New franchise disclosure requirements apply from 1 April 2022.
A free online franchise disclosure register has been established. The new Part 5A to the Franchising Code of Conduct requires franchisors to upload key franchise systems data. This is intended to allow prospective franchisees to make more informed decisions.
Franchisors have until 14 November 2022 to supply the information. The particulars the franchisor is required to disclose include:
- their name and Australian Business Number;
- the business name under which the franchisor operates;
- addresses within Australia of the franchisor’s registered office and principal place of business;
- the disclosure document prescribed under the Franchising Code of Conduct;
- the Australian and New Zealand Standard Industrial Classification division and subdivision codes for the industry in which the franchisor operates.
The obligation for franchise disclosure is ongoing. Franchisors must annually publish updated disclosure documents within four months of the end of their financial year.
Franchise disclosure data must be uploaded for at least 14 days before a franchisor can enter into a franchise agreement. Fines of up to 600 penalty units apply for non-compliance.
The By Lawyers commentary on Franchises has been updated. This useful resource can found in the Reference materials folder on the matter plans for both the Sale and Purchase of Business. This includes updated links to the new regulation clauses.