Australia Ushers in New Era of Franchise Transparency With Public Register

Prospective franchisees in Australia will soon have additional access to franchise information before committing to a franchise agreement, as the government will now require franchisors to post key disclosure information online.

On April 1st, 2022, the Australian government amended the Franchising Code of Conduct by imposing obligations on most franchisors to publicly disclose business information on the Franchise Disclosure Register. While franchisors may experience some additional burden by these disclosure obligations, the mandatory requirements outlined in the legislation are minimal. Many franchisors were already providing this information to potential franchisees, but the disclosures will now be mandated and made publicly available.

Per the amended Franchising Code of Conduct, all franchisors must create a public profile and publish key disclosure information on the register by November 14, 2022. The information that must be disclosed on the registry includes: the franchise’s name, addresses, contact information, industry division and the financial year in which the franchisor operates. 

The franchisor will also be required to answer questions of interest to franchisees, such as “What is the standard term of franchise agreements?” and “Are franchisees entitled to compensation for goodwill in the business?” Additionally, franchisors have the option to include a Disclosure Statement, Key Facts Sheet, and a standard form Franchise Agreement used by the franchisor.

Each year, franchisors who are registered will be required to confirm that the information on file with the registry is accurate.

Failing to register by November 14th, 2022, could result in penalties of up to AUD $133,000.