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Franchise agreement
Practical Law ANZ Glossary w-009-6187 (Approx. 2 pages)
Glossary
Franchise agreement
A franchise agreement is the contract that governs the franchise relationships in most franchise operations.
Defined in clause 5 of the Competition and Consumer (Industry Code - Franchising) Regulation 2014 (Cth) (Code), which regulates franchising in Australia, broadly, as a written, oral or implied agreement with all of the following characteristics:
- A person (the franchisor) gives another person (the franchisee) the right to carry on a business offering goods or services in Australia (the franchise).
- The franchise system or marketing plan is substantially suggested by the franchisor.
- The franchise is materially associated with the franchisor's branding or branding specified by the franchisor.
- The franchisee is required to pay the franchisor certain types of fees (such as a capital investment fee, training fees, royalties and non-wholesale payments for goods and services).
The Code implies certain terms into franchise agreements, including in relation to cooling-off periods, transfers, termination and dispute resolution.
Franchise agreements include:
- Initial franchise agreements.
- Franchise agreement transfers, renewals and extensions (of term or scope).
- Motor vehicle dealership agreements.
For further information, see Practice notes, Franchising agreements and Regulation of franchising: Definition of a franchise agreement.