ByLawyers News and Updates

Franchising Code – FED

by

A new Franchising Code of Conduct operates from 1 April 2025.

The new code is set out in Chapter 2 of the Competition and Consumer (Industry Codes-Franchising) Regulation 2024. Sections have been significantly reordered and renumbered from the previous code in Schedule 1 to the Competition and Consumer (Industry Codes-Franchising) Regulation 2014. The new code of conduct generally applies to all franchise agreements entered into, renewed, extended or transferred on or after 1 April 2025. However, some changes apply from later dates under transitional provisions relating to franchise agreements and disclosure requirements.

Amendments

Key changes to franchise agreements and disclosure requirements under the new code include:

Franchise agreements

  • Removal of the requirement for franchisors to create, maintain, or provide a Key Facts Sheet for prospective franchisees. This applies from 1 April 2025.
  • Restrictions on restraint of trade clauses where a franchise agreement contains an option for the franchisee to renew or extend the agreement and the franchisor does not do so. This applies to agreements entered into, transferred, renewed, or extended on or after 1 April 2025.
  • Franchisees must be compensated for early termination in certain circumstances. Agreements are required to specify how compensation is determined. This applies to agreements entered into, transferred, renewed, or extended on or after 1 November 2025.
  • Franchisees must have a reasonable opportunity to make a return on any investment required by the franchisor as part of entering into the agreement. This applies to agreements entered into, transferred, renewed, or extended on or after 1 November 2025.
  • Franchisors may, on certain expanded grounds, terminate a franchise agreement with 7 days’ notice. This applies to agreements entered into, transferred, renewed, or extended on or after 1 April 2025.
  • Franchisees can opt out of both disclosure and the 14-day cooling-off period if a new agreement with the same franchisor is substantially similar to their current agreement. This applies from 1 April 2025.
  • Marketing and cooperative funds are now combined as a specific purpose fund to which franchisees contribute and which must be used for a specified purpose related to the business’s operation. This applies from 1 November 2025. Franchisors are to operate existing marketing and cooperative funds in compliance with the old code until this time.
  • The Australian Small Business and Family Enterprise Ombudsman now has the ability to name and shame franchisors who refuse to engage in or who withdraw from alternative dispute resolution processes. This applies from 1 April 2025.

Disclosure requirements

From 1 November 2025, all disclosure documents must include certain information set out in Schedule 1 of the Regulation.

Additional information to be provided in the new disclosure document includes:

  • telephone number and email address of former franchisees;
  • whether a franchisee could face competition from businesses not associated with the franchisor; and
  • details about whether the franchisee is required to undertake significant capital expenditure during the term of the franchise agreement.

Any materially significant facts that arise between the preparation of a disclosure document and when it is provided to a potential franchisee must also be disclosed.

A franchisor need not include the new requirements for specific purpose funds and significant capital expenditure in its disclosure document until 1 November 2025, but may choose to do so.

From 1 April 2025, the franchisor’s Franchise Disclosure Register profile must also include:

  • any convictions for a serious offence;
  • any relevant judgment in civil proceedings;
  • any relevant bankruptcy or insolvency; and
  • whether its franchise agreement provides for arbitration of disputes.

Publication updates

The By Lawyers precedents Franchise Agreement and Model Disclosure Document for Franchisee or Prospective Franchisee precedents, available on the Sale of Business and Purchase of Business matter plans for each state, and the commentary on Franchises, have all been updated accordingly.

Franchise disclosure – FED

by

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.

New Business & Franchise publication for Western Australia

by

CaptureBy Lawyers is pleased to announce a new publication: Business & Franchise for Western Australia.

The guide and precedents include everything that is needed to successfully execute the sale or purchase of a business in Western Australia.

The By Lawyers Uniform Contract for the Sale of Business is also included in this guide. The uniform contract has been designed to take both parties through the transaction and covers everything from warranties by seller shareholders, guarantees by buyer shareholders, the completion deliverables to effectively release PPSR security interests, to the transfer of all of the business assets including copyright works, trade marks and supplier contracts.

The By Lawyers uniform contract also follows the ASIC requirements for the transfer of business names and allows the user to customise the competition restraints to ensure that they are enforceable and suited to their client’s circumstances.

The Commentary compares different business structures, sets out the tax consequences of sale price apportionment, explains the tax treatment of stock and business assets, long service leave and other employee entitlements and discusses many other issues that can arise in business conveyancing such as the role of the premises landlord and franchising.

A subscription to this publication is $89 plus GST per month for a minimum of three months.

To learn more, please visit our website.

Business and Franchise VIC

by

Business and Franchise 

OCTOBER 
  • Costs Agreements
    • Included reference to time limit for bringing costs assessment, total estimate of legal costs section with provision for variables, and authority to receive money into trust.
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
  • Purchase of Business – Clause added on payment of fees when purchaser not proceeding.

April 

  • File Cover Sheets for all publications have been completely re-formatted for a better look.
  • New precedent added – Enclosure – Applying for Trade Marks

February 

  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

Business and Franchise QLD

by

Business and Franchise

OCTOBER 
  • Costs Agreements
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
    • Clause on recovery of fees added when purchaser not proceeding.

April 

  • File Cover Sheets for all publications have been completely re-formatted for a better look.

  • New precedent added – Enclosure – Applying for Trade Marks

February 

  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

Business and Franchise NSW

by

Business and Franchise

OCTOBER 
  • Costs Agreements
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
    • Included reference to time limit for bringing costs assessment included total estimate of legal costs section with provision for variables and included authority to receive money into trust.
    • Clause added on payment of fees when purchaser not proceeding
JULY
  • The purchase of business commentary was updated to reflect the recent stamp duty amendments abolishing duty on most business assets.
JUNE
  • Amendments to dutiable property effective 1 July 2016.
APRIL
  • New precedent added – Enclosure – Applying for Trade Marks
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
FEBRUARY
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

Connect with us