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Changes to the Franchising Code of Conduct

Posted on 17 November 2014

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 business is located.

If a franchise agreement contains a clause which contravenes the above then that clause will be of no effect.

Franchisors should have their franchise agreements reviewed by a franchising lawyer to help to ensure the legislative provisions are not contravened by the franchisor.

Franchisees should have their proposed franchise agreements reviewed to ensure their agreements comply with the new Code.

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