New franchising code rules
A new Franchising Code of Conduct was introduced on 1 April 2025. Some rules in the new code apply from 1 November 2025.
Under the new code, there are extra obligations for franchisors relating to disclosure documents. This page includes guidance about these obligations.
The obligations include:
- disclosing as much information as practicable about significant capital expenditure
- giving additional information and documents when franchisees pay into a specific purpose fund.
The new disclosure document obligations come into effect from 1 November 2025.
View guidance on other changes to the franchising code and when they apply.
On this page
About the disclosure document
Franchisors must create a franchise disclosure document to share key information about the franchise.
The disclosure document:
- helps prospective and current franchisees make informed decisions about entering, renewing or extending a franchise agreement
- gives franchisees updated information for running their franchised business.
Disclosure documents must have specific information and follow a format.
Disclosure documents must not mislead. Franchisors must make sure that all information is true and able to be substantiated. This means updating the document when certain information changes.
When to give the disclosure document
To franchisees
A franchisee can ask for an updated copy of the disclosure document once every 12 months by writing to the franchisor. Franchisees can ask for a physical or digital copy of the document.
A franchisor must give the disclosure document to the franchisee within 2 months of getting the request.
To prospective franchisees
A franchisor must give prospective franchisees a copy of the disclosure document at least 14 days before a franchise agreement is signed.
If you're thinking of buying a franchise, make sure you review and understand the disclosure document and get independent advice.
Opting out of receiving the disclosure document
In some situations, a prospective franchisee can give written notice to opt out of receiving the disclosure document and a copy of the franchising code.
They can only opt out when they:
- have recently had the same or a substantially similar agreement with the same franchisor for the same type of business, or
- currently have the same or a substantially similar agreement with the same franchisor for the same type of business.
If you’re a prospective franchisee, you should be cautious of opting out. There may be important changes to the disclosure document since it was last provided to you that you should see.
When the document must be updated
There are specific times and circumstances that a franchisor must update the disclosure document.
Update each year
Other than a few situations, franchisors must update the disclosure document every year. Franchisors must also update their solvency statement when they update the disclosure document.
The due date for the annual update depends on when the franchise agreement was entered, extended, renewed or transferred.
For agreements made on 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.
For agreements made 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 franchisors 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.
Update after a significant change in the franchise system
Updates for accuracy
Disclosure documents must not contain information that will, or is likely to, mislead or deceive.
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.
Updates after a change to materially relevant facts
Under the code, franchisors must inform franchisees and prospective franchisees about certain information called materially relevant facts. They can't wait until the next time they update the disclosure document.
Required format and information
The disclosure document must be in the same format and contain the information listed in Schedule 1 of the franchising code. This includes:
- statement of the franchisor’s solvency
- costs of setting up and running the franchise
- supply restrictions and rebates
- contact details for current and past franchisees
- legal action against the franchisor to do with franchising
- future capital expenditure that franchisees may have to pay for, including details about significant capital expenditure.
New code rules for disclosure documents
From 1 November 2025, the disclosure document must:
- provide certain details, if a franchisee must pay money to a specific purpose fund
- include additional information about when a franchisee will be required to undertake significant capital expenditure during the term of the franchise agreement.
The solvency statement
Franchisors must include information on solvency in the disclosure document.
Franchisors must include:
- a signed solvency statement that reflects the franchisor’s position at the end of the last financial year, signed by at least one director, and that gives the directors’ opinion as to whether franchisor would be able to pay its debts when they become due
- financial reports for the past 2 financial years or an independent audit report about the franchisor’s solvency prepared by a registered company auditor.
Different reporting requirements apply if the franchisor was insolvent in any of the last 2 financial years.
Franchisors must update their solvency statement when they update the disclosure document.
Earnings information
Franchisors can choose to disclose earnings information to a franchisee or prospective franchisee.
Earnings information includes historical earnings data for the franchise system or a franchised business, and projected earnings for a franchised business.
Earnings information must be accompanied by a statement saying that, to the best of the franchisor’s knowledge, it is accurate except for information it specifies is not accurate.
When disclosing earnings information, the franchisor must disclose in:
- the franchise disclosure document, or
- a separate document attached to the franchise disclosure document.
When this occurs, the franchisor must give the earnings information 14 days before a franchise agreement is signed.
When the franchisor chooses not to disclose earnings information, they must state this at item 20 of the disclosure document.
Supply arrangements and rebates
Franchisors must include any rules about goods or services that franchisees must buy or sell when running the business in the disclosure document. This includes information on:
- all supply arrangements
- any restrictions on franchisees buying goods and services
- any ownership or interest in a supplier a franchisee must use
- any financial benefit from a supply arrangement.
Financial benefit includes rebates and other benefits the franchisor, master franchisor or an associate of the franchisor or master franchisor gets from suppliers.
The disclosure document must state:
- what the financial benefit is
- the name of the business giving the financial benefit
- the total amount of the financial benefit the franchisor gets from the supplier. This must be stated as a percentage of total group purchases from the supplier (excluding stores operated by the franchisor, master franchisor or franchisor’s associate)
- if the financial benefit is shared with franchisees. Franchisors do not have to share rebates or other financial benefits with franchisees.
Contact details
A disclosure document must include information about the number of current and former franchisees. It must also include their contact details.
If you are interested in a franchise, you should speak to current and former franchisees to help inform your decision about whether to buy a franchise.
Current franchisee contacts
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 franchisee contacts
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 was for an alleged contravention of the franchising code. The other for an alleged contravention of the Australian Consumer Law.
The infringement notice for an alleged contravention of the franchising code 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.
Guidance for franchisors and franchisees
Guidance for franchisors on how to prepare a franchise disclosure document.
Tips for prospective franchisees on how to spot warning signs in a disclosure document.
Record keeping obligations for franchisors
Franchisors must keep records for at least 6 years after giving a disclosure document.
Franchisors must keep:
- all disclosure documents they give to prospective or current franchisees
- any document used to support a statement or claim in the disclosure documents.