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Proposed Amendments to online disclosure

Posted on 10 September 2014

Amongst the very extensive changes to the Franchising Code of Conduct anticipated to commence on 1 January, 2014 is the requirement for a franchisor to disclose virtual encroachment into a franchisee's territory.

In addition to disclosing any online sales the franchisor or its associates may make, the franchisor must also disclose third party online sales of the franchisor's product.

If a franchisor provides product to a supermarket who in turn offers that product for sale online then the franchisor will be required to disclose this.

Note the Code does not limit the disclosure requirements to the products of the franchise system.  If the franchisor sells products in addition to those sold through the franchise system then presumably the sale of these online will need to be disclosed also.

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