If you are a franchisor or soon-to-be franchisor, it is important to be aware of the new requirements for disclosing information on the Franchise Disclosure Register (Register).

The Register went live on 14 November 2022. The basic mandatory information that must be disclosed by Franchisors on the Register includes:
Name, trading name and ABN
Business email address and contact phone number
Address(es) of the franchisor
Industry division and subdivision
Financial year on which the franchisor operates

Franchisors who have to update their disclosure document are required to provide even
more information, including:
History and experience of the Franchisor
Restrictions on suppliers that franchisees can use
Start up and ongoing payments, costs and fees for a franchisee
Terms and renewal details of a standard franchise agreement
Restraint of trade on franchisees

All of the requirements are set out in the Franchising Code and this government Determination. If you are Franchisor wondering that this sounds really familiar, you are right, it is. It basically is a shorter summary of the information and disclosures that Franchisors are already required to make under the Franchising Code. It will come as no surprise that some Franchisors have opted to upload their disclosure documents and franchise agreements rather then re-enter the same information. Franchisors must confirm or update the information at least once a financial year. Failure to disclose the required information or to update it annually can result in civil penalties of up to $165,000. Please keep in mind that disclosure on the Register does not replace a Franchisor’s obligations to provide key disclosure documents to franchisees and prospective franchisees under the Franchising Code.

What else?

Franchisor’s should be carefully checking and updating their franchise agreement and related documents. There are increased disclosure requirements and penalties for having unfair contract terms due to recent and upcoming changes to the

Franchising Code and Australian Consumer Law.

The implications and fines for non-compliance are huge. For example, some penalties have or will increase to the greater of $50 million or three times the value derived from the relevant breach, or 30% of the company’s turnover during the period it engaged in the conduct.

On a final note, keep an eye on out for further changes to franchising laws. The government
plans to review the Register and franchising regulatory framework later this year. There is
more to come.
The team at Milicevic Lawyers has extensive experience in franchising law and can help you
with all of your franchising needs. We can check and help you comply with all Register and
disclosure requirements, prepare disclosure documents, franchise agreements and other
related documents. We can also represent you in any disputes that may arise.
To learn more about how we can help you, please contact us .

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