Changes to the franchising code
A new Franchising Code of Conduct is in effect from 1 April 2025.
Under the code, new protections and obligations apply to:
- franchise agreements entered, extended, renewed or transferred from 1 April 2025
- conduct related to franchise agreements entered, extended, renewed or transferred from 1 April 2025. This includes franchise disclosure documents provided to franchisees and potential franchisees.
We’ve prepared guidance to help franchisors understand changes under the new code and when they apply.
On this page
Purpose of the disclosure document
The disclosure document is intended to help potential franchisees make a reasonably informed decision about the franchise.
The disclosure document must give useful and reliable information about the franchise. It gives franchisees current information about the franchise that is needed to run the business.
For more information, see our guidance publication on the franchise disclosure document.
When a disclosure document must be updated
There are specific times and circumstances that franchisors must update the disclosure document.
Annual update
Franchisors must make an annual update to their disclosure document.
When the annual update is due depends on your franchise agreement and when it was entered, extended, renewed or transferred.
Agreements after 1 April 2025
The annual update must be made within 4 months of the first day of the franchisor's financial year.
If your financial year starts on 1 July, the annual update to the disclosure document is due by 31 October that year.
Agreements before 1 April 2025
The annual update must be made within 4 months after the end of the franchisor’s financial year.
If your financial year ends on 30 June, the annual update to the disclosure document is due by 31 October that year.
When you don’t have to do the annual update
A franchisor does not have to do the annual update when they:
- did not enter more than 1 franchise agreement in their last financial year, and
- don’t intend to enter into a franchise agreement in the current financial year, and
- don’t receive a written request for the disclosure document from a franchisee.
Other times a disclosure document must be updated
Franchisors must update their disclosure document at other times.
- Disclosure documents must not contain information that will, or is likely to, mislead or deceive. This means that if a significant change in the franchise system occurs, the franchisor must consider if their disclosure document needs to be updated to reflect this change. This is required even if the annual update is not yet required.
- Under the code, certain information called materially relevant facts is considered so important that the franchisor cannot delay telling franchisees and potential franchisees about it. They can't wait until the next time they update the disclosure document.
When a franchisor must give the disclosure document
An existing franchisee can ask the franchisor for a copy of the disclosure document once every 12 months.
A franchisor must usually give a potential franchisee a copy of their disclosure document at least 14 days before the franchisee enters into the franchise agreement.
If you're thinking of buying a franchise, make sure you have enough time to understand the disclosure document. Also get independent advice.
We explain more about disclosure documents and what they tell you in our online franchising course.
Required format and information
A disclosure document must be in the same format and contain the information listed in schedule 1 of the franchising code, including:
- supply restrictions and rebates
- future capital expenditure that franchisees may have to pay for, including details about significant capital expenditure
- costs of setting up and running the franchise
- whether the franchisor is solvent
- contact details for current and former franchisees
- legal action against the franchisor to do with franchising.
If a disclosure document contains information about capital expenditure, the franchisor must speak to potential and current franchisees about the capital expenditure. This discussion must happen before entering, renewing or extending a franchise agreement.
For more information on format, see our guidance on the franchise disclosure document.
Current and former franchisee contact details
A disclosure document must include information about the number of existing and former franchisees. It must also include their contact details.
Potential franchisees should speak to current and former franchisees to help inform their decision about whether to buy a franchise.
Current franchisees
The disclosure document must include the number of:
- existing franchised businesses
- existing franchisees
- businesses owned or operated by the franchisor or their associate that are substantially the same as the franchised business.
These must be sorted by state, territory, or region.
The disclosure document must include contact details for each existing franchisee:
- business address
- business phone numbers
- year from which the franchisee started operating the business.
Former franchisees
The disclosure document must include information about franchisees who have ended their franchise. This includes the number of times certain events have happened in the last 3 financial years:
- the franchise business was transferred
- the franchised business ceased to operate
- the franchise agreement terminated by the franchisor
- the franchise agreement was terminated by the franchisee
- the franchise agreement was not extended
- the franchised business was bought back by the franchisor
- the franchise agreement was terminated and the franchised business was acquired by the franchisor.
The disclosure document must also include the name, location and contact details of each franchisee (if the information is available) whose franchise ended in the last 3 financial years.
A former franchisee can ask for their details not to be disclosed to potential franchisees by writing to the franchisor. A franchisor must not try to influence a franchisee to opt out of including their details in the disclosure document.
Case study
In 2022, Jim’s Group Pty Ltd paid $24,420 in penalties in its capacity as franchisor of the Jim’s Dog Wash franchise. The penalty was paid after the ACCC issued two infringement notices. One for an alleged contravention of the franchising code. One for an alleged contravention of the Australian Consumer Law.
One infringement notice related to an allegation that the disclosure document:
-
significantly understated the number of former franchisees within the Dog Wash Division
-
failed to provide the contact details of those former franchisees.