The ACCC continues to be the regulator responsible for this mandatory industry code that applies to the parties to a franchise agreement. According to the ACCC, the new Franchising Code of Conduct will:
- introduce an obligation under the Code for parties to act in good faith in their dealings with one another;
- introduce financial penalties and infringement notices for serious breaches of the Code;
- require franchisors to provide prospective franchisees with a short information sheet outlining the risks and rewards of franchising;
- require franchisors to provide greater transparency in the use of and accounting for money used for marketing and advertising and to set up a separate marketing fund for marketing and advertising fees;
- require additional disclosure about the ability of the franchisor and a franchisee to sell online; and
- prohibit franchisors from imposing significant capital expenditure except in limited circumstances.
The ACCC’s website provides some very useful information for franchisors and franchisees alike, including access to the updated Franchisor Compliance Manual and the Franchisee Manual. These ACCC manuals are compulsory reading for parties to any franchise agreement as they cover, among other things, the rights, responsibilities and obligations of the parties, and how to resolve disputes under the Code.
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