Bubble Tea Franchisor Pays Hefty Penalty for Alleged Breaches of Franchising Code

Sharetea Australia Pty Ltd, the franchisor of a popular bubble tea chain in Australia, has been fined $39,600 after the Australian Competition and Consumer Commission ('the ACCC') issued two notices for alleged breaches of the Franchising Code of Conduct ('the Franchising Code'), the major governing legislation over franchise agreements in Australia.

The alleged breaches concern terms in franchise agreements between Sharetea and its franchisees which required franchisees to pay costs incurred by Sharetea when settling disputes with franchisees. Such terms are strictly prohibited under section 41 of the Franchising Code, with a maximum civil penalty of 600 penalty units, or $218,400 as of 1 July 2026.

Alongside payment of the fine, Sharetea has agreed to amend its franchise agreements to remove the prohibited terms, as well as address other issues regarding Franchising Code compliance and potentially unfair contract terms.

Some of the issues highlighted by the ACCC include:

• Terms in Sharetea's franchise agreements potentially allowing them to keep money for expenses they did not incur in circumstances where a franchisee exercised their right to end a franchise agreement within the 14-day cooling-off period after they entered into an agreement;
• Terms prohibiting franchisees from being involved in any similar business activities within wide-ranging geographic areas for long time periods after their franchise agreements had ended; and
• Terms permitting Sharetea to charge high interest rates on overdue franchisee fee payments.

ACCC Deputy Chair Mick Keogh said that the ACCC sought changes to terms in Sharetea's agreements because it was concerned those terms were unfair. "This action by the ACCC shows that it is important for franchisors to understand, and comply with, their obligations under the Australian Consumer Law and the Franchising Code," he said.

This penalty is the latest action taken in recent months by the ACCC against franchisors for alleged breaches of their obligations under these laws.

In March 2026, franchise operator Luxottica Franchising Australia, which operates eyewear retailers OPSM and Laubman & Pank in Australia, was fined $19,800 for allegedly breaching the Franchising Code by failing to maintain an up-to-date profile on the Franchise Disclosure Register.

In June 2025, franchisors Cash Converters Pty Ltd and MTA - Mobile Travel Agents Pty Ltd were each fined $16,500 for allegedly failing to annually update or confirm their information on the Franchise Disclosure Register.

These fines serve as important reminders for franchisors to ensure that any franchise agreements they enter into do not contain provisions that contravene the Australian Consumer Law or the Franchising Code, as doing so can result in hefty penalties.

Sharetea has operated the Sharetea bubble tea franchise, originating in Taiwan, since 2012. As of November 2025, it had 124 franchised businesses.