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We outline the main changes the new Franchising Code of Conduct introduces on 1 April 2025.

If you’re involved in franchising, you need to be aware of these changes under the new code and when they apply.

What the changes apply to

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.

When the changes become mandatory

Some of the new franchising code rules became mandatory on 1 April 2025.

There is a transition period for franchisors to comply with some of the new obligations, which will apply from 1 November 2025.

When the new franchising code begins on 1 April 2025

From 1 April 2025:

Franchise agreements must not include a restraint of trade clause that applies if the franchise agreement expires, and franchisees seek to extend or renew the agreement.

Civil penalties apply to franchisors who enter into franchise agreements with these terms.

Non-compliance with requirements under the code are now subject to additional civil penalties. This includes franchisors who:

  • include prohibited terms in franchise agreements
  • do not meet their obligations to give and receive required information.

When the transition period ends on 1 November 2025

Further protections and obligations apply from 1 November 2025, in addition to the changes from 1 April 2025.

From 1 November 2025:

Franchisors must comply with new disclosure document obligations, including:

  • the disclosure of significant capital expenditure
  • provide additional information and documents when franchisees pay into a specific purpose fund.

Franchise agreements must also:

  • allow franchisees a reasonable opportunity to earn a return on their investment
  • provide for compensation for early termination in certain circumstances.

Actions franchisors may need to take

We’ve answered questions to help franchisors understand when the new franchising code applies and the actions they need to take. 

This guidance does not constitute legal or other professional advice. If you’re unsure about your obligations, we strongly recommend you seek advice from professionals with experience in franchising.

Franchise agreements before 1 April 2025

If an existing franchise agreement is transferred, renewed or extended on or after 1 April 2025, it must comply with the new franchising code.

Franchise agreements entered into, transferred, renewed or extended before 1 April 2025 do not need to be updated to comply with the changes to the franchising code.

Franchisors do not have to update their existing disclosure document on 1 April 2025 when:

  • the disclosure document is only provided to existing franchisees, and
  • the franchisees are in a franchise agreement entered into, transferred, renewed or extended before 1 April 2025.

However, if you give potential franchisees the disclosure document after 1 April 2025, the document must comply with the new franchising code.

If you’re unsure about your disclosure document obligations, you should seek legal advice.

The effect of the new code is that franchisors must maintain and update 2 disclosure documents to:

  • comply with the old code for franchise agreements before 1 April 2025, and
  • comply with the new code for franchise agreements after 1 April 2025.

However, we will accept franchisors maintaining and updating one disclosure document that complies with the new franchising code. This includes not providing or updating the key facts sheet annually as required by the old franchising code.

Franchise agreements after 1 April 2025

If a franchise agreement is entered into, transferred, renewed or extended between 1 April and 31 October 2025 it must comply with some of the new franchising code rules. 

There is a transition period from 1 April to 31 October for franchise agreements to:

  • allow franchisees a reasonable opportunity to earn a return on their investment
  • provide for compensation for early termination in certain circumstances.

From 1 November 2025 franchise agreements must comply with all the requirements under the new franchising code.

Franchisors do not need to create and provide an updated disclosure document if:

  • the disclosure document was provided before 1 April 2025, and
  • the franchise agreement will be entered into, transferred, renewed or extended between 1 April 2025 and 31 October 2025.

In this situation, having provided a disclosure document which complies with the old franchising code will be compliant with the new code.

However, if you are providing the disclosure document to potential franchisees on or after 1 April 2025 it must comply with the new franchising code.

If you’re unsure about your disclosure document obligations, you should seek legal advice.

Under the new franchising code, 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.

Franchisors must update their disclosure document at other times.