Australia: Franchising Update: ACCC Releases Guidance Publications for Franchising Code

On 1 July 2010 the Trade Practices (Industry Codes – Franchising) Amendment Regulations 2010 commenced, giving effect to the Franchising Code reforms. A summary of the amendments to the franchising code which took effect from 1 July 2010 were outlined in our June 2010 update, which you can view here. 

The Australian Competition Consumer Commission recently released a number of publications to assist franchisors and franchisees to understand their obligations under the Franchising Code of Conduct. The ACCC published the following:

For Franchisors

• Franchising Code of Conduct compliance manual for franchisors and master franchisees

For Franchisees

• Franchisee start up checklist
• Franchisee manual
• Being smart about your new franchise: checklist before signing a lease agreement.

The publications are a useful starting point for franchisors and franchisees looking for general guidance on their responsibilities, obligations, and disclosure requirements under the Franchising Code. However, as highlighted throughout, the publications provide a general overview only and are not a substitute for legal advice.

The publications can be accessed here, and we highlight the features of each publication below.

For Franchisors

The Franchising Code of Conduct compliance manual for franchisors and master franchisees is designed for franchisors and master franchisees to provide guidance on the franchising code including:

• disclosure requirements relating to franchise agreements;
• conditions relating to franchise agreements;
• the dispute procedure;
• compliance and other obligations; and
• hints for developing a compliance strategy.

Gadens Lawyers can assist franchisors and master franchisees to review their disclosure documents including franchising agreements to ensure compliance with the Franchising Code.

For Franchisees

The Franchisee manual is a useful starting point for franchisees and prospective franchisees covering:

• relevant considerations and warnings before choosing a franchise;
• useful due diligence steps for research and verification;
• disclosure requirements; and
• the franchise agreement.

The publication Being smart about your new franchise: checklist before signing a lease agreement provides guidance to franchisees starting a small business. The checklist covers important considerations for franchisees including:

• ensuring that the contractual arrangement is suitable and is understood;
• end of term arrangements;
• occupancy costs; and
• franchise territory.

The Franchisee start up checklist provides a useful checklist for franchisees or prospective franchisees to make an informed decision before entering into a franchise. It includes items such as:

• a franchisee's rights to receive disclosure documents;
• suitability of the franchise;
• due diligence relevant to a franchisee before entering into a franchise.

Gadens Lawyers is able to assist franchisees and prospective franchisees to understand their rights under the Franchising Code of Conduct.

For more information, please contact:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.