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Franchisors must provide franchisees a reasonable opportunity to make a ROI
Recent reforms to the Franchising Code of Conduct introduced a new obligation requiring franchisors to give franchisees a reasonable opportunity to make a return on their investment (ROI). This change reflects concern that some franchise arrangements required franchisees to make substantial upfront investments without a realistic opportunity to make a return on this investment.
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Updates to the Franchising Code of Conduct
The current Franchising Code of Conduct (Old Code) is scheduled to “sunset” (meaning it will automatically expire unless extended or replaced) on 1 April 2025, with the Competition and Consumer (Industry Codes–Franchising) Regulations 2024 (Cth) (New Regulations) coming into effect on the same date.
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Failure to disclose – ACCC penalises Jim’s Group
Jim’s Group Pty Ltd fined $24,420 by The Australian Competition and Consumer Commission (ACCC) for alleged breaches of Competition and Consumer Regulation and misrepresentation of cooling off rights. Franchisors reminded to know their rights and obligations or face hefty financial penalties.
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Updated Franchise Disclosure Register
The Federal Government has proposed regulations for franchisors, including the creation of a Franchise Disclosure Register. Find out what this could mean for the franchising sector and how you could be affected.
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Franchising Code amendments now in effect
The Department of Industry, Science, Energy and Resources proposed amendments to the Franchising Code of Conduct. These includes a broader Alternative Dispute Resolution process, a key facts sheet, extended cooling off period, limits on capital expenditure requirements and increased civil penalties for non-compliance.
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Who is an “officer” in business dealings?
The High Court’s decision in Deputy Commissioner v Huang [2021] HCA 43 confirms the Federal Court may make worldwide asset freezing orders. This is an important development in Australian law.
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Cooperative marketing funds – what are they?
Franchisors must be aware of their obligations when managing cooperative marketing funds. Learn more about the regulations and potential penalties for non-compliance with the Franchising Code.
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Handling pre-contractual representations in franchising
This case serves as a warning to franchisors to be mindful of their pre-contractual representations. Find out what happened and why the Franchisor was awarded over $650,000 in damages.
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Renewing vs extending a franchise – key differences
Discover the two end of term arrangements for Franchise Agreements under the Franchising Code of Conduct and the obligations of the Franchisor. Learn more about renewal and extension processes and the notification period relevant to each.
Franchising law
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