The code does not apply in the following circumstances:

• where another prescribed mandatory industry code (for example, the Oilcode) applies; or
• where all of the following conditions are met:
• the franchise agreement is for goods or services that are substantially the same as those supplied by the franchisee before entering into the franchise agreement
• the franchisee has supplied those goods or services for at least two years immediately before entering into the franchise agreement
• sales under the franchise are likely to provide no more than 20 per cent of the franchisee’s gross turnover for goods or services of that kind for the first year of the franchise.

However, if sales under the franchise provide more than 20 per cent of the franchisee’s gross turnover for three consecutive years, and the franchisee has told the franchisor this, then this exception will not apply.