)
a payment for goods or services; or
(iii)
a fee based on a percentage of gross or net income whether or not called a royalty or franchise service fee; or
(iv)
a training fee or training school fee;
but excluding:
(v)
payment for goods and services supplied on a genuine wholesale basis; or
(vi)
repayment by the franchisee of a loan from the franchisor or an associate of the franchisor; or
(vii)
payment for goods taken on consignment and supplied on a genuine wholesale basis; or
(viii)
payment of market value for purchase or lease of real property, fixtures, equipment or supplies needed to start business or to continue business under the franchise agreement.
(2)
For the purposes of subsection (1), each of the following is taken to be a franchise agreement:
(a)
the transfer or renewal of a franchise agreement;
(b)
the extension of the term or the scope of a franchise agreement;
(c)
a motor vehicle dealership agreement.

(3)
However, none of the following in itself constitutes a franchise agreement:
(a)
an employer and employee relationship;
(b)
a partnership relationship;
(c)
a landlord and tenant relationship;
(d)
a mortgagor and mortgagee relationship;
(e)
a lender and borrower relationship.
Part 3Mandatory industry code8Mandatory industry code
For the purposes of section 51AE of the Act, the industry code set out in Chapter 2:
(a)
is prescribed for the purposes of Part IVB of the Act; and
(b)
is declared to be a mandatory industry code.
9Acquisition of property
A provision of this instrument has no effect to the extent (if any) to which the provision’s operation would result in the acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) otherwise than on just terms (within the meaning of that paragraph).
10Franchise agreements to which the Code does not apply
Franchise agreements to which another mandatory industry code applies
(1)
Subject to subsection (2), the Code does not apply to a franchise agreement to which another mandatory industry code, prescribed under section 51AE of the Act, applies.
(2)
However, the Code applies to a franchise agreement to which either of the following industry codes apply:
(a)
the industry code set out in Part 2 of the Competition and Consumer (Industry Codes—Food and Grocery) Regulations 2024;
(b)
the industry code set out in Schedule 1 to the Competition and Consumer (Industry Codes—Unit Pricing) Regulations 2021.
Certain franchise agreements relating to pre‑existing business relationships
(3)
The Code does not apply to a franchise agreement if:
(a)
the franchise agreement is for goods or services that are substantially the same as those supplied by the franchisee before entering into the franchise agreement; and
(b)
the franchisee has supplied those goods or services for at least 2 years immediately before entering into the franchise agreement; and
(c)
sales under the franchise are likely to provide no more than 20% of the franchisee’s gross turnover for goods or services of that kind for the first year of the franchise.
(4)
Subsection (3) ceases to apply to a franchise agreement if:
(a)
sales under the franchise provide more than 20% of the franchisee’s gross turnover for the goods or services for 3 consecutive years; and
(b)
the franchisee notifies the franchisor in writing that paragraph (a) of this subsection applies.
Franchise agreements that form part of arrangements relating to certain co‑operatives or mutual entities
(5)
The Code does not apply in relation to a franchise agreement that forms part of arrangements under which the franchisee is:
(a)
a member of a co‑operative that is entered on a register maintained under:
(i)
the Co‑operatives National Law; or
(ii)
the Co‑operatives Act 2009 (WA), as in force on 1 April 2025; or
(b)
a member with voting rights of a mutual entity (within the meaning of the Corporations Act).
Note: For Co‑operatives National Law, see subsection 6(1). For mutual entity, see section 51M of the Corporations Act.
11Civil penalty provisions of the Code
A provision of Chapter 2 that is of one of the following kinds and sets out at its foot a pecuniary penalty indicated by the words “civil penalty” is a civil penalty provision of the industry code set out in that Chapter for the purposes of Part IVB and section 76 of the Act:
(a)
a subsection;
(b)
a section that is not divided into subsections.
12Reviews
(1)
The Minister must ensure that a review of this instrument is undertaken.

(2)
The review must commence before 1 April 2030.
(3)
The review must assess the role, impact and operation of this instrument.
(4)
The Minister must ensure that a written report of the review is prepared.
(5)
The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.

13Interaction with the Privacy Act 1988

Disclosure of personal information in accordance with item 6(5) of Schedule 1 is authorised for the purposes of Australian Privacy Principle 6.2(b) under the Privacy Act 1988.

Chapter 2Franchising Code of ConductPart 1Preliminary14Purpose of Chapter

This Chapter sets out an industry code that relates to the industry of franchising.

15Purpose of Code

The purpose of this Code is to:
(a)
regulate the conduct of participants in franchising towards other participants in franchising, in particular to address the imbalance of power between franchisors and franchisees and prospective franchisees; and
(b)
improve standards of conduct and practice in the industry to minimise disputes through:
(i)
better disclosure of information, to inform decision‑making; and
(ii)
setting out requirements for franchise agreements; and
(c)
provide a fair and equitable dispute resolution procedure for disputes arising under this Code or a franchise agreement.

16Functions of Australian Small Business and Family Enterprise Ombudsman

The Australian Small Business and Family Enterprise Ombudsman has the following functions in relation to this Code:
(a)
keeping lists of persons who can provide services of arbitration, conciliation or mediation for the purposes of this Code or of a franchise agreement;
(b)
in accordance with this Code, appointing persons who can provide services of arbitration, conciliation or mediation of disputes for the purposes of this Code or a complaint handling procedure of a franchise agreement, on request by one or more of the parties;
(c)
receiving information about disputes that are being, or have been, dealt with under this Code or a complaint handling procedure of a franchise agreement;
(d)
regularly providing to the Minister statistical information relating to disputes that have been or are being dealt with under this Code or a complaint handling procedure of a franchise agreement;
(e)
in accordance with this Code, publicising the names of franchisors who refuse to engage in, or who withdraw from, an ADR process for a dispute.

17Amount of civil penalty for certain contraventions by bodies corporate

(1)
This section has effect for the purposes of the following civil penalty provisions of this Code:
(a)
subsections 34(1) and (2);
(b)
subsections 45(2), (3) and (5);
(c)
subsection 46(2);
(d)
section 64.
(2)
The amount of the pecuniary penalty for a contravention of a civil penalty provision referred to in subsection (1) by a body corporate is the greatest of the following:
(a)
$10,000,000;
(b)
if the Court can determine the value of the benefit that the body corporate, and any body corporate related to the body corporate, has obtained directly or indirectly and that is reasonably attributable to the contravention—3 times the value of that benefit;
(c)
if the Court cannot determine the value of that benefit—10% of the adjusted turnover of the body corporate during the period of 12 months ending at the end of the month in which the contravention occurred.

Part 2Obligation to act in good faith18Obligation to act in good faith

Obligation to act in good faith
(1)
Each party to a franchise agreement must act towards another party with good faith, within the meaning of the unwritten law from time to time, in respect of any matter arising under or in relation to:
(a)
the agreement; and
(b)
this Code.
This is the obligation to act in good faith.
Civil penalty: 600 penalty units.
(2)
The obligation to act in good faith also applies to a person who proposes to become a party to a franchise agreement in respect of:
(a)
any dealing or dispute relating to the proposed agreement; and
(b)
the negotiation of the proposed agreement; and
(c)
this Code.
Matters to which a court may and must have regard
(3)
Without limiting the matters to which a court may have regard for the purpose of determining whether a party to a franchise agreement has contravened subsection (1):
(a)
for all agreements—the court may have regard to:
(i)
whether the party acted honestly and not arbitrarily; and
(ii)
whether the party cooperated to achieve the purposes of the agreement; and
(b)
for a new vehicle dealership agreement—the court must have regard to whether the terms of the agreement are fair and reasonable.
Franchisor must not enter into franchise agreement that includes provision limiting or excluding obligation to act in good faith
(4)
A franchisor must not enter into a franchise agreement that includes a provision that limits or excludes, or purports to limit or exclude, the obligation to act in good faith.
Civil penalty: 600 penalty units.
(5)
A franchisor must not enter into a franchise agreement that includes a provision that limits or excludes, or purports to limit or exclude, the obligation to act in good faith by applying, adopting or incorporating, with or without modification, the words of another document, as in force at a particular time or as in force from time to time, in the agreement.
Civil penalty: 600 penalty units.
Other actions may be taken consistently with the obligation
(6)
To avoid doubt, the obligation to act in good faith does not prevent a party to a franchise agreement, or a person who proposes to become such a party, from acting in the party’s, or the person’s, legitimate commercial interests.
(7)
To avoid doubt, if a franchise agreement does not:
(a)
give the franchisee an option to renew the agreement; or
(b)
allow the franchisee to extend the agreement;
this does not mean that the franchisor has not acted in good faith in negotiating or giving effect to the agreement.

Part 3Requirements before entry into, renewal, extension or transfer of franchise agreementsDivision 1Application19Application of Part – master franchisors

This Part does not apply to a master franchisor in relation to a subfranchisee.

Division 2Disclosure document20Franchisor must create disclosure document

Disclosure document to inform franchisee or prospective franchisee
(1)
A franchisor must create a document relating to a franchise that complies with subsections (3) to (6).
Civil penalty: 600 penalty units.
(2)
The purpose of a disclosure document is to:
(a)
give a prospective franchisee proposing to enter into a franchise agreement information from the franchisor to help the prospective franchisee to make a reasonably informed decision about entering into the agreement; and
(b)
give a franchisee proposing to renew a franchise agreement, or extend the term or scope of a franchise agreement, information from the franchisor to help the franchisee to make a reasonably informed decision about the proposed renewal or extension of the agreement; and
(c)
give a franchisee current information from the franchisor that is material to the running of the franchised business.
Content and form of disclosure document—general
(3)
Information in a disclosure document must:
(a)
comply with the following:
(i)
be set out in the form and order of Schedule 1;
(ii)
use the headings and numbering of Schedule 1;
(iii)
if applicable—include additional information under the heading “Updates”; or
(b)
comply with the following:
(i)
if particular items are applicable—use the headings and numbering of Schedule 1 for those items;
(ii)
if particular items are not applicable—include an attachment that sets out the headings and numbering of Schedule 1 for those items.
Content of disclosure document—significant capital expenditure
(4)
A disclosure document must state:
(a)
whether the franchisor will require the franchisee to undertake significant capital expenditure in relation to the franchised business during the term of the franchise agreement; and
(b)
as much information as practicable about any such expenditure, including the following:
(i)
the rationale for the expenditure;
(ii)
the amount, timing and nature of the expenditure;
(iii)
the anticipated outcomes and benefits of the expenditure;
(iv)
the expected risks associated with the expenditure.
Note: For example, the information could include the type of any upgrades to facilities or premises, any planned changes to the corporate identity of the franchisor’s brand and indicative costs for any building materials.
Signature
(5)
A disclosure document must be signed by the franchisor, or a director, officer or authorised agent of the franchisor.
Note: For when a document may be signed electronically, see section 10 of the Electronic Transactions Act 1999.
Table of contents
(6)
A disclosure document must also have a table of contents based on the items in Schedule 1, indicating the page number on which each item begins. If the disclosure document attaches other documents, the table of contents must list these other documents too.

21Updating disclosure document – general

(1)
This section applies to a franchisor if:
(a)
on the first day of a financial year (the current financial year), the franchisor is a party to a franchise agreement; and
(b)
either:
(i)
the franchisor entered into 2 or more franchise agreements in the previous financial year; or
(ii)
the franchisor intends, or, if the franchisor is a company, its directors intend, to enter into another franchise agreement in the current financial year.
(2)
The franchisor must, within 4 months starting on the first day of the current financial year, update the disclosure document so that it reflects:
(a)
the position of the franchise and the franchisor as at the date of the update; and
(b)
any relevant amendments made to this Code since the disclosure document was created or last updated.
Note: See also section 33 (giving updated disclosure document on request by franchisee).
Civil penalty: 600 penalty units.

Division 3Information statement22Information statement to be given by franchisors

(1)
If a prospective franchisee formally applies or expresses an interest in acquiring a franchised business, the franchisor must give the prospective franchisee a copy of the information statement relating to franchising that is published on the Commission’s website:
(a)
as soon as practicable, and not later than 7 days, after the prospective franchisee formally applies or expresses an interest in acquiring the franchised business; and
(b)
before the franchisor gives the prospective franchisee any of the documents mentioned in subsection 23(2).
Civil penalty: 600 penalty units.
(2)
To avoid doubt, this section does not apply to:
(a)
the renewal of a franchise agreement; or
(b)
the extension of the term or scope of a franchise agreement.
Note: For when information in writing may be given electronically, see section 9 of the Electronic Transactions Act 1999.

Division 4Considering documents23Entering into, renewing and extending franchise agreements

Application
(1)
This section applies to a franchisor if:
(a)
the franchisor proposes to enter into a franchise agreement with a prospective franchisee; or
(b)
the franchisor, or a franchisee (within the meaning of paragraph (a) of the definition of that expression), proposes to:
(i)
renew a franchise agreement; or
(ii)
extend the term or scope of a franchise agreement.
Documents that franchisor must give prospective franchisee
(2)
The franchisor must give the prospective franchisee the following documents:
(a)
a copy of the franchise agreement, in the form in which it is to be executed;
(b)
if:
(i)
premises are leased to the franchisor or an associate of the franchisor; and
(ii)
the franchisor or associate proposes to sublease the premises to the prospective franchisee for the purposes of a franchised business, or to permit the prospective franchisee to occupy the premises for those purposes without a lease;
a copy of:
(iii)
the lease of the premises to the franchisor or associate or, if the franchisor or associate is not in possession of the lease, a summary of the commercial terms negotiated by the franchisor or associate and the lessor of the premises (including any lease incentives); and
(iv)
if the lessor of the premises to the franchisor or associate complies with a requirement by or under a law of a State or Territory to disclose to the franchisor or associate (as lessee) written information relating to the lease—that information or, if the franchisor or associate is not in possession of that information, any information of that kind of which the franchisor is aware;
(c)
if the prospective franchisee has not given the franchisor a written notice under subsection (4)—the documents mentioned in subsection (5).
Note: If it is proposed that the prospective franchisee lease premises from, or occupy premises under another right granted by, the franchisor or an associate, section 50 lets the franchisee terminate the franchise agreement up to 14 days after being given a document setting out the terms of the lease or right to occupy the premises.
Changes to franchise agreement
(3)
If, after giving the prospective franchisee a copy of the franchise agreement, and before the agreement is executed, the franchisor makes a change to the agreement, the franchisor must give the prospective franchisee a copy of the changed agreement.
Documents that prospective franchisee may opt out of receiving
(4)
The prospective franchisee may, by written notice given to the franchisor, opt out of being given the documents mentioned in subsection (5) if:
(a)
the prospective franchisee has, or has recently had, another franchise agreement with the franchisor that is the same or substantially the same as the franchise agreement; and
(b)
the business that is the subject of the franchise agreement is the same or substantially the same as the business that is or was the subject of the other franchise agreement.
(5)
For the purposes of paragraph (2)(c) and subsection (4), the documents are:
(a)
a copy of the disclosure document relating to the franchise:
(i)
if the disclosure document was created in the financial year in which the franchisor gives the prospective franchisee documents under subsection (2)—as created under subsection 20(1); or
(ii)
as most recently updated under section 21 or 33; or
(iii)
if neither subparagraph (i) or (ii) applies—updated to reflect the position of the franchise as at the end of the financial year before the financial year in which the franchisor gives the prospective franchisee documents under subsection (2); and
(b)
a copy of this Code.
Franchise agreement not to be executed until after consideration period
(6)
The franchisor must not execute the franchise agreement with the prospective franchisee before the end of the period (the consideration period) of 14 days after the latest of the following:
(a)
the day the franchisor gives the prospective franchisee the documents required by subsection (2);
(b)
if, after the day mentioned in paragraph (a), the franchisor makes a change to the agreement other than a change mentioned in subsection (7)—the day the franchisor gives the prospective franchisee the changed agreement;
(c)
if, after the day mentioned in paragraph (a) and before the franchise agreement is executed, the franchisor gives the prospective franchisee earnings information in relation to the franchise—the day the franchisor gives the prospective franchisee that information.
Civil penalty: 600 penalty units.
(7)
For the purposes of paragraph (6)(b), the changes are the following:
(a)
a change to give effect to a request by the prospective franchisee;
(b)
a change to fill in required particulars;
(c)
a change to reflect changes of address or other circumstances;
(d)
a change for a clarification of a minor nature;
(e)
a change to correct an error or reference.
Repayment of payments made by prospective franchisee in consideration period
(8)
If, in the consideration period for a franchise agreement:
(a)
the prospective franchisee makes a payment (whether of money or of other valuable consideration) of an amount to the franchisor or an associate of the franchisor in connection with the agreement; and
(b)
the prospective franchisee subsequently gives the franchisor a written notice requesting the repayment of the amount;
the franchisor must repay the amount to the prospective franchisee within 14 days after receiving the request.
Civil penalty: 600 penalty units.

24Transferring franchise agreements

Application
(1)
This section applies to a franchisor if:
(a)
a request is made under section 48 that the franchisor consent to the transfer of an existing franchise agreement to a prospective franchisee; and
(b)
the transfer does not involve entry into a new franchise agreement.
Note: For paragraph (b), see section 23 for transfers that involve entry into a new franchise agreements.

Documents that franchisor must give prospective franchisee
(2)
The franchisor must give the prospective franchisee:
(a)
a copy of the existing franchise agreement; and
(b)
each other document (if any) the franchisor requires the prospective franchisee to sign to give effect to the transfer; and
(c)
if applicable, a copy of the documents mentioned in paragraph 23(2)(b); and
(d)
if the prospective franchisee has not given the franchisor a written notice under subsection (4) of this section—the documents mentioned in subsection 23(5).
Consent not to be given until after 14 day period
(3)
The franchisor must not give the consent before the end of 14 days after the later of the following:
(a)
the day the franchisor gives the prospective franchisee the documents required by subsection (2);
(b)
if, after the day mentioned in paragraph (a) and before the transfer occurs, the franchisor gives the prospective franchisee earnings information in relation to the franchise—the day the franchisor gives the prospective franchisee that information.
Civil penalty: 600 penalty units.
Documents that prospective franchisee may opt out of receiving
(4)
The prospective franchisee may, by written notice given to the franchisor, opt out of being given the documents mentioned in subsection 23(5) if:
(a)
the prospective franchisee has another franchise agreement with the franchisor that is the same or substantially the same as the existing franchise agreement; and
(b)
the business that is the subject of the existing franchise agreement is the same or substantially the same as the business that is the subject of the other franchise agreement.

25Form of documents to be given under this Division

(1)
A person to whom a franchisor must give documents under section 23 or 24 may, before the documents are given, request the franchisor to give the documents in printed form, electronic form or both.
(2)
If a request is made under subsection (1), the franchisor must comply with the request.

Division 5Statements to be received by franchisors26Statements with respect to disclosure document and this Code

A franchisor must not:
(a)
enter into a franchise agreement; or
(b)
renew or transfer a franchise agreement; or
(c)
extend the term or scope of a franchise agreement; or
(d)
enter into an agreement to:
(i)
enter into a franchise agreement; or
(ii)
renew or transfer a franchise agreement; or
(iii)
extend the term or scope of a franchise agreement;
unless the franchisor has received from the franchisee or prospective franchisee (as the case requires):
(e)
a written statement that the franchisee or prospective franchisee has received, read and had a reasonable opportunity to understand the disclosure document and this Code; or
(f)
a written notice under subsection 23(4) or 24(4) (as the case requires).
Civil penalty: 600 penalty units.

27Statements with respect to independent advice

(1)
A franchisor must not enter into a franchise agreement unless the franchisor has received from the prospective franchisee, in respect of advice from each kind of adviser mentioned in subsection (2):
(a)
a signed statement by that kind of adviser to the effect that the adviser has given the prospective franchisee advice about the proposed franchise agreement or franchised business; or
(b)
a signed statement by the prospective franchisee to the effect that the prospective franchisee:

(i)
has been given advice by that kind of adviser about the proposed franchise agreement or franchised business; or
(ii)
is aware of the need to obtain advice from that kind of adviser but has decided not to obtain it.
Civil penalty: 600 penalty units.
(2)
For the purposes of subsection (1), the kinds of advisers are the following:
(a)
an independent legal adviser;
(b)
an independent business adviser;
(c)
an independent accountant.
Exception to subsection (1)
(3)
Subsection (1) does not apply to:
(a)
the renewal of a franchise agreement; or
(b)
the extension of the term or scope of a franchise agreement.
Franchisor may require prospective franchisee to provide statements
(4)
Subsection (1) does not prevent the franchisor from requiring the prospective franchisee to give the franchisor a statement mentioned in paragraph (1)(a) before the franchisor enters into a franchise agreement with the prospective franchisee.

Part 4Franchise agreementsDivision 1Application28Application of Part – master franchisors

(1)
This Part does not apply to a master franchisor in relation to a subfranchisee.
(2)
This section does not limit the effect of sections 31 and 61 (which relate to specific purpose funds).

Division 2Franchisor’s obligationsSubdivision ADisclosure obligations29Copy of lease etc.

Occupying premises under lease
(1)
If a franchisee leases premises from the franchisor or an associate of the franchisor for the purposes of a franchised business, the franchisor or the associate must give the franchisee:
(a)
either:
(i)
a copy of the lease; or
(ii)
a copy of the agreement to lease; and
(b)
details of any incentive or financial benefit that the franchisor or associate is entitled to receive as a result of the lease or agreement to lease.
Civil penalty: 600 penalty units.
(2)
The copy and details must be given within 1 month after the lease or agreement to lease is signed by the parties.
Civil penalty: 600 penalty units.
(3)
If:
(a)
premises are leased to the franchisor or an associate of the franchisor; and
(b)
a franchisee subleases, or a prospective franchisee proposes to sublease, the premises for the purposes of a franchised business; and
(c)
the lessor of the premises to the franchisor or associate complies with a requirement by or under a law of a State or Territory to disclose to the franchisor or associate (as lessee) written information relating to the lease;
the franchisor or associate must, if requested to do so in writing, give the franchisee or prospective franchisee a copy of that information.
Note: A copy must also be given by the franchisor to a prospective franchisee before entering into a franchise agreement (see subsections 23(2) and (6)).
Civil penalty: 600 penalty units.
(4)
The copy requested under subsection (3) must be given as soon as reasonably practicable, and not later than 7 days, after the request is made.
Civil penalty: 600 penalty units.
(5)
If the franchisee occupies, without a lease, premises leased by the franchisor or an associate of the franchisor, the franchisor or the associate must give the following to the franchisee:
(a)
a copy of the franchisor’s lease or agreement to lease or of the associate’s lease or agreement to lease;
(b)
details of any incentive or financial benefit that the franchisor or associate is entitled to receive as a result of the lease or agreement to lease;
(c)
a copy of the documents that give the franchisee the right to occupy the premises;
(d)
written details of the conditions of occupation;
(e)
details of any incentive or financial benefit that the franchisor or associate is entitled to receive as a result of the franchisee’s right to occupy the premises.
Civil penalty: 600 penalty units.
(6)
The copy and details must be given within 1 month after:
(a)
the occupation commences; or
(b)
for the documents mentioned in paragraph (5)(c)—the documents are signed by the parties.
Civil penalty: 600 penalty units.
(7)
If:
(a)
a franchisee occupies, or a prospective franchisee proposes to occupy, without a lease, premises for the purposes of a franchised business under a right given or to be given by the franchisor or an associate of the franchisor; and
(b)
the premises are leased to the franchisor or associate; and
(c)
the lessor of the premises to the franchisor or associate complies with a requirement by or under a law of a State or Territory to disclose to the franchisor or associate (as lessee) written information relating to the lease;
the franchisor or associate must, if requested to do so in writing, give the franchisee or prospective franchisee a copy of that information.
Note: A copy must also be given by the franchisor to a prospective franchisee before entering into a franchise agreement (see subsections 23(2) and (6)).
Civil penalty: 600 penalty units.
(8)
The copy requested under subsection (7) must be given as soon as reasonably practicable, and not later than 7 days, after the request is made.
Civil penalty: 600 penalty units.
Incentive or financial benefit
(9)
In this section, the details of any incentive or financial benefit must include the name of the business providing the incentive or financial benefit.

30Copies of other agreements

(1)
If a franchise agreement requires:
(a)
the franchisee; or
(b)
directors, shareholders, beneficiaries, owners or partners of the franchisee;
to enter into an agreement of a kind mentioned in subsection (2), the franchisor must give the franchisee a copy of the agreement in accordance with subsection (3).
Civil penalty: 600 penalty units.
(2)
For the purposes of subsection (1), the kinds of agreements are the following:
(a)
a lease (other than a lease of premises which is covered by section 29) or hire purchase agreement;
(b)
an agreement under which the franchisee gains ownership of, or is authorised to use, any intellectual property;
(c)
a security agreement, including a guarantee, mortgage, security deposit, indemnity, loan agreement or obligation to provide a bank guarantee to a third party;
(d)
a confidentiality agreement;
(e)
an agreement not to carry on business within an area or for a time after the franchise agreement is terminated.
(3)
For the purposes of subsection (1), the agreement must be given:
(a)
at least 14 days before the day on which the franchise agreement is signed, if it is available at that time; or
(b)
if it is not available at that time—when it becomes available.

31Financial statements for specific purpose funds

(1)
This section applies if a franchise agreement requires the franchisee to pay money to a specific purpose fund.
(2)
The fund administrator of the fund must:
(a)
within 4 months after the end of a financial year, prepare an annual financial statement for the fund for the financial year that complies with subsection (3); and
(b)
give the franchisee a copy of the financial statement within 30 days of preparing it; and
(c)
unless subsection (4) applies in respect of the fund for the financial year:
(i)
within 4 months after the end of the financial year, have the statement audited by a registered company auditor; and
(ii)
give the franchisee a copy of the auditor’s report within 30 days of receiving it.
Civil penalty: 600 penalty units.
(3)
For the purposes of paragraph (2)(a), the statement must detail all of the fund’s receipts and expenses, including:
(a)
sufficient detail of the fund’s receipts and expenses to give meaningful information about:
(i)
sources of income; and
(ii)
items of expenditure, particularly with respect to the specified common purpose; and
(b)
the percentage of the total income spent on each of the following:
(i)
the expenses mentioned in paragraph 61(4)(a);
(ii)
the costs mentioned in paragraph 61(4)(b).
(4)
This subsection applies in respect of a specific purpose fund for a financial year if, within 3 months after the end of the financial year, 75% of the franchisees (whether franchisees or subfranchisees of the franchisor or master franchisor) in Australia who paid money to the fund in the financial year vote to agree that the fund administrator does not have to do the things mentioned in paragraph (2)(c) in respect of the fund for the financial year.

32Franchisee may request updated disclosure document

(1)
A franchisee may, in writing, request a franchisor to give the franchisee a copy of the disclosure document relating to the franchise.
(2)
A request under this section can be made only once every 12 months.
(3)
A request under this section may request that the disclosure document be given in printed form, electronic form or both.

33Giving updated disclosure document on request by franchisee

If a franchisor receives a request from a franchisee in accordance with section 32, the franchisor must:
(a)
update the disclosure document so that it reflects the position of the franchise as at the end of the financial year before the financial year in which the request is made; and
(b)
give the franchisee a copy of the updated disclosure document:
(i)
within 2 months of the date of the request; and
(ii)
in the form or forms (if any) requested by the franchisee.
Civil penalty: 600 penalty units.

34Disclosure of materially relevant facts

Financial details
(1)
If:
(a)
either:
(i)
a statement or declaration referred to in item 21 of Schedule 1 is made; or
(ii)
a document referred to in that item comes into existence; and
(b)
the statement or declaration is not reflected in, or the document is not provided together with, a disclosure document that has been updated under section 21 or 33;
the franchisor must give a franchisee or a prospective franchisee a copy of the statement, declaration or document:
(c)
as soon as reasonably practicable; and
(d)
in relation to a prospective franchisee—before the prospective franchisee enters into a franchise agreement with the franchisor.
Civil penalty:
(a)
for a contravention by a body corporate—the amount under section 17; or
(b)
for a contravention by a person who is not a body corporate—$500,000.
Other matters
(2)
If a disclosure document does not mention a matter mentioned in subsection (3), the franchisor must tell a franchisee or prospective franchisee about the matter, in writing, within a reasonable time (but not more than 14 days) after the franchisor becomes aware of it.
Civil penalty:
(a)
for a contravention by a body corporate—the amount under section 17; or
(b)
for a contravention by a person who is not a body corporate—$500,000.
(3)
For the purposes of subsection (2), the matters are the following:
(a)
change in majority ownership or control of:
(i)
the franchisor or an associate of the franchisor; or
(ii)
the franchise system;
(b)
proceedings by a public agency, a judgment in criminal or civil proceedings or an award in an arbitration against the franchisor, a franchisor director, an associate of the franchisor or a director of an associate of the franchisor, in Australia alleging:
(i)
breach of a franchise agreement; or
(ii)
contravention of the Act; or
(iii)
contravention of the Corporations Act; or
(iv)
unconscionable conduct; or
(v)
misconduct; or
(vi)
an offence of dishonesty;
(vii)
contravention of subsection 558B(1) or (2) of the Fair Work Act; or
(c)
civil proceedings in Australia against the franchisor, a franchisor director, an associate of the franchisor or a director of an associate the franchisor, by at least 10%, or 10, of the franchisees in Australia of the franchisor (whichever is the lower);
(d)
any judgment that is entered against the franchisor or an associate of the franchisor in Australia, and is not discharged within 28 days, for at least:
(i)
for a small proprietary company (within the meaning of the Corporations Act)—$100,000; or
(ii)
for any other company—$1,000,000;
(e)
any judgment that is entered against the franchisor or an associate of the franchisor in a matter mentioned in item 4 of Schedule 1;
(f)
the franchisor or an associate of the franchisor becoming a Chapter 5 body corporate;
(g)
a change in the intellectual property, or ownership or control of the intellectual property, that is material to the franchise system;
(h)
the existence and content of:
(i)
any undertaking given by the franchisor or an associate of the franchisor under section 87B of the Act; and
(ii)
any order made by the Federal Court of Australia under that section in relation to such an undertaking.
(4)
For the purposes of paragraphs (3)(b), (c), (d) and (e), the franchisor must tell the franchisee:
(a)
the names of the parties to the proceedings; and
(b)
the name of the court or tribunal; and
(c)
the case number; and
(d)
the general nature of the proceedings.
(5)
For the purposes of paragraph (3)(f), the franchisor must tell the franchisee the name and address of the administrator, controller, liquidator or restructuring practitioner (within the meaning of the Corporations Act).
Note: Nothing in this Code affects the operation of Part VIIC of the Crimes Act 1914 (which includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them).

Subdivision BNotification obligations (other than for new vehicle dealership agreements)35Application of Subdivision

This Subdivision does not apply to a new vehicle dealership agreement.
Note: For new vehicle dealership agreements, see Division 2 of Part 6.

36End of term arrangements

(1)
The franchisor of a franchise agreement must notify the franchisee, in writing, whether the franchisor intends to:
(a)
extend the agreement; or
(b)
enter into a new franchise agreement with the franchisee; or
(c)
neither extend the agreement nor enter into a new franchise agreement with the franchisee.
(2)
The franchisor’s notice must be given:
(a)
if the term of the franchise agreement is 6 months or longer—at least 6 months before the end of the term of the agreement; and
(b)
if the term of the franchise agreement is less than 6 months—at least 1 month before the end of the term of the agreement.
Civil penalty: 600 penalty units.
(3)
If the franchisor intends to extend the franchise agreement, the franchisor’s notice must include a statement to the effect that, subject to subsection 32(2), the franchisee may request a disclosure document under section 32.
Civil penalty: 600 penalty units.

Subdivision CRecord keeping obligations37Keeping certain information and documents

Things in writing given to a franchisor by a franchisee or prospective franchisee
(1)
If a franchisee or prospective franchisee gives something to a franchisor in writing, as required or permitted by this Code, the franchisor must keep the written thing or a copy of it for at least 6 years after the franchisor receives it.
Civil penalty: 600 penalty units.
Supporting documents for disclosure documents
(2)
If a franchisor:
(a)
makes a statement or claim in the franchisor’s disclosure document; and
(b)
relies on a document (the supporting document) to support the statement or claim;
the franchisor must keep the supporting document for at least 6 years after the disclosure document was most recently provided to a franchisee or prospective franchisee.
Civil penalty: 600 penalty units.
Documents a franchisor is required to give to a franchisee or prospective franchisee
(3)
If a franchisor gives a document to a franchisee or prospective franchisee, as required or permitted by this Code, the franchisor must keep the written thing or a copy of it for at least 6 years after the franchisor gives it to the franchisee or prospective franchisee.
Civil penalty: 600 penalty units.

Division 3Terms of franchise agreements38Franchisor’s legal costs relating to franchise agreement

(1)
A franchisor must not enter into a franchise agreement that has the effect of:
(a)
requiring the franchisee to pay all or part of the franchisor’s costs of legal services relating to preparing, negotiating or executing the agreement or documents relating to the agreement; or
(b)
allowing the franchisor or an associate of the franchisor to require the franchisee to pay all or part of those costs;
other than as permitted under subsection (2).
Civil penalty: 600 penalty units.
(2)
The franchise agreement may require the franchisee to make a payment, before the franchisee starts the franchised business, of a fixed amount of dollars that:
(a)
is specified in the agreement; and
(b)
is stated in the agreement as being for the franchisor’s costs of legal services relating to preparing, negotiating or executing the agreement; and
(c)
does not exceed the reasonable and genuine costs of the services mentioned in paragraph (b); and
(d)
is stated in the agreement not to include any amount for the franchisor’s costs of legal services that will or may be provided, after the agreement is entered into, in relation to preparing, negotiating or executing other documents.

39Prohibition on release from liability etc.

(1)
A franchisor must not enter into a franchise agreement that requires a franchisee to sign:
(a)
a general release of the franchisor from liability towards the franchisee; or
(b)
a waiver of any verbal or written representation made by the franchisor.
Civil penalty: 600 penalty units.
(2)
However, subsection (1) does not prevent a franchisee from settling a claim against the franchisor after entering into a franchise agreement.

40Jurisdiction for settling disputes

(1)
A franchise agreement may contain a section that:
(a)
if a party to the agreement wishes to bring an action or proceedings in relation to a dispute under the agreement, requires the party to bring the action or proceedings in a State or Territory in which the franchised business is based; or
(b)
if a party to the agreement wishes to refer a dispute under the agreement to an ADR process, requires the ADR process to be conducted in a State or Territory in which the franchised business is based.
(2)
A franchisor must not enter into a franchise agreement that contains a section that:
(a)
requires a party to the agreement to bring an action or proceedings in relation to a dispute under the agreement:
(i)
in any State or Territory outside that in which the franchised business is based; or
(ii)
in any jurisdiction outside Australia; or
(b)
requires an ADR process for a dispute under the agreement to be conducted:
(i)
in any other State or Territory outside that in which the franchised business is based; or
(ii)
in any jurisdiction outside Australia.
Civil penalty: 600 penalty units.

41Costs of settling disputes

A franchisor must not enter into a franchise agreement that includes a provision that requires the franchisee to pay costs incurred by the franchisor in relation to settling a dispute (whether the dispute is resolved as mentioned in Part 5 or otherwise).
Civil penalty: 600 penalty units.

42Restraint of trade clause if franchise agreement not renewed or extended

A franchisor must not enter into a franchise agreement that includes (in the agreement, or in another document physically attached to the agreement, or in another document incorporated into the agreement by reference) a restraint of trade clause that would apply if:
(a)
the franchise agreement expires; and
(b)the franchise agreement contained an option for the franchisee to renew or extend the agreement; and
(c)
before the expiry,the franchisee had given written notice to the franchisor seeking to renew or extend the agreement on substantially the same terms as those:
(i)
contained in the franchisor’s current franchise agreement; and
(ii)
that apply to other franchisees or would apply to a prospective franchisee; and
(d)
before the expiry, the franchisee met any conditions contained in the franchise agreement that were required to be met by the franchisee to renew or extend the agreement; and
(e)
immediately before the expiry, the franchisee was not in serious breach of the agreement or any related agreement; and
(f)
the franchisee had not infringed the intellectual property of, or a confidentiality agreement with, the franchisor during the term of the agreement; and
(g)
the franchisor did not renew or extend the agreement; and
(h)
either:
(i)
the franchisee claimed compensation for goodwill because the agreement was not renewed or extended, but the compensation given was merely a nominal amount and did not provide genuine compensation for goodwill; or
(ii)
the agreement did not allow the franchisee to claim compensation for goodwill in the event that it was not renewed or extended.

Civil penalty: 600 penalty units.

43Franchise agreement must provide for compensation for early termination – general

(1)
This section applies to a franchise agreement that is not a new vehicle dealership agreement.
(2)
A franchisor must not enter into a franchise agreement unless the agreement:
(a)
provides for the franchisee to be compensated if the agreement is terminated before it expires because the franchisor:
(i)
withdraws from the Australian market; or
(ii)
rationalises its networks in Australia; or
(iii)
changes its distribution models in Australia; and
(b)
specifies how the compensation is to be determined, with specific reference to the following:
(i)
lost profit from direct and indirect revenue;
(ii)
unamortised capital expenditure requested by the franchisor;
(iii)
loss of opportunity in selling established goodwill;
(iv)
costs of winding up the franchised business.
Civil penalty: 600 penalty units.
(3)
A franchisor must not enter into a franchise agreement unless the agreement contains provision for the franchisee to return, and the franchisor to accept and buy back or compensate the franchisee for, the things mentioned in subsection (4) if the agreement is terminated before it expires because the franchisor:
(a)
withdraws from the Australian market; or
(b)
rationalises its networks in Australia; or
(c)
changes its distribution models in Australia.
Civil penalty: 600 penalty units.
(4)
For the purposes of subsection (3), the things are the following:
(a)
all the outstanding stock of the franchise purchased by the franchisee that was specified by the franchisor and required in order to operate the franchise in accordance with the franchise agreement or any operations manual (however described);
(b)
all the essential specialty equipment, branded product or merchandise purchased by the franchisee that:
(i)
was specified by the franchisor and required in order to operate the franchise in accordance with the franchise agreement or any operations manual (however described); and
(ii)
cannot be repurposed for a similar business.
(5)
A franchisor must not enter into a franchise agreement that contains a provision that purports to exclude any compensation to which the franchisee may be entitled, other than under the agreement, if the agreement is terminated before it expires other than because the franchisee has breached the agreement.
Civil penalty: 600 penalty units.

44Franchise agreement must provide reasonable opportunity for return on franchisee’s investment – general

(1)
This section applies to a franchise agreement that is not a new vehicle dealership agreement.
(2)
A franchisor must not enter into a franchise agreement unless the agreement provides the franchisee with a reasonable opportunity to make a return, during the term of the agreement, on any investment required by the franchisor as part of entering into, or under, the agreement.
Note: If expenditure is disclosed in a disclosure document for a franchise agreement, the circumstances in which the expenditure is likely to be recouped must be discussed (see section 47).
Civil penalty: 600 penalty units.

45Franchise agreement must provide for compensation for early termination – new vehicle dealership agreements

(1)
This section applies to a new vehicle dealership agreement.
(2)
A franchisor must not enter into a new vehicle dealership agreement unless the agreement:
(a)
provides for the franchisee to be compensated if the agreement is terminated before it expires because the franchisor:
(i)
withdraws from the Australian market; or
(ii)
rationalises its networks in Australia; or
(iii)
changes its distribution models in Australia; and
(b)
specifies how the compensation is to be determined, with specific reference to the following:
(i)
lost profit from direct and indirect revenue;
(ii)
unamortised capital expenditure requested by the franchisor;
(iii)
loss of opportunity in selling established goodwill;
(iv)
costs of winding up the franchised business.
Civil penalty:
(a)
for a contravention by a body corporate—the amount under section 17; or
(b)
for a contravention by a person who is not a body corporate—$500,000.
(3)
A franchisor must not enter into a new vehicle dealership agreement unless the agreement contains provision for the franchisor to buy back or compensate the franchisee for the things mentioned in subsection (4) if:
(a)
the agreement is not renewed and the franchisor does not enter into a new new vehicle dealership agreement with the franchisee; or
(b)
the agreement is terminated before it expires because the franchisor:
(i)
withdraws from the Australian market; or
(ii)
rationalises its networks in Australia; or
(iii)
changes its distribution models in Australia.
Civil penalty:
(a)
for a contravention by a body corporate—the amount under section 17; or
(b)
for a contravention by a person who is not a body corporate—$500,000.
(4)
For the purposes of subsection (3), the things are new road vehicles, spare parts and special tools.
(5)
A franchisor must not enter into a new vehicle dealership agreement that contains a provision that purports to exclude any compensation to which the franchisee may be entitled, other than under the agreement, if the agreement is terminated before it expires other than because the franchisee has breached the agreement.
Civil penalty:
(a)
for a contravention by a body corporate—the amount under section 17; or
(b)
for a contravention by a person who is not a body corporate—$500,000.

46Franchise agreement must provide reasonable opportunity for return on franchisee’s investment – new vehicle dealership agreements

(1)
This section applies to a new vehicle dealership agreement.
(2)
A franchisor must not enter into a new vehicle dealership agreement unless the agreement provides the franchisee with a reasonable opportunity to make a return, during the term of the agreement, on any investment required by the franchisor as part of entering into, or under, the agreement.
Note: If expenditure is disclosed in a disclosure document for a franchise agreement, the circumstances in which the expenditure is likely to be recouped must be discussed (see section 47).
Civil penalty:
(a)
for a contravention by a body corporate—the amount under section 17; or
(b)
for a contravention by a person who is not a body corporate—$500,000.

47Discussion about significant capital expenditure disclosed in disclosure document

The franchisor must not enter into, renew or extend the term or scope of a franchise agreement unless the franchisor and the franchisee or prospective franchisee have discussed:
(a)
any significant capital expenditure disclosed in the disclosure document as mentioned in subsection 20(4); and
(b)
the circumstances under which the franchisor considers that the franchisee or prospective franchisee is likely to recoup the expenditure, having regard to the geographical area of operations of the franchisee or prospective franchisee.
Civil penalty: 600 penalty units.

Division 4Transfer of franchise agreements48Request for franchisor’s consent to transfer

(1)
A person may request, in writing, that a franchisor consent to the transfer of a franchise agreement.
(2)
A request must be accompanied by all information that the franchisor would reasonably require and expect to be given to make an informed decision.
(3)
If the franchisor requires further information to make an informed decision, the franchisor may, in writing, request the person to provide specified information relevant to making the decision.

49Franchisor’s consent to transfer

Giving consent
(1)
A franchisor must advise, in writing, a person who has made a request under section 48 for consent to the transfer of a franchise agreement:
(a)
whether consent is given, and if not, give reasons why not; and
(b)
if consent is given—whether the franchisor’s consent is subject to one or more conditions being satisfied.
(2)
A franchisor must not unreasonably withhold consent to the transfer of a franchise agreement.
Note: A franchisor may reasonably withhold consent to the transfer of a franchise agreement in the circumstances provided by subsection (6).
Civil penalty: 600 penalty units.
Consent taken to be given
(3)
If the franchisor does not advise the person, in writing, that the franchisor does not consent to the transfer of the franchise agreement within 42 days of the later of:
(a)
the date the request is made; and
(b)
if the franchisor seeks further information—the date the last of the information is provided to the franchisor;
then:
(c)
the franchisor is taken to have given consent; and
(d)
that consent cannot be revoked under subsection (4).
Revoking consent
(4)
Within 14 days of giving consent, the franchisor may revoke it by advising the person, in writing, that the franchisor’s consent is revoked and the reasons why consent has been revoked.
(5)
A franchisor must not unreasonably revoke the franchisor’s consent to the transfer of a franchise agreement.
Note: A franchisor may reasonably revoke the franchisor’s consent to the transfer of a franchise agreement in the circumstances provided by subsection (6).
Civil penalty: 600 penalty units.
Circumstances in which franchisor’s consent may reasonably be withheld or revoked
(6)
Without limiting the circumstances in which a franchisor’s consent may be reasonably withheld or revoked, a franchisor may reasonably withhold consent, or reasonably revoke consent, to the transfer of a franchise agreement in the following circumstances:
(a)
the prospective franchisee is unlikely to be able to meet the financial obligations that the prospective franchisee would have under the franchise agreement;
(b)
the prospective franchisee does not meet a reasonable requirement of the franchise agreement for the transfer of the franchise agreement;
(c)
the prospective franchisee does not meet the selection criteria of the franchisor;
(d)
the prospective franchisee does not agree, in writing, to comply with the obligations of the franchisee under the franchise agreement;
(e)
the franchisee has not paid or made reasonable provision to pay an amount owing to the franchisor;
(f)
the franchisee has not remedied a breach of the franchise agreement.

Division 5Termination of franchise agreements in cooling off periods50Termination by franchisee – cooling off periods for new franchise agreements

Cooling off period—general
(1)
A franchisee may terminate a franchise agreement within 14 days after entering into the agreement, unless the franchisee has given the franchisor a written notice under subsection (7) opting out of being able to terminate the franchise agreement under this subsection.
Cooling off period—lease or occupancy of premises
(2)
Subsections (3) and (4) apply if, immediately before the franchise agreement is entered into:
(a)
there is a proposal that the franchisor, or an associate of the franchisor:
(i)
lease premises for the franchised business to the franchisee; or
(ii)
allow the franchisee to occupy premises for the franchised business under a right (an occupancy right) other than a lease; and
(b)
the lease or occupancy right is not in force.
(3)
The franchisee may terminate the franchise agreement within 14 days after either of the following, unless the franchisee has given the franchisor a written notice under subsection (7) opting out of being able to terminate the franchise agreement under this subsection:
(a)
the day the franchisee receives from the franchisor or associate the first document setting out the terms of the proposed lease or occupancy right;
(b)
if, on a later day, the franchisee receives from the franchisor or associate a document setting out the terms of the proposed lease or occupancy that are not substantially identical to the terms set out in the first document (excluding changes to the terms that were requested by the franchisee)—that later day.
(4)
The franchisee may terminate the franchise agreement within 14 days after entering into the lease or being granted the occupancy right if:
(a)
before entering into the lease or being granted the occupancy right, the franchisee did not receive from the franchisor or associate a document setting out terms of the proposed lease or occupancy right that are substantially identical to the actual terms of the lease or occupancy right (excluding changes to the actual terms of the lease or occupancy right that were requested by the franchisee); and
(b)
the franchisee has not given the franchisor a written notice under subsection (7) opting out of being able to terminate the franchise agreement under this subsection.
Application of subsections (1), (3) and (4)
(5)
Subsections (1), (3) and (4) do not limit one another.
Note: Those subsections do not provide for the franchisee to terminate another agreement with the franchisor (such as a lease of premises from the franchisor) or an agreement with anyone else.
(6)
Subsections (1), (3) and (4) do not apply to:
(a)
the renewal of an existing franchise agreement; or
(b)
the extension of the term or scope of an existing franchise agreement; or
(c)
the transfer of a franchise agreement that does not involve entry into a new franchise agreement between the prospective franchisee and the franchisor.
Note: Section 52 deals with cooling off after such a transfer.
Franchisee may opt out of cooling‑off period
(7)
The franchisee may, by written notice given to the franchisor, opt out of being able to terminate the franchise agreement under subsection (1), (3) or (4) if:
(a)
the franchisee has, or has recently had, another franchise agreement (the other agreement) with the franchisor that is the same or substantially the same as the franchise agreement; and
(b)
the business that is the subject of the franchise agreement is the same or substantially the same as the business that is or was the subject of the other agreement.

51Repayments by franchisor after termination by franchisee

(1)If a franchisee terminates a franchise agreement under subsection 50(1), (3) or (4), the franchisor must, within 14 days, repay all payments (whether of money or of other valuable consideration) made by the franchisee to the franchisor connected with the agreement, less any amount that may be deducted under subsection (2).
Civil penalty: 600 penalty units.
(2)
The franchisor may deduct an amount equal to the franchisor’s reasonable expenses relating to the termination if those expenses or their method of calculation are set out in the agreement.

52Termination by franchisee – cooling off period for transferred franchise agreements

(1)
This section applies if:
(a)
a franchise agreement is transferred between a person (the old franchisee) who was the franchisee under the agreement and a person (the new franchisee) who becomes the franchisee for the purposes of the agreement; and
(b)
the transfer does not involve a new franchise agreement being entered into by the new franchisee and the franchisor; and
(c)
the new franchisee has not given the old franchisee and the franchisor a written notice under subsection (4).
Note: For a transfer that involves a new franchise agreement being entered into by the franchisor and the person to whom the transfer was made by the old franchisee, see section 50.
(2)
The new franchisee may, by written notice given to the old franchisee and the franchisor before the time mentioned in subsection (3), do all of the following:
(a)
cease to be the franchisee for the purposes of the agreement;
(b)
if the old franchisee can become the franchisee for those purposes again—cause the old franchisee to do so;
(c)
if there was an agreement (the transfer agreement) between the new franchisee and the old franchisee for the purposes of the transfer—terminate the transfer agreement.
(3)
For the purposes of subsection (2), the time is the earlier of the following:
(a)
the end of the period of 14 days starting on the day after the new franchisee becomes the franchisee for the purposes of the franchise agreement;
(b)
the day the new franchisee takes possession and control of the franchised business.
New franchisee may opt out of cooling‑off period
(4)
The new franchisee may, by written notice given to the old franchisee and the franchisor, opt out of being able to do all of the things mentioned in subsection (2) if:
(a)
the franchisee has another franchise agreement (the other agreement) with the franchisor that is the same or substantially the same as the franchise agreement; and
(b)
the business that is the subject of the franchise agreement is the same or substantially the same as the business that is or was the subject of the other agreement.

53Repayments following termination by new franchisee

Application
(1)
This section applies if, by notice given under subsection 52(2), a new franchisee ceases to be the franchisee for the purposes of a franchise agreement.
Repayments from franchisor to new franchisee
(2)
The franchisor must, within the period of 14 days starting on the day after the notice was given, repay all payments (whether of money or of other valuable consideration) made by the new franchisee to the franchisor under the franchise agreement, less any amount that may be deducted under subsection (3).
Civil penalty: 600 penalty units.
(3)
The franchisor may deduct an amount equal to the franchisor’s reasonable expenses relating to the new franchisee ceasing to be the franchisee if those expenses or their method of calculation are set out in the agreement.
Repayments from old franchisee to new franchisee
(4)
The old franchisee must, within the period of 14 days starting on the day after the notice was given, repay all payments (whether of money or of other valuable consideration) made by the new franchisee to the old franchisee under the transfer agreement, less any amount that may be deducted under subsection (5).
Civil penalty: 600 penalty units.
(5)
The old franchisee may deduct an amount equal to the old franchisee’s reasonable expenses relating to the termination of the transfer agreementif those expenses or their method of calculation are set out in the transfer agreement.

Division 6Termination of franchise agreements other than in cooling off periods54Franchisee may propose termination at any time

(1)
A franchisee may, at any time, give the franchisor a written proposal for termination of their franchise agreement on the terms specified in the proposal, despite the agreement. The proposal must set out the reasons for the proposed termination.
(2)
If the franchisor is given a proposal under subsection (1), then, subject to subsections (3) and (4):
(a)
the franchisor must give the franchisee a substantive written response to the proposal within 28 days; and
(b)
if the franchisor’s response is to refuse to terminate, or to refuse to agree to terminate, the franchise agreement on the terms proposed—the response must include the reasons for the refusal.
Note 1: If the response is to refuse to terminate, or to refuse to agree to terminate, the franchise agreement on the terms proposed, a dispute may arise. Under section 70, the dispute can be dealt with under Division 2 of Part 5.
Note 2: Each party to a franchise agreement is under an obligation to act in good faith in relation to the agreement (see section 18).
Civil penalty: 600 penalty units.
(3)
If the franchisor has given the franchisee a substantive written response to a proposal (the earlier proposal) under subsection (2), the franchisor is not required to give the franchisee another response to that proposal.
(4)
However, if the franchisee gives the franchisor another written proposal (the later proposal) for termination of their franchise agreement for a different reason from the reason given for the earlier proposal, the franchisor must comply with subsection (2) in relation to the later proposal.
(5)
This section is not intended to otherwise limit the rights or obligations of the franchisor or franchisee under a law of the Commonwealth or a State or Territory or under the franchise agreement.

55Termination by franchisor – breach by franchisee

(1)
This section applies if:
(a)
a franchisee breaches a franchise agreement; and
(b)
the breach is not a ground for termination mentioned in subsection 57(1) or 58(1); and
(c)
the franchisor proposes to terminate the franchise agreement because of the breach; and

(1)
Whether the franchise is:
(a)
for an exclusive or non‑exclusive territory; or
(b)
limited to a particular site.
(2)
For the territory of the franchise:
(a)
whether other franchisees may own or operate a business that is substantially the same as the franchised business; and
(b)
whether the franchisor or an associate of the franchisor may own or operate a business that is substantially the same as the franchised business; and
(c)
whether the franchisor or an associate of the franchisor may establish other franchises that are substantially the same as the franchise; and
(d)
whether the franchisee may own or operate a business that is substantially the same as the franchised business outside the territory of the franchise; and
(e)
whether the franchisor may change the territory or site of the franchise and if so, the circumstances in which such a change may occur; and
(f)
whether the franchisee could face competition from businesses not associated with the franchisor.

10Supply of goods or services to a franchisee

(1)
For the franchisor’s requirements for supply of goods or services to a franchisee—details of:
(a)
any requirement for the franchisee to maintain a level of inventory or acquire an amount of goods or services; and
(b)
restrictions on acquisition of goods or services by the franchisee from other sources; and
(c)
ownership by the franchisor or an associate of the franchisor of an interest in any supplier from which the franchisee may be required to acquire goods or services; and
(d)
the obligation of the franchisee to accept goods or services from the franchisor, or from an associate of the franchisor; and
(e)
the franchisor’s obligation to supply goods or services to the franchisee; and
(f)
whether the franchisee will be offered the right to be supplied with the whole range of the goods or services of the franchise; and
(g)
conditions under which the franchisee can return goods, and to whom; and
(h)
conditions under which the franchisee can obtain a refund for services provided by the franchisor, and from whom; and
(i)
whether the franchisor may change the range of goods or services, and if so, to what extent; and
(j)
whether the franchisor, a master franchisor (if different from the franchisor), or an associate of the franchisor or master franchisor, will receive a rebate or other financial benefit from a supplier of goods or services to the franchisee; and
(k)
if the franchisor, master franchisor or associate will receive a rebate or other financial benefit described in paragraph (j) from one or more suppliers:
(i)
the nature of the rebate or other financial benefit received from each supplier; and
(ii)
the name of each business providing the rebate or other financial benefit; and
(iii)
the total amount of rebates or other financial benefits received in the previous financial year from each supplier, expressed as a single aggregate percentage of total group purchases from that supplier (not including any purchases made by units of the franchised business operated by the franchisor, master franchisor or associate); and
(l)
whether a rebate or other financial benefit described in paragraph (j) is shared, directly or indirectly, with the franchisee; and
(m)
if a rebate or other financial benefit described in paragraph (j) is shared directly or indirectly with the franchisee:
(i)
the method for working out how much of the rebate or other financial benefit is retained by the franchisor, master franchisor or associate, and how much is shared, directly or indirectly, with the franchisee, described by reference to a percentage of the rebate or other financial benefit, or another method for working out how much is retained, and how much is shared with the franchisee; and
(ii)
a description of each direct and indirect benefit received by the franchisee.
Note: Before a requirement is made under paragraph (b) or (c), the franchisor may notify, or seek authorisation from, the Australian Competition and Consumer Commission (see Part VII of the Act).
(2)
For the purposes of paragraphs 10(1)(j) to (m), a rebate or other financial benefit does not include:
(a)
the price paid by the franchisee, or a part of that price, for the supply of goods or services by the franchisor, master franchisor or associate; or
(b)
any incentive or other financial benefit that the franchisor, master franchisor or associate is entitled to receive in connection with a lease of premises or the franchisee’s right to occupy premises.
(3)
The franchisor is not required to disclose the details referred to in subparagraph 10(1)(k)(iii) in relation to a supplier if:
(a)
the franchisee is permitted to acquire goods or services from sources other than the franchisor without the franchisor’s approval; or
(b)
the whole of the rebate or other financial benefit that will be received by the franchisor, master franchisor or associate from that supplier is to be returned to the franchisee directly as a payment into a specific purpose fund controlled or administered by or for the franchisor.

11Supply of goods or services by a franchisee

(1)
For the franchisor’s requirements for supply of goods or services by a franchisee—details of:
(a)
restrictions on the goods or services that the franchisee may supply; and
(b)
restrictions on the persons to whom the franchisee may supply goods or services; and
(c)
whether the franchisee must supply the whole range of the goods or services of the franchise.
Note: Before a requirement is made under paragraph (a) or (b), the franchisor may notify, or seek authorisation from, the Australian Competition and Consumer Commission (see Part VII of the Act).

12Supply of goods or services – online sales

(1)
Details of whether the franchisee may make available online:
(a)
goods of the same type or brand; or
(b)
services of the same type.
(2)
If goods or services may be made available online by the franchisee, the following information:
(a)
whether the franchise agreement restricts, or places conditions on, the franchisee’s ability to make those goods and services available online;
(b)
whether goods or services may be made available via a third party website, and if so, specified restrictions or conditions by the franchisor on the franchisee’s use of a third party website;
(c)
the extent to which those goods or services may be supplied outside the territory of the franchise.
(3)
Details of whether:
(a)
the franchisor or an associate of the franchisor; or
(b)
other franchisees;
makes, or expects to make, goods or services available online.
(4)
If goods or services are made, or are expected to be made, available online by the franchisor, an associate of the franchisor or other franchisees, the following information:
(a)
the extent to which those goods or services may be supplied in the territory of the franchise;
(b)
in the case of goods or services made available via a third party website—the domain name or URL of the third party website.
(5)
Details of any profit sharing arrangements that apply in relation to goods or services made available online and would affect the franchisee, and whether these arrangements may be unilaterally changed by the franchisor.

13Sites or territories

(1)
The policy of the franchisor, or an associate of the franchisor, for selection of as many of the following as are relevant:
(a)
the site to be occupied by the franchised business;
(b)
the territory in which the franchised business is to operate.
(2)
Details of whether the territory or site to be franchised has, in the previous 10 years, been subject to a franchised business operated by a previous franchise granted by the franchisor and, if so, details of the franchised business, including the circumstances in which the previous franchisee ceased to operate.
(3)
Details of whether the franchisor, or an associate of the franchisor, has an interest in a lease that will be used for the operation of the franchised business, including an interest as a landlord or head lessee, or another interest disclosed under section 29.
(4)
The details mentioned in items 13(2) and 13(3) must be provided:
(a)
in a separate document; and
(b)
with the disclosure document.

14Significant capital expenditure, and payments other than payments to agents

Significant capital expenditure
(1A)
Whether the franchisor will require the franchisee to undertake significant capital expenditure in relation to the franchised business during the term of the franchise agreement.
(1B)
As much information as practicable about any such expenditure, including the following:
(a)
the rationale for the expenditure;
(b)
the amount, timing and nature of the expenditure;
(c)
the anticipated outcomes and benefits of the expenditure;
(d)
the expected risks associated with the expenditure.
Note: For example, the information could include the type of any upgrades to facilities or premises, any planned changes to the corporate identity of the franchisor’s brand and indicative costs for any building materials.
Prepayments
(1)
If the franchisor requires a payment before the franchise agreement is entered into—why the money is required, how the money is to be applied and who will hold the money.
(2)
The conditions under which a payment will be refunded.
Establishment costs
(3)
Details of the range of costs to start operating the franchised business, based on current practice, for the following matters:
(a)
real property, including property type, location and building size;
(b)
equipment, fixtures, other fixed assets, construction, remodelling, leasehold improvements and decorating costs;
(c)
inventory required to begin operation;
(d)
security deposits, utility deposits, business licences, insurance and other prepaid expenses;
(e)
additional funds, including working capital, required by the franchisee before operations begin;
(f)
other payments by a franchisee to begin operations.
(4)
For item 14(3), the details for each payment must include:
(a)
a description of the payment; and
(b)
the amount of the payment or the formula used to work out the payment; and
(c)
to whom the payment is made; and
(d)
when the payment is due; and
(e)
whether the payment is refundable and, if so, under what conditions.
(5)
For item 14(4), if the amount of the payment cannot easily be worked out—the upper and lower limits of the amount.
Other payments
(6)
For each recurring or isolated payment payable by the franchisee to the franchisor or an associate of the franchisor or to be collected by the franchisor or an associate of the franchisor for another person:
(a)
description of the payment; and
(b)
amount of the payment or formula used to work out the payment; and
(c)
to whom the payment is made; and
(d)
when the payment is due; and
(e)
whether the payment is refundable and, if so, under what conditions.
(7)
For each recurring or isolated payment, that is within the knowledge or control of the franchisor or is reasonably foreseeable by the franchisor, that is payable by the franchisee to a person other than the franchisor or an associate of the franchisor:
(a)
a description of the payment; and
(b)
the amount of the payment or formula used to work out the payment; and
(c)
to whom the payment is made; and
(d)
when the payment is due; and
(e)
whether the payment is refundable and, if so, under what conditions.
(8)
For item 14(6) or 14(7), if the amount of the payment cannot easily be worked out—the upper and lower limits of the amount.
(9)
If 2 or more of items 14(1A), 14(1B), 14(1), 14(3) and 14(6) apply to a payment, the information required by those items in relation to that payment need be set out only once.

15Specific purpose funds

(1)
For each specific purpose fund to which the franchisee is required to contribute, the following details:
(a)
the specified common purpose for the fund;
(b)
the kinds of persons who contribute to the fund (for example, franchisee, franchisor, outside supplier);
(c)
how much the franchisee must contribute to the fund and whether other franchisees must contribute at a different rate;
(d)
who controls or administers the fund;
(e)
the kinds of expenses that the fund may be used to meet for the specified common purpose for the fund;
(f)
that subsection 31(2) requires the fund administrator to:
(i)
prepare annual financial statements for the fund for each financial year, and to give the franchisee a copy of the statement for a year within 30 days of preparing it; and
(ii)
unless subsection 31(4) applies in respect of the fund for a year, to have the statement for the year audited by a registered company auditor and to give the franchisee a copy of the auditor’s report within 30 days of receiving it;
(g)
a copy of the most recently prepared annual financial statement for the fund;
(h)
whether the franchisor, master franchisor or an associate of either of them supplies goods or services for which the fund pays and, if so, details of the goods or services;
(i)
whether the franchisor or master franchisor must spend part of the fund on the specified purpose for the benefit of the franchisee’s business in particular.

16Financing

(1)
The material conditions of each financing arrangement that the franchisor, its agent or an associate of the franchisor offers to the franchisee for establishment or operation of the franchised business.
(2)
For item 16(1), the material conditions of a financing arrangement include the following:
(a)
any requirement that the franchisee must provide a minimum amount of unborrowed working capital for the franchised business;
(b)
any requirement that a franchisee must meet a stated debt to equity ratio in relation to the franchised business.

17Unilateral variation of franchise agreement

(1)
The circumstances in which the franchisor has unilaterally varied a franchise agreement in the last 3 financial years (including, if applicable, financial years before this Code came into force), other than variations of a minor nature.
(2)
The circumstances in which the franchise agreement may be varied, unilaterally, by the franchisor in the future.

17AArbitration of disputes

(1)
Whether the franchise agreement provides for arbitration of disputes in a manner consistent with Subdivision C of Division 2 of Part 5 of Chapter 2.

17BWays of ending the franchise agreement early

(1)
A summary of the rights the franchisor has under the franchise agreement to terminate the franchise agreement before it expires, and the circumstances in which those rights may be exercised.
(2)
A summary of the rights the franchisee has under the franchise agreement to terminate the franchise agreement before it expires, and the circumstances in which those rights may be exercised.

18Term of agreement and arrangements to apply at the end of the franchise agreement

(1)
Details of arrangements to apply at the end of the franchise agreement, including:
(aa)
the term of the franchise agreement; and
(a)
whether the prospective franchisee will have an option to:
(i)
renew the franchise agreement; or
(ii)
enter into a new franchise agreement; and
(b)
whether the prospective franchisee will be able to extend the term of the franchise agreement, and if so, the processes the franchisor will use to determine whether to extend the term of the franchise agreement; and
(c)
if the prospective franchisee will have an option to renew the franchise agreement—whether the prospective franchisee will be entitled to compensation at the end of the agreement if it is not renewed and, if so, how that compensation will be determined; and
(d)
details of the arrangements that will apply to unsold stock, marketing material, equipment and other assets purchased when the franchise agreement was entered into, including:
(i)
whether the franchisor will purchase the stock, marketing material, equipment and other assets; and
(ii)
if the franchisor is to purchase the stock, marketing material, equipment and other assets—how prices will be determined; and
(e)
whether the prospective franchisee will have the right to sell the business at the end of the franchise agreement; and
(f)
if the prospective franchisee will have the right to sell the business at the end of the franchise agreement—whether the franchisor will have first right of refusal, and how market value will be determined; and
(fa)
the prospective franchisee’s rights relating to any goodwill generated by the franchisee (including, if the franchisee does not have a right to any goodwill, a statement to that effect); and
(g)
whether the franchisor will consider any significant capital expenditure undertaken by the franchisee during the franchise agreement, in determining the arrangements to apply at the end of the franchise agreement; and
(h)
whether the franchise agreement includes a restraint of trade or similar clause.
(2)
Details of whether the franchisor has, in the last 3 financial years, considered any significant capital expenditure undertaken by franchisees, in determining the arrangements to apply at the end of franchise agreements between the franchisor and those franchisees.
(3)
If the franchisee does not have the option to renew the franchise agreement, the following statement must be included in bold 12 point type:
The franchisee does not have the option to renew the franchise agreement. At the end of the franchise agreement, the franchisor may, but does not have to, extend the term of the agreement. If the franchisor does not extend the term of the agreement, the franchise agreement ends and the franchisee no longer has a right to carry on the franchised business.
(4)
If the franchisee cannot extend the term of the franchise agreement, the following statement must be included in bold 12 point type:
The franchisee cannot extend the term of the franchise agreement. At the end of the franchise agreement, the franchisor may, but does not have to, extend the term of the agreement. If the franchisor does not do so, the franchise agreement ends and the franchisee no longer has a right to carry on the franchised business.
(5)
If the franchisee:
(a)
does not have the option to renew the franchise agreement; and
(b)
cannot extend the term of the franchise agreement;
the following statement must be included in bold 12 point type:
The franchisee does not have the option to renew the franchise agreement and cannot extend the term of the franchise agreement. At the end of the franchise agreement, the franchisor may, but does not have to, extend the term of the agreement. If the franchisor does not extend the term of the agreement, the franchise agreement ends and the franchisee no longer has a right to carry on the franchised business.

19Amendment of franchise agreement on transfer of franchise

(1)
Whether the franchisor will amend (or require the amendment of) the franchise agreement on or before the transfer of the franchise.

20Earnings information

(1)
If the franchisor proposes to give earnings information, the franchisor must give it in the disclosure document or in a separate document attached to the disclosure document.
(1A)
If the franchisor gives earnings information to a prospective franchisee or a franchisee before giving the prospective franchisee or franchisee a copy of the disclosure document relating to the franchise, the franchisor must also give the prospective franchisee or franchisee earnings information in the disclosure document or an attachment to it.
(2)
Earnings information includes the following information:
(a)
historical earnings data for:
(i)
the franchised business; or
(ii)
a franchise in the franchise system;
(b)
if subparagraph (a)(ii) applies—any differences between the franchise in the franchise system and the franchised business;
(c)
projected earnings for the franchised business and the assumptions on which those projections are based;
(d)
any other information from which historical or future earnings information of the franchised business can be assessed.
(2A)
If earnings information is given by the franchisor in the disclosure document or an attachment to it—the following statement:
To the best of the franchisor’s knowledge, the earnings information given is accurate (other than particular earnings information specified in the document as earnings information that the franchisor knows is not accurate).
(3)
If earnings information is not given—the following statement:
The franchisor does not give earnings information about a [insert type of franchise] franchise.

Earnings may vary between franchises.
The franchisor cannot estimate earnings for a particular franchise.
(4)
Earnings information that is a projection or forecast must include the following details:
(a)
the facts and assumptions on which the projection or forecast is based;
(b)
the extent of enquiries and research undertaken by the franchisor and any other compiler of the projection or forecast;
(c)
the period to which the projection or forecast relates;
(d)
an explanation of the choice of the period covered by the projection or forecast;
(e)
whether the projection or forecast includes depreciation, salary for the franchisee and the cost of servicing loans;
(f)
assumptions about interest and tax.

21Financial details

(1)
A statement of the franchisor’s solvency that:
(a)
reflects the franchisor’s position:
(i)
at the end of the last financial year; or
(ii)
if the franchisor did not exist at the end of the last financial year—at the date of the statement; and
(b)
is signed by at least one director of the franchisor; and
(c)
gives the directors’ opinion as to whether there are reasonable grounds to believe that the franchisor will be able to pay its debts as and when they fall due.
(2)
Financial reports for each of the last 2 completed financial years in accordance with sections 295 to 297 of the Corporations Act, or a foreign equivalent of that Act applicable to the franchisor, prepared by the franchisor.
Note: See also items 21(4) to 21(6).
(3)
If:
(a)
the franchisor is part of a consolidated entity that is required to provide audited financial reports under the Corporations Act, or a foreign equivalent of that Act applicable to the consolidated entity; and
(b)
a franchisee requests those financial reports;
financial reports for each of the last 2 completed financial years, prepared by the consolidated entity.
Note: See also items 21(4) to 21(6).
(4)
Items 21(2) and 21(3) do not apply if:
(a)
the statement under item 21(1) is supported by an independent audit provided by:
(i)
a registered company auditor; or
(ii)
if the franchisor is a foreign franchisor—a foreign equivalent for that franchisor;
within 4 months after the end of the financial year to which the statement relates; and
(b)
a copy of the independent audit is provided with the statement under item 21(1).
(5)
If the franchisor or consolidated entity (the entity) has not existed for 2 or more financial years, then instead of providing the financial reports mentioned in item 21(2) or 21(3), the following:
(a)
a statutorydeclaration of the entity’s solvency;
(b)
an independent audit report on the entity’s solvency as at the date of the entity’s declaration.
(6)
If the franchisor or consolidated entity (the entity) was insolvent in either or both of the last 2 completed financial years, the following:
(a)
a statement of the period during which the entity was insolvent;
(b)
a statutorydeclaration of the entity’s solvency;
(c)
an independent audit report on the entity’s solvency as at the date of the entity’s declaration.

22Updates

(1)
Any information given under section 34 that has changed between the date of the disclosure document and the date the disclosure document is given under this Code.

23Receipt

(1)
On the last page of the disclosure document:
(a)
a statement to the effect that the prospective franchisee may keep the disclosure document; and
(b)
a form on which the prospective franchisee can acknowledge receipt of the disclosure document.

Endnotes

Endnote 1About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe how an amendment is to be made. If, despite the misdescription, the amendment can be given effect as intended, then the misdescribed amendment can be incorporated through an editorial change made under section 15V of the Legislation Act 2003.

If a misdescribed amendment cannot be given effect as intended, the amendment is not incorporated and “(md not incorp)” is added to the amendment history.

Endnote 2Abbreviation key

ad = added or inserted	orig = original
am = amended	p = page(s)
amdt = amendment	para = paragraph(s)/subparagraph(s)
C[x] = Compilation No. x	/sub‑subparagraph(s)
ch = Chapter(s)	pres = present
cl = clause(s)	prev = previous
cont. = continued	(prev…) = previously
def = definition(s)	pt = Part(s)
Dict = Dictionary	r = regulation(s)/Court rule(s)
disallowed = disallowed by Parliament	reloc = relocated
div = Division(s)	renum = renumbered
ed = editorial change	rep = repealed
exp = expires/expired or ceases/ceased to have	rs = repealed and substituted
effect	s = section(s)/subsection(s)
gaz = gazette	/rule(s)/subrule(s)/order(s)/suborder(s)
LA = Legislation Act 2003	sch = Schedule(s)
LIA = Legislative Instruments Act 2003	SLI = Select Legislative Instrument
(md) = misdescribed amendment can be given	SR = Statutory Rules
effect	sub ch = Sub‑Chapter(s)
(md not incorp) = misdescribed amendment	sub div = Subdivision(s)
cannot be given effect	sub pt = Subpart(s)
mod = modified/modification	underlining = whole or part not
No. = Number(s)	commenced or to be commenced
Ord = Ordinance

Endnote 3Legislation history

Name	Registration	Commencement	Application, saving and transitional provisions
Competition and Consumer (Industry Codes—Franchising) Regulations 2024	9 Dec 2024 (F2024L01605)	1 Apr 2025 (s 2(1) item 1)
Competition and Consumer (Industry Codes—Franchising) Amendment (Franchise Disclosure Register) Regulations 2025	20 Oct 2025 (F2025L01250)	21 Oct 2025 (s 2(1) item 1)	—

Endnote 4Amendment history

Provision affected	How affected
Chapter 1
Part 1
s 2.............................................	rep LA s 48D
s 4.............................................	am F2025L01250
s 5.............................................	rep LA s 48C
Chapter 2
Part 7
Division 1
s 89............................................	am F2025L01250
s 91............................................	am F2025L01250
Division 2
s 92............................................	am F2025L01250
s 93............................................	am F2025L01250
Division 5
s 96............................................	am F2025L01250
s 96A.........................................	ad F2025L01250
Chapter 3
Part 2
Part 2.........................................	ad F2025L01250
s 102..........................................	ad F2025L01250
s 103..........................................	ad F2025L01250
sch 2..........................................	rep LA s 48C