The Government has, as at November 2020, released a paper outlining the likely changes that will be implemented to the Franchising Code of Conduct from July 2021. The status quo is definitely about to change, especially in regard to a Franchisor’s disclosure obligations. It will be important to update your documents and get the items below in check.
Disclosure is more and more becoming the way by which franchisees assess all aspects of the franchise network and business opportunity and as such, following a number of legal proceedings over 2019-2020, is becoming the document that a franchisee may rely on and consider a key document in the course of their due diligence and later any disputes relating to the initial representations made by a Franchisor. As such it is important to get your disclosure right, so to avoid any unnecessary visits by ACCC enforcement officials and/or disputes by franchisees due to inadequate disclosure under the new rules.
Some of these changes, as per the November paper, include the following—though further updates may soon follow as the July 2021 commencement date approaches.