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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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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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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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What exactly is a Franchise Agreement?
Franchising agreements are legally binding relationships between franchisors and franchisees. But what makes them different from other agreements? Learn more about the key clauses of the code of conduct that must be observed in order to ensure a successful franchising agreement.
Franchising code of conduct
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