Commonwealth logo and the ACCC logo
spacer
Welcome to the ACCC > For businesses > Industry codes of conduct > Franchising Code > Frequently asked questions > 16. Can a franchise agreement contain a clause that releases a franchisor from liability for any misrepresentations to the franchisee?

16. Can a franchise agreement contain a clause that releases a franchisor from liability for any misrepresentations to the franchisee?

No. A franchise agreement must not contain or require a franchisee to sign:

  • a general release of the franchisor‘s liability towards the franchisee, or
  • a waiver of any verbal or written representation made by the franchisor.

For example, if a franchisor makes a claim about the potential earnings of a franchise, it must be able to substantiate that claim. It cannot avoid liability simply by including a clause in the franchise agreement that the franchisee has not relied on any of the franchisor’s claims. 

Notify me...
  • Email me if this page is updated

Contact us | Site map | Definition of terms | New on site | Help | Privacy | Disclaimer & copyright | Accessibility | Website feedback | Other languages

© Commonwealth of Australia 2013