Disclosure documents must comply with the Franchising Code and the Competition and Consumer Act, including the provisions of the Act prohibiting misleading or deceptive conduct . If a franchisor does not include relevant information in a disclosure document, or includes misleading information, it may be in breach of the code and/or the Act.

An intention to mislead or deceive someone is not required to establish a breach. An innocent or accidental misleading or deceptive representation will still breach the Act. Silence may even constitute misleading or deceptive conduct in certain circumstances.

It is important to note that it is the overall impression created about the franchise business that must not be misleading. It is not enough to disclose information that is technically correct. It is just as important to look at the overall impression created in the minds of prospective franchisees by the disclosure documentation as a whole.

If the disclosed information is found to breach the provisions of the Act, the remedies available for a breach of the Act may be sought.

Prudent practice to avoid breaching the Act includes:

• openly and honestly disclosing the conditions of the franchise to the franchisee
• being able to substantiate claims
• ensuring that your documentation is clear and correct.