Disclosure Register offline as new Code starts
The Australian Government’s Franchise Disclosure website was offline for several days as the new Franchising Code of Conduct came into effect on April 1.
All businesses that offer franchises in Australia are required by both the previous and new Codes to be listed on the Franchise Disclosure Register at www.franchisedisclosure.gov.au, however the website itself was offline from at least March 31 up to about April 3.
In a separate email by the Australian Competition and Consumer Commission (ACCC) to its Franchising Information Network sent on March 28, the ACCC noted that new fields were being added to the Franchise Disclosure Register, and that previously uploaded Key Facts Sheets and Disclosure Documents would no longer be visible to the public from April 1, nor can new versions of these document be uploaded, however did not indicate that the Disclosure Register website would be offline.
No explanation for the site’s downtime can be found on the site itself, however it does feature a brief note on the top of the home page unrelated to the new Franchising Code which states that “The government is following Guidance on Caretaker Conventions while we wait for the 2025 federal election results”. Visit Franchise Disclosure Register
New Code guidance materials now available
Guidance materials to help franchisors comply with their obligations under the new Franchising Code of Conduct which came into effect on April 1 are now available.
On March 11, just three weeks before the commencement of the new Code, the federal government’s Treasury department released a Table of Key Changes summary despite the Code being legislated three months earlier in December 2024. The Table of Key Changes is available here.
The ACCC has also recently updated information on its website to provide guidance to franchisors on what new elements of the Code apply from April 1, and what applies from November 1 after the end of the transition period. The ACCC’s Franchising Code guidance can be found online here.
New franchise Information Statement now available
A new Information Statement for prospective franchisees is now available on the ACCC website.
The Information Statement is a standard government document that must be provided to potential franchisees as soon as possible, but not later than seven days after a potential franchisee has expressed interest in joining a brand. It must also be given to the potential franchisee before giving them any other documents, such as the franchise agreement or disclosure document.
To access the new Information Statement, click here.
Confusion follows announcement of more regulation
A lack of detail has created confusion in the franchise sector about proposed additional changes to Unfair Contract Terms and Unfair Trading Practices legislation to be extended to include franchising, as the new Franchising Code of Conduct takes effect.
Last month, Federal Small Business Minister Julie Collins flagged the further regulation of the sector before new the Code had even commenced on April 1 in a media release to announce an additional $7.1 million in funding over two years to strengthen the Australian Competition and Consumer Commission’s (ACCC) enforcement of the Franchising Code.
According to the Minister, Unfair Contract Terms and Unfair Trading Practice reforms will help address the power imbalance that franchisees may face, and improve the fairness of relationships between franchisees and franchisors.
A consultation process on the proposed reforms is expected to commence later this year. Read more
Food chain wins Lord of the Rings trademark battle
Australian vegan fast food chain Lord of the Flies has won a trademark battle against the rights owners of JRR Tolkien’s The Lord of the Rings and The Hobbit, according to a decision of the Australian Registrar of Trade Marks.
The trademark battle commenced when Middle-earth Enterprises LLC, a United States company which owns the international literary and film rights to Tolkien’s iconic books opposed a trademark application filed in September 2022 by Lord of the Fries to register a word trademark for “Lord of the” to promote its macaroni and cheese.
Middle-earth Enterprises unsuccessfully claimed in its opposition to the application that the trademark was deceptively similar to The Lord of the Rings, despite Lord of the Fries using its trademark since 2004 and acknowledging it was initially inspired by an altogether different book called Lord of the Flies, a 1954 novel about schoolboys stranded on an uninhabited island. Read more here or click here to read the full trademark decision.
Holden franchisees lose class action against franchisor
A class action by former Holden franchisees against their franchisor for failing to act in good faith following the brand’s decision to exit the Australian market has been unsuccessful according to court documents.
In a judgement handed down in the Supreme Court of Victoria on March 20, General Motors Holden Australia was found not to have acted in bad faith in failing to continue to provide vehicles to its dealer network for the balance of their franchise terms after the brand had exited the Australian market. It was also found not to have breached its duty of good faith in its allocation of remaining vehicles to the network after the decision to exit was made and the production facility which supplied the vehicles had been sold.
In a rare development, the lead plaintiff in the case had settled their own claim against Holden in 2023, but continued to the lead the case on behalf of other dealers. Amendments to the Franchising Code of Conduct in 2021 and new changes about to be introduced on April 1 this year include changes regarding capital expenditure and requirements for franchisees to be given a reasonable opportunity for a return on their investment, as well as new end of term arrangements regarding stock, equipment and other items are understood to have been inspired by Holden’s exit from the Australian market and other multi-national auto franchisors operating in Australia. Read more 1; Read more 2
Franchise CEO sacked for political activism
The parent company of international ice-cream chain Ben & Jerry’s, has sacked the brand’s chief executive for political activism, according to a media report.
Ben & Jerry’s is famous for its activism which has involved the brand in social issues such as gun control in the United States, the war in Ukraine, and its boycott of sales in Israeli-occupied Palestinian territories.
CEO David Stever was sacked by Ben and Jerry’s owner, UK-based multinational company Unilever, which Ben and Jerry’s has claimed in documents filed in a United States court was because Stever refused to “oversee the dismantling” of the ice cream chain’s progressive values.
Stever joined Ben and Jerry’s as a tour guide in 1998 and rose to the role of CEO. A condition of Unilever’s acquisition of Ben & Jerry’s in 2000 was the establishment of an independent board to protect the brand’s mission and stance on social issues. In response to Stever’s sacking, Ben & Jerry’s has lodged a submission to the US district court accusing Unilever of wanting to stop Stever from making political statements and defending the brand’s social mission.
The latest conflict between the two entities follows more recent accusations of Unilever demanding Ben & Jerry’s stop publicly criticising Donald Trump and, in November 2024, the launching of legal action by the ice-cream brand against its parent accusing the company of trying to block it from making public statements supporting Palestinian refugees in the Gaza conflict.
In response to Ben & Jerry’s most recent complaint against it, Unilever has stated that while it continues to support the brand’s social advocacy work, it is concerned that it has become too controversial and puts the safety of employees from both companies is at risk. Read more
Chinese brand becomes world’s largest franchise
Chinese milk tea and ice-cream chain Mixue has become the world’s largest franchise with more than 45,000 franchised stores across China and in 11 other countries, according to a media report.
By store count, Mixue has moved from fourth place to first in the last 12 months ahead of McDonald’s (43,000), Starbucks (40,199), and Subway (35982). In terms of sales, Mixue remains in fourth position at $6.5 billion, behind Starbucks ($55.5 billion), Inspire Brands ($14.9 billion), and Tim Hortons ($7.5 billion).
In China, Mixue operates around 37,000 Mixue branded stores and 2,900 Lucky Cup branded outlets, with another 4,792 franchises in operation across 11 countries including Indonesia and Vietnam. Despite 99% of Mixue stores being franchised, franchise fees made up just 2.4% of total revenue for the first three-quarters of 2024, rather the bulk of Mixue’s revenue was generated from the sale of merchandise and equipment to franchisees who must source these items from Mixue.
According to a regulatory filing, Mixue Group has started bookbuilding, seeking to raise HKD $3.45 billion in a Hong Kong initial public offering. Read more 1; Read more 2
Coffee chain customer awarded $79m for genital scalding
Coffee giant Starbucks has been ordered to pay USD $50 million to a customer whose genitals were scalded by hot tea at a drive-through in the United States in February 2020, according to a media report.
The incident occurred when the customer, a delivery driver tasked with picking up three venti-sized Medicine Ball hot teas from a California drive-through, sustained second and third degree burns to his hands, stomach, thighs, and genitalia when one of the drinks spilled in his lap. The customer has undergone multiple skin grafts and other procedures and now lives with a disfigurement, dysfunction, and psychological harm that court documents allege has been life changing.
The customer’s negligence lawsuit was based on an allegation that the Starbucks’ employee did not wedge the scalding-hot tea firmly enough in the takeout tray. Starbucks’ initially offered USD $30 million but insisted on confidentiality. The plaintiff was open to accepting that figure without confidentiality, insisting Starbucks should publicly apologise and change its policies to ensure such spills could not happen again. Read more
Free brunch for Melbourne franchisors on May 1
A free brunch event for franchise executives in Melbourne on Thursday May 1 will explore the top franchise challenges and opportunities for franchisors in the year ahead, including the new Franchising Code of Conduct, franchise recruitment, and customer acquisition and retention.
The free franchisors-only morning event, which includes brunch and mimosas, will provide Victorian franchisors a learning and networking opportunity as well as critical insights to assist with franchise recruitment, marketing and network planning.
Speakers include Franchise Advisory Centre director and Franchise News publisher Jason Gehrke, and digital marketing expert and Constant Contact Asia-Pacific vice president Renee Chaplin.
The free Franchise Outlook Brunch and Learn will be held from 9am to 11am at Melbourne’s Harbour Kitchen at Docklands on Thursday, May 1. For more details and register, click here.
Jason Gehrke is the Director of the Franchise Advisory Centre and has been involved in franchising for more than 30 years at franchisee, franchisor and advisor level. He advises both existing and potential franchisors and franchisees, and conducts regular education courses for franchisors in Australia and overseas. He has been awarded for his franchise achievements, and publishes Franchise News, Australia’s only fortnightly electronic news bulletin on franchising issues.
www.franchiseadvice.com.au