ByLawyers News and Updates

Franchise disclosure – FED

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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:

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.

Franchising – All states

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Franchising laws across Australia have been amended.

Franchising Code of Conduct

The Franchising Code of Conduct is a mandatory industry code that regulates the conduct of franchising parties across Australia.

Significant amendments to the code introduced by the Competition and Consumer (Industry Codes—Franchising) Amendment (Fairness in Franchising) Regulations 2021 give further protection to franchisees. There are new rights in relation to disclosure, remedies and termination.

Dispute resolution amendments apply to disputes notified on or after 2 June 2021.

The amendments providing franchisees with the right to greater information and remedies apply from 1 July 2021.

Changes to the required disclosure document apply from 1 November 2021.

Some of the key changes include:

  • Franchisors are required to provide a mandatory fact sheet in addition to the disclosure document, and to including additional information in the disclosure document. The disclosure requirements also apply to the transfer of an existing franchise agreement.
  • Franchisors are prohibited, in certain circumstances, from requiring franchisees to undertake significant capital expenditure.
  • New arbitration and conciliation mechanisms are available.
  • Cooling off periods have been extended from 7 to 14 days. They also apply to a broader range of scenarios.
  • Franchisees have the right to request early termination of a franchise agreement.
  • The ability for franchisors to terminate agreements for special circumstances without notice has been restricted.

Updates to By Lawyers publications

The commentary and precedents within the By Lawyers Business and Franchise publications have been updated to reflect these amendments.

See Folder ‘E. IF REQUIRED – FRANCHISES‘ on the matter plans. This includes the Franchise Agreement precedent and Model disclosure document for franchisee or prospective franchisee precedent. Links are available on the mater plan to the new Information statement for prospective franchisees published by the ACCC, and to the new Key facts sheet smart form.

Family Law – The Harman Undertaking – Information obtained on discovery or subpoena

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Commentary has been added to the Children and Property Settlement publications regarding the Harman undertaking:

Information obtained on discovery, subpoena or included within an affidavit cannot be used for a collateral or ulterior purpose unrelated to the proceedings in which that production occurs. This is called an implied or ‘Harman’ undertaking after Harman v Secretary of State for the Home Department [1983] 1 AC 280. It is a substantive legal obligation owed to the party who produces the documents and to the court: Hearne v Street [2008] HCA 36 (6 August 2008) at [107]-[108].

NSW – Contracts for the Sale of Land

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The Conveyancing (Sale of Land) Regulations 2017 will come into force 1 September 2017 affecting contracts for the sale of land.

The main changes are to the disclosure obligations requiring the following to be annexed to the contract:

  • both the sewer mains and the connections diagrams  are now required; and
  • for a strata or community plan property ALL by laws must be attached including the model by-laws.

Changes to contract warnings include:

  • a new warning about loose fill asbestos; and
  • the swimming pools warning has been removed.

Commentary, precedents and the By Lawyers Contract for Sale of Land have all been updated.

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