You are required to comply with the code if you are party to a franchise agreement.
A franchise agreement is an agreement in which a person (the franchisor) grants to another (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services under a particular system or marketing plan which is substantially determined, controlled or suggested by the franchisor and is associated with a trade mark, advertising or commercial symbol.
The code has numerous requirements, including:
- an obligation to act in good faith in dealings with one another (for example, honestly and with an intention to engage in fair dealing)
- to provide prospective franchisees with a generic information sheet outlining the risks and rewards of franchising
- to provide prospective franchisees with a disclosure document detailing key information about the franchise system and the running of the franchise
- to provide greater transparency in the use of and accounting for money used for marketing and advertising and to set up a separate fund for marketing and advertising fees
- additional disclosure about the ability of the franchisor and a franchisee to sell online
- a prohibition on franchisors from imposing significant capital expenditure except in limited circumstances
- to provide reasonable written notice of proposed termination of the franchise agreement.
The code also implements financial penalties and infringement notices for serious breaches of the code.
Please consult the Contact Officer for more information and to ascertain the level of compliance that may be required.