Franchising 101: Why Disclosure matters

Franchising within Australia is regulated by the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth) (Regulation). Just like other forms of contracts, a franchise agreement (FA) can be a written, oral or even implied agreement.¹ Despite this, it is always good practice to have FAs in written form.

Entering a franchise agreement

1. Before a prospective franchisee can sign an FA, the franchisor must provide the prospective franchisee a copy of the following documents:²
   1. the agreement in its final form;
   2. the most up-to-date disclosure document;
   3. the key facts sheet relating to the franchise;
   4. the Regulation; and
   5. any relevant leases, sub-leases, licences, etc. if the franchisee is required to let, sub-let or licence a premises to the franchisee.³