Franchise Agreement Disclosure Statement
On 1 January 2015 the Franchising Code was repealed and replaced with the Disclosure Document New Code. References to the Franchising Code of Conduct in the legislation are now references to the New Code.
The changes made in the New Code Disclosure Document include provisions that make changes to:
- the common law obligation to act in good faith;
- marketing funds be kept separate
- marketing funds only be used for purposes disclosed .
- franchisors required to contribute to marketing funds;
- That limits significant capital expenditure ;
- and limits end of term restraint of trade covenants ;
- limits nominating a jurisdiction for dispute resolution ;
- a new ‘information statement’ in addition to the disclosure document;
- expands the information to be given in a disclosure document
- expands the circumstances in which penalties may be imposed on franchisors for breaches of the code.
18 pages long.
Franchising Agreements Practice Guide (available soon)
We recommend you turn to our Practice Guide on Franchising for a full coverage of the law and practice. The Practice Guide is available from our other site, Practiceguides.com.au
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The franchise agreement is the contract between you and a franchisee. It sets out each party’s rights and responsibilities in relation to the franchised business, as well as each other. The franchise agreement you provide during the pre-entry disclosure period must be in the form in which it is to be executed.