You will need to comply with this code if you intend to enter into a franchise agreement.
A franchise agreement is a contract (written, verbal or implied) under which:
- one party (the franchisor) grants to another (the franchisee) the right to carry on a business offering goods or services under a system or marketing plan which is determined, controlled or suggested by the franchisor or its associate
- the business is associated with a trademark, advertising or commercial symbol specified by the franchisor or its associate
- the franchisee is required to pay an agreed fee to the franchisor or its associate before starting or continuing the business.
The code aims to regulate the conduct of franchising participants towards one another. In particular, it:
- requires franchisors to disclose certain information to prospective and existing franchisees before, and after, entering into a franchise agreement
- stipulates a number of conditions relating to the rights of a franchisor and a franchisee under a franchise agreement
- provides mechanisms for franchisees and franchisors to try to resolve disputes.