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Franchisors must make sure the information they provide:

  • is accurate
  • can be substantiated
  • does not omit important information.

The Franchising Code of Conduct has specific rules about information and documents.

  • Potential franchisees must be given the information statement from the ACCC website, as soon as they show an interest.
  • Certain information must be in a particular format. For example, the disclosure document must be in the format set out in Schedule 1 of the franchising code.
  • Most franchisors must update the disclosure document each year.
  • Franchisors must tell their franchisees about materially relevant facts. This includes if majority ownership of the franchisor or franchise system changes. If their financial details change, franchisors must tell potential franchisees.
  • Franchisors can only pass on some legal costs to franchisees.
  • Franchisors must give potential franchisees certain documents and information. This must be done 14 days before entering into a franchise agreement with the potential franchisee.
  • Franchisors usually need to tell potential franchisees to get independent advice. This is usually from a lawyer, business adviser and accountant.