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.

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.

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.

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.