A new franchising code of conduct, Competition and Consumer (Industry Codes – Franchising) Regulations 2024, started this week.
Under the code, new protections and obligations apply to:
- Franchise agreements entered, extended, renewed or transferred from 1 April 2025;
- Conduct related to franchise agreements entered, extended, renewed or transferred from 1 April 2025. This includes franchise disclosure documents provided to franchisees and potential franchisees.
As per the code, franchise agreements must not include a restraint of trade clause that applies if the franchise agreement expires, and franchisees seek to extend or renew the agreement.
Civil penalties will apply to franchisors who enter into franchise agreements with these terms.
Non-compliance with requirements under the code are now subject to additional civil penalties. This includes franchisors who include prohibited terms in franchise agreements and those who do not meet their obligations to give and receive required information.
Relevant links which may assist in adjusting to the new code are listed below:
- ACCC information page – Franchising laws including the code
- Franchise Disclosure Register
- Copy of the Code – Competition and Consumer (Industry Codes—Franchising) Regulations 2024
The QLS Franchising Law Committee is considering the impacts of the new code and will provide further updates to members soon.
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