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The Franchise Disclosure Register is a new system that builds upon the 2021 Franchising Code of Conduct changes. The Australian Department of the Treasury will administer the Register to franchise owners. Ultimately, the Register aims to increase transparency in the franchising sector. Whether you are a franchisor or a prospective franchisee, you must understand the Franchise Disclosure Register and what it means for you. This article will outline some important things to note about the Franchise Disclosure Register and how it will affect you.

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Franchise Disclosure Register

The Franchise Disclosure Register will provide an accessible method for prospective franchise owners to educate themselves before purchasing a franchise. It will provide self-service access to disclosure documents and give potential buyers details of the franchise system and network, including the establishment and ongoing costs. 

Notably, the Register will be available for everyone to access. Franchisors need to provide the following information for the Register:

  • name of the business;
  • registered business name;
  • the franchisor’s ABN;
  • the address of the franchisor’s registered office;
  • franchisor’s principal place of business in Australia;
  • contact details of the franchisor; and
  • the ANZSIC codes for the industry in which the franchise operates.

Franchisors may also choose to upload other documents to the Register, including:

Furthermore, before providing the above documents for inclusion in the Register, you must remove any:

  • personal information that relates to anyone other than the franchisor; 
  • commercially sensitive information; and
  • information that relates to a franchisee or a particular site that a franchisee uses.

Ongoing Reporting Requirements

Franchisors have an ongoing requirement to update the Register. Moreover, this includes confirming that all the information on the Register is current. Further, you must update this information by the 31st of October every financial year. You can find more information in the Australian Treasury’s supporting guide.

Additionally, as a franchisor, you must also publish the relevant disclosure documents and key fact sheets within the same financial year that you receive or create them.

Purpose of the Register

Primarily, the Franchise Disclosure Register aims to increase transparency and access to disclosure information for franchisors and franchisees. As a result, prospective buyers and potential franchisees can educate themselves before entering franchise agreements. Additionally, the Register will likely help to enhance the reputation of the franchising industry as a whole. However, in a more general sense, the Register exists to motivate high-quality disclosure practices across a range of business areas. 

Furthermore, the Register exists alongside other obligations and requirements set out in the Franchising Code of Conduct. As such, franchisors still need to comply with the disclosure requirements before becoming a franchisee and entering into a Franchise Agreement. 

I Am a Franchisor: What Does This Mean For Me?

All franchise systems operating within Australia must participate in the Franchise Disclosure Register. However, you will not need to provide a disclosure document if you are a franchisor who enters into one franchise agreement within a financial year with no intention of entering another in the next financial year. Instead, you will only need to provide your contact details.

Although, as a general rule, if you are a franchisor, you will need to:

This information needs to be uploaded by the 14th of November 2022. Failure to provide this information will constitute a breach of the Franchising Code of Conduct. Further, this may result in penalties of a $133,200 fine.

You may also want to authorise a representative to access the Register on your behalf. In that case, you must provide your authority using the Relationship Authorisation Manager.

Key Takeaways

Whether you are a franchisor or a prospective franchisee, it is essential to understand what the Franchise Disclosure Register is and what it means for you. Some key things to note about the Register are that it:

  • will go live on the 15th of November 2022; 
  • will be available for the public to access; and
  • aims to provide a transparent method for informing prospective franchise owners before purchasing a franchise.

If you need assistance understanding how the franchise disclosure register impacts your business, 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

What is the Franchise Disclosure Register?

The Franchise Disclosure Register is a new system that builds upon 2021 changes to the Franchising Code of Conduct. The Franchise Disclosure Register aims to increase transparency and compliance in the franchising sector.

What is the purpose of the Franchise Disclosure Register?

The Franchise Disclosure Register intends to provide a way to educate prospective franchise purchasers before entering into a franchise agreement. It will provide self-service access to disclosure documents and give potential buyers details of the franchise system and network, including the establishment and ongoing costs. 

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