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A Franchisor Liability Case Study: ASIC v Darranda Pty Ltd
Compliance is an important and ever-changing component of running a business. As a franchisor, it can be tempting to...
4 min read
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.
Topics: Featured Franchising For Franchisors For Franchisees
13 min read
Understanding Franchise Agreement Termination
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
Topics: Featured For Franchisors For Franchisees Exiting A Franchise
7 min read
Consequences of Terminating a Franchise Agreement
Terminating a franchise agreement can have significant consequences.
Economic conditions in Australia remain challenging, placing pressure on both franchisees and franchisors.
According to IBIS1, while the COVID pandemic hampered the performance of franchised businesses over 2020 and 2021, post-pandemic conditions have continued to be difficult. In particular, interest rate rises have caused spending on franchised goods and services to decrease.
While franchise agreements will generally contain post termination provisions designed to protect the franchisor's brand, data suggests that replacing a franchisee may not be a simple process.
Recent figures cited in the Independent Review of the Franchising Code of Conduct indicate that from 2014 to 2023 the number of franchisees in Australia declined by approximately 5.2%.
Additionally, post termination provisions contained in a franchise agreement may negatively impact the franchisee if the franchisee wishes to operate an independent business.
What Happens When a Franchise Agreement is Terminated?
What are the Consequences for a Franchisee when a Franchise Agreement is Terminated?
What are the Consequences for a Franchisor when a Franchise Agreement is Terminated?
Topics: Featured For Franchisors For Franchisees Exiting A Franchise
10 min read
2023 Review of the Franchising Code - Government Response
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.
Topics: Featured Franchising For Franchisors For Franchisees
7 min read
Confidentiality Agreements: A Comprehensive Guide
In today’s business world, the exchange of sensitive information is a common and often necessary practice. Whether it’s during negotiations for the purchase of a franchise business, the entry into a franchise agreement, or the hiring of a new employee, ensuring that this information remains protected is crucial. One of the most effective tools for safeguarding such information is a confidentiality agreement or the inclusion of a confidentiality clause in an agreement.
What is A Franchise Agreement?
Topics: Featured For Franchisors For Franchisees Branding
6 min read
How Much Autonomy Do Franchisees Have In Operating Their Business?
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
Topics: Featured For Franchisors For Franchisees
4 min read
Franchisee Social Media Guidelines: A Comprehensive Overview
Explore the importance of social media policy for franchisees and how it can benefit their businesses.
Topics: Featured Brand Consistency For Franchisors For Franchisees Branding
5 min read
Legal Challenges to Restraint of Trade Clauses in Franchising: What Franchisees Need to Know
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.
Topics: Featured Franchising For Franchisees Dispute Resolution
4 min read
The New Right To Disconnect Law In Australia
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.
Topics: Featured For Franchisors For Franchisees
11 min read
2023 Review of the Franchising Code - Key Findings and Recommendations
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.