Documents to be provided to a Franchisee before they enter into a Franchise Agreement

This post was updated on 23 May 2025

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.

Franchising Code of Conduct Compliance

There are significant penalties that are payable by a franchisor if these documents are not provided.

The documents that must be given to a franchisee before a franchisee enters into a franchise agreement include:

1. An Information Statement
2. A Copy of the Franchise Agreement
3. A Copy of the Disclosure Document  
4. A Copy of the Franchising Code of Conduct
5. Leasing Information
6. Other Documents

1 - Information Statement

An information statement must be given to a prospective franchisee as soon as practicable after the prospective franchisee formally applies or expresses an interest in acquiring a franchise business (and not later than 7 days after a franchisee formally applies or expresses an interest in acquiring a franchise business) (section 22 of the Franchising Code).

The information statement sets out some of the risks involved in franchising and a number of questions that a franchisee can ask a franchisor before the franchisee enters into a franchise agreement. 

The information statement is provided on the ACCC's website and the current version can be accessed here.  

An Information Statement does not need to be provided to a franchisee before the franchisee enters into a franchise agreement if the franchise agreement is being renewed or extended (section 22(2) of the Franchising Code).

After the Information Statement is given to a prospective franchisee (if required), the franchisor must give to the prospective franchisee the documents set out in section 23(2)of the Franchising Code.

2- A Copy of the Franchise Agreement

Section 23(2)(a) of the Franchising Code provides that a franchisor must give to a franchisee a copy of the franchise agreement in the form in which it is to be executed (signed) [What is a franchise agreement?].

Section 23(7) makes it clear that the following changes can be made to the franchise agreement after it has been provided to the franchisee, without the disclosure process starting again:

• the franchise agreement can be changed to reflect a request made by the franchisee;
• the franchisee agreement can be changed to fill in required particulars;
• the franchise agreement can be changed to reflect changes of address or other circumstances;
• the franchise agreement can be changed for clarification of a minor nature;
• the franchise agreement can be changed to correct errors or references.

3 - A Copy of the Disclosure Document

Section 23(5)(a)of the Franchising Code provides that a franchisor must give to a franchisee a copy of the disclosure document relating to the franchise [Understanding disclosure documents].

The disclosure document must be the current disclosure document of the franchisor.

Section 20(1) of the Franchising Code provides that a franchisor must create a disclosure document that complies with the Franchising Code.

In addition, section 21(2) of the Franchising Code provides that the disclosure document must be updated each year within 4 months of the end of the financial year.

While the effect of section 21(1) of the Franchising Code is that a disclosure document is not required to be updated if:

• the franchisor did not enter into a franchise agreement, or only entered into one franchise agreement during the year; and
• the franchisor does not intend to enter into a franchise agreement in the following financial year

For the purposes of section 23(5)(a), the disclosure document must be updated to reflect the position of the franchise at the end of the financial year before the year in which the copy of the disclosure document is given.

4 - A Copy of the Franchising Code

Section 23(5)(b) of the Franchising Code provides that a franchisor must give to a franchisee a copy of the Franchising Code.

For a copy of the Franchising Code click here.

5 - Leasing Information

If the franchisee is leasing or occupying premises from the franchisor or its associate, section 23(2)(b) of the Franchising Code requires the franchisor to give to the franchisee:

• a copy of the lease of the premises, or
• if the franchisor is not in possession of the lease, a summary of the commercial terms of the lease;

• any disclosure statement provided to the franchisor; or
• any information of that kind of which the franchisor is aware.

6 - Other Documents

If the franchise agreement requires the franchisee to enter into any of the documents referred to below, section 30 of the Franchising Code requires the franchisor to give to the franchisee those documents at least 14 days before the franchisee enters into the franchise agreement:

• a lease;
• an intellectual property agreement;
• a security agreement;
• a confidentiality agreement [Understanding Confidentiality Agreements];
• a restraint of trade agreement [Legal Challenges to Restraints of Trade].

Takeaways

The Franchising Code outlines essential documents that must be provided to a franchisee before the franchisee enters into a franchise agreement.

It is important for a franchisor to be aware of its obligations as the franchisor may be subject to significant penalties if the franchisor fails to comply with the requirements of the Franchising Code.

It is also important that the remaining Franchising Code processes for a franchisee's entry into a franchise agreement are followed.