A key aspect of the Amendment (Closing Loopholes) Act 2023 is the criminalisation of ‘wage theft’. Wage theft typically refers to employers intentionally underpaying their employees or deliberately failing to provide them with the wages and entitlements they are owed. Previously, underpayments of employees were subject to civil penalties under the Fair Work Act 2009 (Cth) (“Fair Work Act”), but starting from 1 January 2025, intentional underpayment of wages will now be considered a criminal offence.

The Competition and Consumer (Industry Code - Franchising) Regulations 2024, were made on 5 December 2024 and come into effect on 1 April 2025. You can read the regulations here.

When you buy a franchise, you essentially buy the right to operate a business that is the same as the other businesses in the franchise network.

What is Franchising?

In order for all of the franchised businesses to essentially be the same, the product or service that is sold by each franchise must be consistent.

To achieve consistency, a franchisor may restrict where you purchase the supplies required to operate your business.

This can sometimes mean that the cost of your supplies (or the cost of goods sold) is higher than it otherwise might be if you were operating an independent business.

Starting Your Own Business vs Buying A Franchise

Last week while I was busy ensuring that our franchisor clients had updated their profile on the Franchise Disclosure Register, the Federal Government released its consultation paper on a licensing regime for the franchising sector.

When someone refers to an Intellectual Property Agreement, they are referring to an agreement or clause that deals with the creation, use and protection of intellectual property.

There isn't one type of Intellectual Property Agreement. The term "Intellectual Property Agreement" can be a reference to a number of different types of agreements.

What Is Intellectual Property?

As foreshadowed in its response to the 2023 Review of the Franchising Code of Conduct (the Code), the Government has proposed amendments to the current termination provisions of the Code.

The Exposure Draft of the Franchising Code of Conduct has been released, with the Government inviting public feedback until 29 October 2024.

In our last article I considered the proposed changes to the Franchising Code of Conduct (the Code) arising from the 2023 Review of the Scope of the Regulation of the Code.

In this article I will provide an overview of the proposed changes to the requirements "Before a Franchisee Enters into a Franchise Agreement", and their implications for franchisors and franchisees.

The Exposure Draft for the 2025 update of the Franchising Code of Conduct (which is expected to come into force on 1 April 2025) has been released by the Australian Federal Government (the Government).

Franchising has long been considered a highly effective strategy for business growth, particularly in Australia. With over 1,100 franchisors and 70,000 franchisees operating across the country, this business model has become a cornerstone of the Australian economy, contributing more than $135 billion annually and employing around 520,000 people.

For many entrepreneurs, franchising offers a seemingly straightforward path to business expansion, leveraging an established brand and proven operational models to penetrate new markets quickly.

As part of the Australian Federal Government's Competition Review, Treasury is considering how businesses can protect confidential information or trade secrets without the use of non-disclosure or confidentiality clauses, such as through the use of patents.

In this article we examine the legal definition of trade secrets and how trade secrets are currently protected.

The Franchising Code of Conduct (the Franchising Code) provides that certain documents must be given to a franchisee before they enter into a franchise agreement.

Franchise agreement termination is a complex area. In this article we look at the options available to franchisors and franchisees who want to exit a franchise agreement early.

Under the terms of a franchise agreement, a franchisee is given the right to operate the franchise business for a period of time. When the time period expires, the franchise agreement "expires". [What is a Franchise Agreement?]

A franchisor may terminate a franchise agreement early (that is, before the franchise agreement expires), if the franchisor follows the procedures set out in the franchise agreement and the Franchising Code of Conduct (the Franchising Code). [What is the Franchising Code of Conduct?]

If a franchise agreement contains provisions allowing a franchisee to terminate the franchise agreement, a franchisee may terminate a franchise agreement early if the franchisee follows the provisions set out in the franchise agreement.

There are also limited circumstances where a franchisor or franchisee can terminate a franchise agreement at common law. We have not dealt with these circumstances in this article.

Termination Under the Franchising Code of Conduct
Termination Clauses in Franchise Agreements
Legal Procedures for Terminating A Franchise Agreement

On 7 May 2024, the Minister for Small Business, the Hon Julie Collins MP, released the Australian Government's response to the Independent Review of the Franchising Code of Conduct. In this article we consider the recommendations of the Independent Review together with the Government's response.

What is A Franchise Agreement?

One of the disadvantages of buying a franchise is the lack of independence or autonomy in operating the franchise, and the restrictions on decision-making [The advantages and disadvantages of franchising]. How much autonomy a franchisee has in operating their franchise business, will depend on the franchisor, the business operation that the franchisee is wanting to do differently and the reasons why the franchisee is wanting to depart from the franchise offering. While there is a case to be made for some franchisee autonomy, this needs to be balanced with brand consistency . 

What is Franchise Autonomy?
Can Franchisees Adapt Operational Procedures?
Are Franchisees Able to Introduce New Products or Services?
What Level of Autonomy do Franchisees Have in Local Marketing?
Can Franchisees Negotiate with Suppliers Independently?
Challenges of Franchisee Autonomy
Strategies for Balancing Autonomy and Consistency
The Future of Franchisee Autonomy 

Explore the importance of social media policy for franchisees and how it can benefit their businesses.

Restraint of trade clauses are common in franchise agreements and are designed to protect the franchisor's legitimate business interests.

It is important for franchisees to carefully review and understand the restraint of trade clauses in their franchise agreements to ensure compliance and avoid potential legal issues.

In this article we will consider how the new "Right to Disconnect" law in Australia impacts employees and employers and what factors both employees and employers need to take into account when communicating outside of work hours.

On 8 February 2024, the Minister for Small Business, the Hon Julie Collins MP, released the Independent Review of the Franchising Code of Conduct by Dr Michael Schaper. In this article we consider the key findings and recommendations of the Independent Review.

In this guide we consider the franchise disclosure document, the importance of franchise disclosure document compliance, and best practices to ensure compliance as a franchisor in Australia.

1- The Importance of Franchise Disclosure Documents
2 - Key Components of Franchise Disclosure Documents
3 - Common Disclosure Document Issues for Australian Franchisors
4 - Best Practices for Franchise Disclosure Document Management

The franchising sector in Australia has approximately 1,144 franchise systems and approximately 70,735 franchisees.¹

One of the questions I'm asked, when talking to people about franchising their business, is, "what are the legal requirements?".

What I tell them, is that, unfortunately, franchising is legally complex and highly regulated.

I also talk about the many legal requirements that need to be complied with in order to successfully franchise your business. I discuss these requirements in more detail in the article below.

Guide to Franchising Your Business

Our firm specialises in franchise law. It's pretty much all we do. As a consequence, I have spent a lot of my working life dealing with conflicts that arise between franchisors and franchisees.

What happens when a franchisee is not living up to expectations?

In this article I explore the challenges of poorly performing franchisees and how they can impact the overall success of a franchise.

In this blog post, we will delve into some of the key amendments made to the Fair Work Act 2009 (Cth) ("Fair Work Act") under the Secure Jobs, Better Pay Act 2022 (Cth) ("SJBP"). Our aim is to provide an understanding of the implications of these changes, exploring their direct impact on employee rights and the obligations faced by employers.

On 23 August 2023, the Government released the Consultation Paper for the 2023 review of the Franchising Code of Conduct. 

The growth strategy for your business will ultimately be determined by the nature of your business and your business objectives. In this article, we have outlined 5 strategies for growing a business in Australia.

1 - Understanding the Australian Business Landscape
2 - Building a Strong Brand Presence
3 - Marketing Effectively for Growth
4 - Product Development
5 - Licensing or Franchising

The regulation of Unfair Contract Terms is about to change. In November 2023 the 12 month transition period for the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (the Act) will come to an end.

Selling a franchise business in Australia can be a complex process, especially when it comes to understanding the legal and financial aspects involved.

In this article we'll explore how to navigate the legal and financial aspects of selling your franchise business in Australia. From understanding how the Franchising Code of Conduct and your franchise agreement apply to the sale as well as considering the value of the franchise business, we will provide you with information that will help to make the journey smoother.

Franchising in Australia is heavily regulated.

Starting Your Own Business versus Buying a Franchise. Which is the better option?

Introduction
Advantages
Investment and Financial Considerations
Marketing and Branding
Operations and Management
Risk and Reward
Takeaways

As a franchisee, it is important to be aware of the financial health of your franchisor.

While there are certain pieces of information that must be included in the franchisor disclosure document, access to detailed information about a franchisor’s finances may be limited. This can leave you vulnerable if your franchisor suddenly becomes insolvent.

In this article we will discuss why it’s important as a franchisee to stay informed about your franchisor’s financial standing and what rights you have should your franchisor become insolvent.

Overview of Franchisor Insolvency

Rights and obligations arising from Franchisor Insolvency

Administration and Liquidation arising from Franchisor Insolvency

Marketing Funds

Takeaways

Are you thinking of buying a franchise? It’s an exciting proposition that can bring both rewards and risks. Before you dive in and make a commitment, it’s crucial to carefully consider all the elements involved.

Following on from our recent article about misleading or deceptive conduct, we take a look at the case of Lanhai Pty Ltd v 7 Eleven Stores Pty Ltd [2022] VSC 132, which involves allegations of misleading and deceptive conduct about the term of the franchise agreement.

Misleading or deceptive conduct is the most commonly reported complaint by small business to the ACCC. While these complaints will not all relate to franchising issues, misleading or deceptive conduct complaints in franchising are common.

It is a well established principle of Australian law that businesses that illegally exploit their employees can face serious penalties under the Fair Work Act 2009 (Cth) (“Fair Work Act”). It should therefore be unsurprising that franchisees who have engaged in behaviour that illegally disenfranchises their workers can be subject to penalties from the Fair Work Commission.

The ACCC announced on 6 October 2022 that it had issued Jim's Group Pty Ltd with two infringement notices and that Jim's Group Pty Ltd had paid $24,420.00 in penalties.

The infringement notices related to an alleged failure to comply with the Franchising Code of Conduct and an alleged failure to comply with the Australian Consumer Law. 

The Franchising Code of Conduct (the Franchising Code) was amended on 1 June 2021, with most amendments applying from 1 July 2021. Given it is the time of year when franchisors must update their disclosure documents, in this article we revisit the current Franchising Code requirements for Significant Capital Expenditure.

We have set out below a number of the approaching Key Franchise Dates, related primarily to a franchisor's end of financial year reporting and disclosure obligations. 

The last two and a half years have been tough for small businesses including franchises.

On 1 April 2022 the Franchising Code of Conduct (the Franchising Code) was amended to insert a new clause 53 which sets out the requirements for the Franchise Disclosure Register.

[What is the Franchising Code?]

The Franchising Code of Conduct (the Franchising Code) sets out the obligations (including annual obligations) relating to advertising and marketing funds operated by a franchisor.

The Federal Government has released a discussion paper seeking stakeholder views to help the Government assess the practical benefits of a standalone automotive franchising code and options for mandatory binding arbitration.

The Federal Government has substantially changed the Information Statement to be provided to prospective franchisees as part of the pre-disclosure process. It has also clarified that the Information Statement must be given before the other documents given to a prospective franchisee (14 days before a prospective franchisee enters into a franchise agreement).

The Franchising Code of Conduct (the Franchising Code) was amended on 1 June 2021, with most amendments applying from 1 July 2021, including the Exit and Termination amendments.

The long awaited dispute resolution provisions under the Franchising Code of Conduct (the Franchising Code) came into force on 2 June 2021.

So you've started your business, registered a business name and secured your website domain.

Have you protected your brand or business name? 

Registration of a business name, or the purchase of a domain name, does not stop other people from using that name. To protect your business name and any logo or representation that you are using, you need to register a trade mark.

A right of renewal in a franchise agreement is a right which gives you the option to "renew" the franchise agreement at the end of the term. [What is a franchise agreement?].

Not all franchise agreements contain a right of renewal.

Even if your franchise agreement contains a right of renewal you may not want to renew the franchise agreement. 

A restraint of trade clause is a clause which is included in an agreement typically to stop someone from competing or using confidential information.

In Part 1 of our series "Can I Franchise my Business?" I covered crucial factors such as branding, consistent business systems and maintaining uniformity.

The rights to end the franchise relationship, to sell your franchised business, or to pass your franchised business on to a beneficiary are determined by the terms of your franchise agreement and the Franchising Code of Conduct (the Code).

As a franchise lawyer, I see many people who are interested in using franchising as a growth strategy for their business. When discussing whether franchising is the right growth strategy for a business, one of the first topics I talk about is branding.

In this article, in addition to branding, I'll cover a number of initial factors that should be considered when assessing the possibility of franchising your business.

But first, I examine what franchising involves and how it can facilitate the growth of your business.

Updated on 23 June 2021

The Federal Government released its response to the Fairness in Franchising Report on 20 August 2020.

A franchise agreement outlines the conditions under which you can operate the franchise business, including how long you can operate the business for.

When buying a franchise or signing a franchise agreement it is important to consider the "term" of the franchise agreement.

If you are considering franchising your business or you are already a franchisor, we have set out some important considerations to building a successful franchise business.

I have been involved in franchising businesses since the early 1980's. At that time, franchising as a business growth strategy in Australia was in its infancy. Now, we are one of the biggest adopters of franchising in the world.

The Australian franchise industry employs around 520,000 people and contributes more than $135 billion each year to the economy. There are more than 1,100 franchisors and 70,000 franchisees operating in Australia.

However, while franchising is a very successful business model, it is important to carefully consider both the advantages of franchising and the disadvantages of franchising before making the decision to either franchise your business or buy a franchise.

Guide to Franchising Your Business

Guide to Buying a Franchise

Dispute resolution, also known as alternative dispute resolution or ADR, encompasses various methods and techniques that aim to resolve conflicts and disagreements. It provides an alternative to traditional legal processes, such as litigation, and offers parties involved in a dispute the opportunity to find mutually satisfactory solutions.

Why is brand consistency important in franchising?

Brand consistency is crucial in franchising for several reasons. Firstly, it helps to maintain a strong and unified brand identity across all franchise locations. This consistency ensures that customers have a consistent experience regardless of which franchise they visit, leading to increased trust and loyalty towards the brand.

Moreover, brand consistency in franchising plays a key role in attracting both customers and prospective franchisees. A well-established and consistent brand image not only appeals to customers, but also entices potential franchisees who are looking to invest in a reputable and recognisable brand.

• What is Franchising?
• Impact of Brand Consistency on Customer Perception
• The Role of Brand Consistency in Maintaining a Competitive Edge
• The Risks of Inconsistent Branding in Franchising
• Strategies for Maintaining Brand Consistency