The new Franchising Code of Conduct, which came into operation on 1 January 2015, requires all Franchisors to update their Disclosure Document to the new format by 31 October 2015.
More generally, the Franchising Code of Conduct requires you to update your Disclosure Document every financial year and have it ready within 4 months of the end of that financial year. This means that for every year, you will need to make sure that your Disclosure Document is updated by 31 October 20XX.
What if I already have updated it to match the new Code?
According to our Franchise Lawyers, if you have already updated it, then you won’t need to worry about updating your Disclosure Document until 4 months after the end of the next financial year. I.e. 31 October 2016.
You won’t, however, need to update your Disclosure Document if:
- You didn’t enter into any new franchise agreements for that financial year;
- You only entered into 1 new franchise agreement for that financial year; or
- You don’t intend to enter into a new franchise agreement for the next financial year.
Despite the above, however, our Franchise Lawyers always recommend as a practical matter that you update your Disclosure Document every year. This is because the Franchising Code of Conduct also obliges you to provide a Disclosure Document to an existing franchisee if they ask for one and the copy that you provide needs to be an updated copy. The only restriction to this is that a Franchisee cannot ask for a copy more than once every 12 months. It’s always more difficult, time consuming and expensive to update a really old Disclosure Document than it is to update a Disclosure Document that is 1 year old.
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