I am a Franchisor. What Do I Need to Disclose on the Franchise Disclosure Register?

In Short

• The Franchise Disclosure Register, effective from 15 November 2022, mandates franchisors to disclose key information about their franchise systems.
• Required details include the franchisor’s name, business name, ABN, contact information, industry codes, operational years, number of franchisees and operational regions.
• Non-compliance can result in significant penalties, emphasising the importance of timely and accurate disclosure.

Tips for Businesses

Ensure all required information is accurately compiled and submitted to the Franchise Disclosure Register by the specified deadlines. Regularly update your disclosure documents to reflect any changes in your franchise system. Consult with legal professionals to maintain compliance and avoid potential penalties.

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Table of Contents

• Who Needs to Provide Information for the Disclosure Register?
• What Information Do I Need to Provide for the Disclosure Register?
• How Do I Publish the Necessary Information on the Disclosure Register?
• When Do You Need to Update the Disclosure Register?
• Key Takeaways
• Frequently Asked Questions

As a franchisor, you have an obligation under the Franchising Code of Conduct to provide key information to the Franchise Disclosure Register (the Disclosure Register. Franchisors must undertake this update each financial year, or face penalties. For this reason, it is essential to understand your ongoing disclosure requirements. This article outlines what information you need to provide on the Disclosure Register. 

Who Needs to Provide Information for the Disclosure Register?

Franchisors are required to provide key information on the Disclosure Register, which was first published on 14 November 2022. These obligations are set out in the Franchising Code of Conduct and apply if you are a franchisor who:

• is entering into a franchise agreement; 
• has a disclosure document and must give it to a prospective franchisee;
• has previously been required to provide information under earlier versions of the Franchising Code; and
• is a master franchisor of the master franchise system that has two or more subfranchisors.

What Information Do I Need to Provide for the Disclosure Register?

Franchisors must provide the following information for inclusion in the Disclosure Register:

• the name of the franchisor;
• the name under which the franchisor conducts business in Australia relevant to the franchise;
• the franchisor’s ABN, where applicable;
• the address, or addresses, of the franchisor’s registered office and principal place of business in Australia;
• the business telephone number and email address of the franchisor;
• the ANZSIC division and subdivision codes for the industry in which the business under the franchise operates; 
• the number of years that the franchise or franchise system has operated in Australia;
• the number of existing franchised businesses and franchisees, and businesses owned or operated by the franchisor or an associate of the franchisor in Australia that is substantially the same as the franchised business; and
• each State or Territory in which a business or franchisee operates.

Additionally, you must disclose:

• whether there are restrictions on the acquisition of goods or services by the franchisee from other sources;
• if the franchisor requires payment before a franchise agreement is entered into, why the money is required, how the money is to be applied, who will hold the money, and the conditions under which payment will be refunded;
• details of the costs payable by a franchisee to start operating the franchised business;
• details of payments payable by a franchisee to the franchisor, or an associate of the franchisor, during the term of the franchise agreement;
• details of payments payable by a franchisee to a person other than the franchisor or an associate of the franchisor;
• whether the franchise agreement may be varied unilaterally by the franchisor;
• the term of the franchise agreement;
• whether a franchisee has the option to renew the franchise agreement;
• whether a franchisee has any rights relating to any goodwill generated by the franchisee;
• whether the franchise agreement includes a restraint of trade or similar clause; and
• any information that section 93(4) of the Franchising Code of Conduct requires you to provide to the Secretary.

If requested, you may be required to provide the above information in a form that the Secretary approves. Please note that the requirements regarding the information you provide may be subject to change.

As a franchisor, you can choose to provide additional documents for inclusion on the Disclosure Register, including your:

• logo; and
• standard form franchise agreement. 

How Do I Publish the Necessary Information on the Disclosure Register?

There are several key steps to follow to publish the necessary information. Fortunately, they are not complex. You will need to:

• create a franchise profile on the Register with your myGovID; and
• obtain authorisation to act on behalf of your ABN for interactions with the Department of Treasury.

When Do You Need to Update the Disclosure Register?

As a franchisor, you must update your registration at least once per financial year. This update is due by the 14th day of the fifth month after your financial year ends. For example, if your financial year runs from 1 July to 30 June, you must update the Disclosure Register by 14 November. The ACCC monitors the register closely and flags franchisors whose details are out of date.

Below is an example of what will appear if your registration is out of date.

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Key Takeaways

Ultimately, it is a requirement for franchisors to submit critical information to the Disclosure Register. All franchisors must comply with this obligation and update the Disclosure Register by 14 November each year at the latest.

There are legal consequences for not complying with the requirements relating to the Disclosure Register, including significant penalties of up to $198,000. Therefore, you should ensure that you have set up a franchise profile and keep it updated annually to comply with these requirements. 

If you need assistance understanding your disclosure requirements as a franchisor, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions