A franchise agreement (Franchise Agreement) is defined in clause 5(1) of the Franchising Code of Conduct (Code), located in Schedule 1 of the Competition and Consumer (Industry Codes–Franchising) Regulation 2014 – as:
- a written, oral or implied agreement;
- in which a person (Franchisor) grants to another person (Franchisee) the right to carry on the business of offering, supplying or distributing goods or services in Australia under a system or marketing plan substantially determined, controlled or suggested by the Franchisor; and
- under which the business will be substantially or materially associated with a trade mark, advertising or a commercial symbol that is owned, used, licensed or specified by the Franchisor or an associate of the franchisor; and
- under which, before starting or continuing the business, the Franchisee must pay or agree to pay to the Franchisor or their associate an amount; for example, an initial capital investment fee or a payment for goods or services.