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The Federal Govermment has announced draft amendments to the Competition and Consumer (Industry Codes—Franchising) Regulation 2014, more commonly referred to as the Franchising Code of Conduct. The amendments will introduce a Franchise Disclosure Register which is designed to improve transparency and to assist potential franchisees in making informed choices prior to entering a franchise agreement. This will further support the franchisee during the due diligence period.

The proposed register will provide free and easy access to members of the public about vital information pertaining to the franchised business. Information that will be included in the register includes:

  • a current disclosure document;
  • simplified information that is already readily available; and
  • other information volunteered by franchisors, for example a brief description of the franchised business.

If the proposed reforms proceed, there will be a transitional period beginning in early 2022. Franchisors will then be given until 31 October 2022 to publish information on the register. There will be ongoing requirements for Franchisors to publish updated disclosure documentation within 4 months of the end of their financial years.

If you are looking at buying into a franchise or need advice on a franchise agreement, we encourage you to contact our experienced commercial law team.