What Franchisors Must Know About the Franchisor Disclosure Register

In Short

• Franchisors must register key details on the Franchise Disclosure Register to ensure legal compliance.
• The register is a public resource, providing transparency about franchisor operations.
• Failure to comply with the disclosure requirements can result in penalties, and potential harm to the franchise’s reputation.

Tips for Businesses
Ensure your franchise is listed on the Franchise Disclosure Register with accurate and up-to-date information. Regularly review your registration details to stay compliant with the law and avoid penalties. This transparency builds trust with potential franchisees and can help prevent costly legal issues down the line.

Summarise with: ChatGPT Perplexity Microsoft Copilot

---

Table of Contents

• The Register
• Your Disclosure Obligations
• What You Need To Do
• Key Takeaways
• Frequently Asked Questions

As a franchisor in Australia, you must understand the requirements set out by the Franchise Disclosure Register (‘the Register’). For instance, you must make your disclosure documents available to prospective franchisees at least 14 days before they enter the franchise agreement. This article outlines the Register and your disclosure obligations under the Franchising Code of Conduct (‘the Code’).

Franchisor Financial Disclosure Factsheet

This factsheet sets out the three key financial disclosure obligations every franchisor needs to comply with.

Download Now

The Register

The Franchise Disclosure Register is a database of all franchisor’s disclosure documents in Australia. Generally, you must make your disclosure document available to prospective franchisees 14 days before they sign the franchise agreement. Nevertheless, the Register will make the disclosure document public for anyone to access. This helps prospective franchisees make informed decisions.

Your Disclosure Obligations

The Code outlines strict disclosure requirements for franchisors. Notably, the documents you will need to make available to franchisees entering the franchise system include the:

• disclosure document; 
• key facts sheet; 
• information statement; 
• franchise agreement; and
• lease documents (if applicable). 

The Code sets out standard forms for the disclosure document and the key facts sheet. Within these documents, you must disclose information related to the operation of the franchise system as a whole, including:

• the structure of your franchise system;
• an overview of current franchisees, including basic statistics as well as the numbers of businesses resold or terminated by the franchisees in the past three years; and
• an overview of your franchise’s financials, including copies of financial statements.

Furthermore, you must provide prospective franchisees with lease documents if you or your associate:

• lease the premises where the franchise business will operate; and 
• subsequently, licence the premises to your franchisee so they can occupy the premises. 

However, you must also provide disclosure of lease documents if you are not directly leasing the premises but would receive a financial benefit from the lease.

What You Need To Do

Firstly, you must create a franchise profile. You can create your franchise profile on the Register using your myGovID. Notably, you must have the authority to act on behalf of your ABN for interactions with the Treasury, which you can manage via your myGovID’s Relationship Authorisation Manager (RAM).

Secondly, you must publish critical disclosure information on the Register by 14 November 2022. This deadline applies regardless of whether you operate on a 30 June or 31 December financial year.

The information you must submit includes:

• your name;
• the name under which you carry on business in Australia;
• your Australian Business Number (‘ABN’);
• the address of your registered office and principal place of business;
• your business telephone number and email address;
• the ANZSIC codes that your franchise business operates under; and 
• any information the Secretary requests. 

The Register may contain other information you provide if it relates to the franchise system and is not personal information related to another individual or a franchisee. For example, you may upload the:

• disclosure document;
• key facts sheet; and
• standard form franchise agreement.

In addition, your obligation under the Code to update franchisees about ‘materially relevant facts’ must also be updated on the Register.

Furthermore, you must update the information on the Register at least once a year. You must update your disclosure documents every year by 31 October. The update should address changes from the previous financial year ending 30 June.

Your failure to provide this information will ultimately breach the Code and incur a civil penalty. For this reason, it is crucial to draft and submit your documents to the Register on time.

Key Takeaways

From 15 November 2022 onwards, prospective franchisees can search and compare franchise information on the national Franchise Disclosure Register. This means that by 14 November 2022, you must submit to the Register:

• an updated disclosure statement;
• key facts sheet; and
• your standard form franchise agreement.

You must also redact from the documents any personal information related to an individual other than you and information related to a particular franchisee. 

If you have any questions about the Franchising Disclosure Register, our experienced franchising lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions