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ARTICLE · 31 AUGUST 2010

Changes to the Franchising Code of Conduct

Thomson Geer
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This article contains a brief discussion of the key changes to the Franchising Code of Conduct after 1 July 2010.

AustraliaCorporate/Commercial Law
Bruce McGregor
Bruce McGregor

Key summary of the new regulations

The key changes include:

  • a franchise agreement entered into on or after 1 July 1998 (formerly 1 October 1998) must not contain, or require a franchisee to sign, a general release of a franchisor from liability towards the franchisee.
  • A franchisor's annual financial marketing (or other cooperative) fund statement does not need to be audited if 75% of the franchisor's franchisees in Australia who contribute to the fund vote that the franchisor does not have to comply with this requirement and this agreement was reached within 3 months after the end of the financial year. This agreement will remain in force for 3 years.
  • a franchisee's request to the franchisor for a transfer or novation of the franchise agreement must be made in writing. A definition of "novation" has been introduced in the Code.

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