Thinking of being a Franchisee? – What you need to know

On 1 January 2015, the new Franchising Code of Conduct came into effect. Here are some of the points you should take note of as a franchisee.

What are your rights?

The franchisor (the owner of the business) must disclose any essential information to help you make an informed decision when buying the franchise. That obligation does not end at the negotiation stage. During the course of the franchise relationship, the franchisor must also disclose to you if a materially relevant fact occurs. This includes a change in franchise system, majority ownership or control of the franchisor, and court proceedings against the franchisor or its directors.

Both parties must exhibit good faith when dealing with each other. Indicators of good faith include being honest with each other, considering each other’s interests, and working out your differences.

What are your obligations?

Most of your obligations to your franchisor will be documented in the terms of your Franchise Agreement. It is important to understand your obligations and how it affects your relationship with your franchisor. Be sure to read them carefully!

If I signed the Franchise Agreement but I don’t want buy the franchise anymore, what do I do?

It is important to read the terms of your Franchise Agreement carefully before signing anything.
However, do not worry if you had a change of mind after signing the agreement. There is a cooling-off period of 7 days. You are entitled to terminate a new franchise agreement within 7 days of entering into the agreement or make a payment under the agreement, whichever comes first.

I think that my Franchise Agreement is unfair. Can I terminate it?

Generally, Franchise Agreements can be terminated in several circumstances – the Franchise Agreement being unfair is one of them.
Other circumstances where a Franchise Agreement can be terminated include if a party breaches or goes back on the agreement, if you entered into the agreement as a result of misrepresentation, or if the agreement is unlawful.

For the Franchisor’s Compliance Manual 

For the Franchisee Manual

Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

You may also like
Recent Articles

Get the latest news

By clicking on 'Sign up to our newsletter' you are agreeing to the Lawpath Terms & Conditions

Share:

Register for our free live webinar today!

Navigating the End-of-Year Shutdown: Essential Tips for Your Business

12:00pm AEDT
Tuesday 10th December 2024

By clicking on 'Register for webinar' you are agreeing to the Lawpath Terms & Conditions

You may also like

Payment summaries indicate all the payments you have made to your employees over the recent financial year. This article explains how to use them.
From workplace laws to tax updates, discover the essential 2025 changes affecting Australian businesses. Stay compliant and avoid costly mistakes.
Worried about employee performance and retention? Consider implementing a performance management plan. Check out our detailed guide.

Thank you!

Your registration is confirmed. Keep an eye on your inbox for an email with details on how to watch the webinar.