Franchising Code of Conduct and Franchise Agreement Services in Australia
If you are considering investing in a franchise business or franchising your own business model, product or trademark, make sure you have gone through Franchising Code of Conduct and Franchise Agreement to understand all of the potential implications and risks.
Franchising in Australia is governed by the Franchising Code of Conduct, a mandatory industry code that has the force of law under the Competition and Consumer Act 2010 (Cth). The definition of ‘franchise agreement’ in the Franchising Code of Conduct is wide. An agreement can be ‘deemed’ to be a Franchise agreement, and therefore subject to the Code. The franchising code of conduct gives franchisees certain rights.
Disclosure
Under the Franchising Code Of Conduct, franchisors must give a franchisee:
- a) A copy of the Code,
- b) A disclosure document, and
- c) A franchise agreement
at least 14 days before the franchisee enters into a franchise agreement. These documents must be provided before the Franchisor pays a non-refundable deposit.
Sale of Franchise
The Code imposes certain restrictions and obligations upon a franchisor and a franchisee in connection with the sale of a franchised business.
Permits and Licenses
Some business activities are governed by licensing requirements flowing from specific federal or state legislation. Make sure you get advice on what licences are required, if any, to operate your business as the penalties for non-compliance can be severe.
To discuss the franchising code of conduct and franchise agreement matters further, call Eric Kalde on (02) 9906 8188.
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