What is the Franchising Code of Conduct?
The Franchising Code regulates the relationship between and conduct of franchisors and franchisees. It is a mandatory industry code across Australia which has been in operation since 1 October 1998. A new version of the code commenced on 1 January 2015.
Some provisions in the Code will not apply to Franchise Agreements entered into before 1 January 2015 if the agreement has not been renewed, transferred or varied in any way on or after that date.
The Franchising Code outlines the rights and responsibilities of the franchisor and franchisee. It includes:
- Disclosure requirements
- A good faith obligation
- A dispute resolution mechanism
- A cooling-off period
- Procedures for ending a franchise agreement
For further detail about these provisions and how to comply with the obligations under the code, read our article ‘What is involved in complying with the Franchising Code?’
The Code is regulated by the Australian Competition and Consumer Commission (ACCC) who may investigate and pursue alleged breaches of the Code. The ACCC is an independent statutory authority which regulates competition and consumer law in Australia. Financial penalties and infringement notices may be issued under the Code for breaches such as:
- A failure to act in good faith
- Not providing a disclosure document
- Not attending mediation during a dispute
The ACCC also provides educational material on its website about franchising and how to comply with the Franchising Code of Conduct.
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