Important changes to Australian franchise laws

Written on the 24 February 2008

The Australian Competition and Consumer Commission (ACCC) has announced changes to the Franchising Code of Conduct that will affect all franchisors and franchisees.

These important changes officially become law on March 1 2008, so make sure you understand and implement them before then.

Here is a summary of the major changes:

A franchisor must give franchisees a copy of the franchising code, a disclosure document in the required form and a copy of the franchise agreement in the form that it is to be executed at least 14 days before the franchisee enters into any agreements with or pays any money to the franchisor
The franchisor must give the franchisee any agreements that franchisee is required to enter into under the franchise agreement (such as a lease or a confidentiality agreement) at least 14 days before the franchise agreement is signed
The franchisor must disclose any relevant facts to the franchisee in writing within 14 days of becoming aware of it
Within four months after the end of a financial year, the franchisor must create a disclosure document for the franchisee in accordance with the code
A franchisor's disclosure document must include references to the relevant conditions of the attached agreement that deal with the obligations of both franchisor and franchisee and other specific conditions of the agreement
The Franchising Code now applies to overseas franchisors that grant only one franchise or master franchise in Australia
A franchisor must not induce a franchisee or potential franchisee not to associate with other franchisees or potentials franchisees
A franchise agreement must not require a franchisee to sign any kind of waiver made by the franchisor
The Franchising Codes now refers to the Corporations Act 2001 rather than the Corporations Law