Franchise Disclosure Document Lawyers
Whether you're franchising your business for the first time or need to update an existing disclosure document, we can help you prepare a document that complies with the Franchising Code of Conduct (the Franchising Code) and reflects your system.
Haarsma Lawyers have 40 years experience in servicing the franchise industry. We've prepared hundreds of disclosure documents for franchisors and we understand what's required to comply with the Franchising Code.
Need to prepare a franchise disclosure document?
If you are a new franchisor or you are establishing a new franchise system, you will need to prepare a disclosure document that complies with the Franchising Code of Conduct.
A franchise disclosure document is prescriptive and needs to contain the information required under the Franchising Code.
While we have set out below briefly some of the information required, if you would like more detailed guidance please see our article Understanding Franchise Disclosure Documents: A Comprehensive Guide.
The Franchisor's details and business experience
The franchisor must provide details of the business including the franchisor's business experience, business names and business associates. The franchisor must also provide a statement that the franchise business is solvent.
Litigation
The franchisor must provide details of any current and past litigation. The relevant litigation is generally matters involving fraud, unconscionable conduct, misrepresentation and any breach of a franchise agreement.
Existing Franchisees
The franchise disclosure document must contain details of all existing franchisees.
Intellectual Property
The franchisor must describe and list the intellectual property used in the franchise system.
Territory
The franchisor must provide a prospective franchisee with a history of the site or territory in which the prospective franchisee proposes to operate the franchise business.
Goods and Services
The franchise disclosure document must contain information about the conditions which will be imposed on the franchisee in relation to the purchase and supply of goods and services. For example a franchisee may only be able to purchase goods from the franchisor or approved suppliers.
Fees and Payments
The franchise disclosure document must contain details about any payments which are to be made to the franchisor (including up front and ongoing fees).
The franchise disclosure document must also contain details of any ongoing payments which are to be made to third parties.
Need to update a Franchise Disclosure Document?
A franchisor's franchise disclosure document must be updated each year, within 4 months of the end of the financial year.
Information that needs to be updated includes:
- franchisee information (including existing and exiting franchisees);
- rebate information (if any);
- specific purpose fund statements;
- financial statements or audits.
