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The new Franchising Code of Conduct commences on 1 January 2015

1/1/2015

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A number of new legislation will take effect in 2015.  To begin our new year, from 1 January 2015, the current Franchising Code of Conduct will be repealed, and a new Franchising Code of Conduct will replace it.  The new Code is the outcome of an extensive review, and the Franchise Council of Australia (FCA) has worked collaboratively with both the previous and current Governments during the lengthy consultation process.  The FCA has welcomed the upcoming release of the new Code, stating that it was pleased to see that much of the contribution made by its members had been taken into account.

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.

We can help you understand, apply and implement new legislation in 2015 and beyond - just contact us for assistance.
1 Comment
essaymama link
28/3/2017 03:21:52 pm

The new code is the need of the time and I think this time the government of the Australia is working really unique and for this purpose, government and the legislation conduct the good code. Your information about the ACCC is very useful and amazing.

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