Actions Taken Against Franchisors in 2025
In 2025, the Australian Competition and Consumer Commission (ACCC) took action against several franchisors for non-compliance with new regulations. Several groups have been fined for failing to include mandatory information on the Franchise Disclosure Register as required by the Franchising Code. Among these are Cash Converters Pty Ltd and Mobile Travel Agents Pty Ltd, which both paid $16,500 by failing to comply with Section 93 of the Franchising Code, which requires an annual update or confirmation of franchisor information.
Higher fines have also been imposed on some franchisors. An appeal by Ultra Tune Australia regarding a $1.5 million fine was dismissed by the Full Federal Court in 2025. The fine was imposed for four contempt of court charges for breaching compliance orders issued by a previous court order.
These actions taken against franchisors follow the Federal Government’s allocation of $7.1 million over two years to strengthen the enforcement of the ACCC’s updated Franchising Code. This tightened enforcement also reflects the Commission’s goals of protecting small businesses. ACCC Deputy Chair Catriona Lowe says, “The franchising sector should be on notice that failure to comply with the Franchising Code of Conduct may result in enforcement action by the ACCC.”
The ACCC’s Franchising Code
A new Franchising Code of Conduct was introduced in 2025 and applies to franchise conduct and agreements entered, extended, renewed, or transferred from 1 April 2025. Changes to the code include:
- Franchisors must disclose any significant capital expenditure that the franchisee may be required to incur in their disclosure documents. Franchisors must also discuss that expenditure with prospective franchisees.
- Additional obligations and disclosure of information are required when franchisees must contribute to a specific purpose fund.
- Franchisors must give franchisees a reasonable opportunity to make a return on their investment.
- In certain cases, franchise agreements must include clauses that provide compensation for early termination.
- In limited circumstances, franchisees entering into a franchise agreement can opt out of the cooling-off.
Our Services
With changes to the Franchising Code of Conduct, accompanied by stricter enforcement by the ACCC, all franchisors must be diligent in completing their disclosure registers and meeting other ACCC requirements. Seeking legal advice to ensure practices are compliant is an effective way to mitigate the risk of being fined or otherwise punished by the ACCC.
Contact OpenLegal today at enquiries@openlegal.com.au or 1300 937 574 for a confidential consultation to discuss your situation and explore the best path forward.
Hope Jordan, Intern at OpenLegal
