Our review of the changes to the Franchising Code of Conduct continues today looking at when franchisor will not be required to update a disclosure document. The standard rule is that a disclosure document must be updated within 4 months of the end of financial year. However, after 1 January, 2015 a franchisor is relieved of the obligation to update its disclosure document if: 1. the franchisor entered into or 1 or no franchise agreements during the year; and 2. the franchi...

The new Franchising Code of Conduct provides that a franchisor must give a franchisee a copy of the disclosure document within 14 days of a written request by the franchisee. That is nothing new and a similar clause is contained in the current Franchising Code of Conduct. However, the new Code provides for a penalty of up to 300 penalty units if the franchisor does not comply with the request on time. That is a potential penalty of up to $51,000! Franchisors be warned, you ...

An interesting change to the Franchising Code of Conduct from 1 January, 2015 relates to jurisdictions for settling disputes. A franchise agreement must not contain a clause which requires an action in relation to a dispute to be brought outside of the State or Territory in which the franchised business is operated. The provision then goes on to state that a franchise agreement cannot require mediation to be brought outside of the State or Territory in which the franchised bus...