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As a franchisor, you are required by law to comply with the Franchising Code of Conduct (Franchising Code), a mandatory industry code under the Competition and Consumer Act 2010 (formerly the Trade Practices Act 1974).
The Franchising Code regulates the conduct of franchising participants and aims to ensure that prospective franchisees are sufficiently informed about a franchise before entering into it. The Franchising Code requires, amongst other things, that franchisors develop and maintain a compliant disclosure document.
The Franchising Code sets out:
- your rights
- your obligations
- the information you must disclose to franchisees
- the elements a franchise agreement must contain
- a mediation procedure for disputes.
The Australian Competition and Consumer Commission (ACCC) administers and enforces the Franchising Code as well as educating people of their rights and obligations. It also provides small business information for people operating a franchise, or extending or renewing a franchise agreement.
Changes to the Code
The Franchising Code was amended in 2010. These amendments apply to any franchise agreement created, renewed, transferred or extended on or after 1 July 2010.
Visit the ACCC website or phone the ACCC small business helpline on 1300 302 021 for more information on the Franchising code of conduct .
What to do…
- Refer to the ACCC website for the following resources:
- The Franchising Code of Conduct
- Overview of the Franchising Code of Conduct fact sheet
- Franchising Code of Conduct compliance manual for franchisors and master franchisees
- Franchising page.
- Consult a business adviser, accountant or solicitor for advice.