Skip to content

Is the cooling-off period in a franchise agreement re-started if the Agreement is varied or amended?

Are you considering entering into a franchise agreement but don’t yet understand your cooling-off period rights? Entering into a franchise agreement represents a huge financial and time commitment on the part of both parties. Further, by taking on the branding and systems of the franchisor, and paying a pretty penny for that privilege, the franchisee is placing a lot of trust in the franchisor; indeed the success or otherwise of the business they are purchasing is largely dependent on how the franchisor conducts the franchise network.

Given their nature, its common sense for franchisees to take the time to really think about whether they want to enter a particular franchise, to examine the workings of the franchise, and to obtain professional advice before they sign on the dotted line.

And that’s where the prescriptive cooling-off period provisions, as contained in the franchising code of conduct (‘the Code’), come into play.

The Franchising Code of Conduct

The Code requires franchisors to disclose certain information, and provide specific documents to a person who proposes to become a franchisee, or to renew or extend a franchise agreement. This information, which includes the franchise agreement, the disclosure document, a copy of the Code and an information statement published by the ACCC, is intended to assist the franchisee party to make an informed decision about whether to proceed with the agreement.

Under the Code this bundle of documents must be provided to a franchisee or prospective franchisee at least 14 days before they:

  1. enter into a franchise agreement (or an agreement to enter into a franchise agreement);
  2. pay any non-refundable money or other valuable consideration to you or an associate in connection with the franchise agreement; or
  3. renew or extend their agreement.

This 14 days is that valuable period for the franchisee to think, analyse, and be advised.

Amending the Documents

But if the documents are amended within those 14 days, either as a result of negotiations between the parties or otherwise, does the 14 day period need to start again? In summary:

  1. if the changes are minor and/ or were made at the request of the franchisee, then no; but
  2. if the changes are more substantial, such as to alter a key term of the contract or its operation (particularly if those changes are contrary to the interest of the franchisee) then yes.
Continue reading this article below the form
Loading form

Conclusion

If you need extra guidance and legal advice on what your rights are in relation to the franchise agreement, get in touch with LegalVision on 1300 544 755. Our franchise lawyers are experts in the space and will provide you with a fixed-fee advice after a free obligation-free consultation.

Register for our free webinars

ACCC Merger Reforms: Key Takeaways for Executives and Legal Counsel

Online
Understand how the ACCC’s merger reforms impact your legal strategy. Register for our free webinar.
Register Now

Ask an Employment Lawyer: Contracts, Performance and Navigating Dismissals

Online
Ask an employment lawyer your contract, performance and dismissal questions in our free webinar. Register today.
Register Now

Stop Chasing Unpaid Invoices: Payment Terms That Actually Work

Online
Stop chasing late payments with stronger terms and protections. Register for our free webinar.
Register Now

Managing Psychosocial Risks: Employer and Legal Counsel Responsibilities

Online
Protect your business by managing workplace psychosocial risks. Register for our free webinar.
Register Now
See more webinars >
Emma Jervis

Emma Jervis

Read all articles by Emma

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2025 Future of Legal Services Innovation Finalist - Legal Innovation Awards

  • Award

    2025 Employer of Choice - Australasian Lawyer

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2022 Law Firm of the Year - Australasian Law Awards