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ARTICLE · 08 APRIL 2014

Government issues revised franchising laws for comment

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Proposed new franchise laws bolster the rights of franchisees and may increase the compliance burden on franchisors.

AustraliaCorporate/Commercial Law
Frances Wheelahan
Frances Wheelahan
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On 2 April 2014, the Commonwealth Government released for public comment a draft of the revised Franchising Code of Conduct ('the Code') and a bill to amend the relevant franchising provisions of the Competition and Consumer Act 2010 ('the Act').

The changes are significant. The proposed new franchise laws bolster the rights of franchisees and, while some "red tape" requirements have been removed, the additional disclosure requirements will likely increase the compliance burden on franchisors. In addition, if the new laws are enacted, franchisors and franchisees will also be potentially liable for civil penalties of up to $51,000 if they breach certain sections of the Code.

It is currently proposed that the new franchising laws will take effect from 1 January 2015. The deadline for submission of comments on the draft legislation is 30 April 2014.

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