Changes to Franchising Laws: What You Need to Know

Franchising laws have changed again, and if you’re a franchise business owner, it’s important to stay updated with the latest requirements. The government has introduced the online Franchise Disclosure Register, a free database of franchisors’ disclosed information, accessible by the public. This is especially beneficial if you’re considering buying a franchise. For current franchisors, here’s what you need to know about the new disclosure obligations.

Key Requirements for Franchisors

Franchisors must provide the following information as a minimum:

• Name and trading name
• ABN
• Office address
• Phone number
• Contact email
• ANZSIC division and subdivision codes for the industry

Franchisors or their nominated delegate (such as a solicitor) can upload this information to the register via www.franchisedisclosure.gov.au, using their MyGov ID to create a franchise profile.

Deadlines and Penalties

• Deadline for Uploading Information: November 14, 2022
• New Agreements: For any new franchise agreement, franchisors must upload information to the register at least 14 days before entering into the agreement.
• Annual Confirmation: Franchisors must confirm the accuracy of their information annually.
• Penalties: Failure to comply could result in fines of up to $133,200.

Pros and Cons of Owning a Franchise

If you’re considering becoming a business owner, a franchise can be an attractive option. However, there are both advantages and disadvantages to consider.

Pros of Franchising

Brand Recognition
Franchises often come with an established brand name and reputation, providing an easier path to attracting customers.

Supply Chain
Benefit from a well-established supply chain vetted by the parent company, eliminating the need to set one up from scratch.

Infrastructure Support
Franchisees often gain access to the parent company’s infrastructure, including training and marketing support, reducing the effort and time spent developing these resources independently.

Cons of Franchising

High Capital Requirements
Buying a franchise often requires significant capital investment, along with patience to see returns.

Operational Restrictions
Franchises operate under strict guidelines. Franchisees must adhere to the parent company’s rules, leaving little room for personal creativity or innovation.

Loss of Independence
As a franchisee, you are not entirely your own boss. The parent company retains control over how the business is run, which can limit personal freedom and decision-making.

Need Help Navigating Franchise Law?

If you have questions about owning a franchise or the requirements for the new disclosure register, contact GLG Legal today. Our commercial law experts are here to assist.

📞 Phone: (07) 3161 9555
📧 Email: info@glglegal.com.au