Franchising Code Changes Should Have Minimal Practical Impact

Introduction

The Federal Government has moved quickly to implement its response to the recent parliamentary inquiries concerning franchising and unconscionable conduct, with amendments to the Franchising Code of Conduct (Code) to take effect from 1 July 2010. For most franchisors there will be minimal impact and the changes to the disclosure document will be able to be made as part of the normal annual update of the disclosure document.

There are no transitional arrangements, so any franchisee that signs a franchise agreement on or after July 1 2010 must have received a disclosure document that complies with the amended Code. As the normal four month grace period will not apply, franchisors actively granting new franchises will need to move quickly to update their documents. In limited circumstances where a disclosure document has already been provided, there will be a need to re-disclose.