The Franchising Code of Conduct is a mandatory industry code across Australia that regulates the conduct of franchising participants towards each other.
There has been a mandatory franchising code in operation since 1 October 1998. On 1 January 2015, a revised Franchising Code of Conduct commenced.
The Franchising Code includes:
- disclosure requirements
- a good faith obligation
- a dispute resolution mechanism
- a cooling-off period
- procedures for ending a franchise agreement.
The ACCC regulates the Code and investigates alleged breaches. Decisions about which matters to pursue are made in line with the ACCC’s Compliance and Enforcement Policy. Certain breaches of the Code could lead to the ACCC issuing an infringement notice or asking a court to impose a financial penalty.
Individuals also have the right to take their own legal action over an alleged breach of the Code.
For further information about the Code, please see:
Your rights and obligations under the Code are in addition to those under the Australian Consumer Law and the Competition and Consumer Act.
If you are uncertain about your rights and obligations under the Code, you should consider seeking legal advice from a solicitor with franchising expertise.
The Code imposes one set of obligations to all franchise agreements entered into, renewed, extended or transferred on or after 1 October 1998. However, a small number of Code provisions will not apply to agreements entered into prior to 1 January 2015. Visit the CommLaw website for more information.
Importantly, a franchise agreement entered into prior to 1 January 2015 will be covered by the entire Code if the agreement is renewed, transferred or varied in any way on or after 1 January 2015.
On 1 June 2020, amendments to the Code were introduced for new vehicle dealership agreements. The new regulations do not apply to all motor vehicle dealerships, only those agreements for dealerships that predominantly deal in new passenger vehicles or new light goods vehicles (or both). The key changes relate to:
- end of term obligations
- capital expenditure
- dispute resolution.
In addition to the Code, franchisors and franchisees may have obligations under various other pieces of legislation, such as:
- the Fair Work Act
- the Australian Securities and Investments Act
- Australia’s tax laws and
- state and territory licensing schemes.
You should take special consideration of your obligations by contacting the relevant agencies responsible for ensuring compliance with these laws. For instance, if you have questions about your workplace responsibilities under the Fair Work Act (e.g. calculating wages and entitlements, and keeping proper records), you should contact the Fair Work Ombudsman.
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