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.

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.

Updated 17 May 2025

Franchising can be a rewarding experience that provides benefits for both the franchisor and the franchisee. But what if either the franchisor or the franchisee wants to end the relationship before the franchise agreement expires?

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?]

If the franchise agreement ends before it expires, this is generally referred to as "termination".

Franchise agreement termination is a complex area, which has increased in complexity since the introduction of the new Franchising Code in April 2025.

A franchisor can 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 applicable Franchising Code of Conduct (the Franchising Code). [What is the Franchising Code of Conduct?]

There are less options for franchisees to terminate a franchise agreement early because franchise agreements do not generally allow a franchisee to simply terminate the franchise agreement. If a franchise agreement contains provisions allowing a franchisee to terminate the franchise agreement, a franchisee can 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