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Franchising disclosure document
Practical Law ANZ Glossary w-009-6199 (Approx. 3 pages)
Glossary
Franchising disclosure document
A document that franchisors must maintain and provide to franchisees in accordance with the
Competition and Consumer (Industry Codes - Franchising) Regulation 2014 (Cth) (Franchising Code) (clauses 8 and 9). The disclosure document helps potential franchisees make an informed decision about the franchise.
Franchisors must:
- Provide this document to prospective and existing franchisees (including transferees of franchise agreements) at least 14 days before entering into, renewing or extending a franchise agreement or the franchisee making a non-refundable payment to the franchisor or its associate. The disclosure document must be accompanied by:
- a final copy of the franchise agreement;
- a copy of the franchising key facts sheet;
- a copy of the Franchising Code; and
- leasing information, if the franchisee is leasing or occupying premises from the franchisor or its associate.
- Maintain it yearly, within four months of the end of each financial year, unless an exception applies (clause 8, Franchising Code).
- Provide an up-to-date copy of the disclosure document to a franchisee within 14 days (or two months if clause 8(8) of the Franchising Code applies) of a written request (clause 16, Franchising Code).
The required content and form of the disclosure document is prescribed in detail in clause 8(3) and Annexure 1 of the Franchising Code. It includes information about:
- Supply restrictions and rebates.
- Future capital expenditure the franchisee may have to pay for.
- Costs of setting up and running the franchise.
- Whether the franchisor is solvent.
- Contact details for current and former franchisees.
- Legal action against the franchisor involving franchising.