Are you aware that all franchisors and franchisees in Australia are legally required to comply with an industry code, which is called the Franchisors Code of Conduct?
The initial Code, which was introduced in 1998 by the Australian Competition and Consumer Commission, was replaced by a new code in 2015 and it details the regulations that franchising industry participants must abide by.
The following are just some of the areas it covers
- Disclosure agreements
- Dispute resolutions
- What is a “good faith obligation”
- When does a cooling-off period apply
- The correct procedure for ending a franchise agreement
Why is there a Code?
The Franchising Code of Conduct exists to regulate the industry, with the aim of informing potential franchisees with the information they need before entering a franchise agreement. It also helps provide a cost-effective solution to disputes.
As a franchisee, the Code will guide you on;
- What you need to do as a franchisee
- What information the franchisor needs to share with you
- The information a franchise agreement must include
- Help with dispute resolution and mediation
- What is a minimum standard of conduct within the franchise industry
As a franchisor, the Code guide you on;
- What you must do as a franchisor
- The information you must disclose to the franchisee
- What has to be included in a franchise agreement
- Help with dispute resolution and mediation
- What is a minimum standard of conduct within the franchise industry
The Franchising Code of Conduct isn’t intended to replace independent legal, business or other advice before entering into a franchise agreement.
Essential Reading
Other documents relevant to the Code of Conduct: