Previously, an ‘unfair’ contract term could be declared void. However, from 9 November 2023, franchisors are prohibited from entering into standard form contracts with franchisees that contain unfair terms. Franchisors are also prohibited from relying on unfair terms, which have been renewed or varied on or after 9 November 2023. Doing so may attract substantial financial court penalties, now potentially in the millions.

Issues will inevitably arise in a franchise relationship. Sometimes, those issues can be dealt with quickly and in a way that allows both parties to carry on their business in a positive manner. Other times, an issue has become too big, or a series of smaller issues linger, and some type of third party intervention is required.

Embarking on a franchise venture in Australia is more than just a business decision; it's a step towards realising entrepreneurial aspirations with the guidance of seasoned experts.

Starting a franchise combines the innovative spirit of a startup with the stability of a recognised brand. This guide from our team of legal experts is designed to ensure you're well-equipped to turn your franchise vision into a thriving business.

In late 2021, the much-anticipated Franchise Disclosure Register was announced by the government of the day. Around that time, Holman Webb dove into what the register would look like, and what franchisors would need to do to prepare for its introduction. See our November 2021 article ‘The Franchise Disclosure Register – What is it and When Does it Begin?’.  The register is now in force.

Key Takeaways:

• Franchisors must, if they haven’t already, create a profile on the Franchise Disclosure Register as soon as possible and provide the mandatory information.
   
• The profile and information provided should be updated at least annually. Franchisors should also take care to make sure the information provided is consistent with their disclosure document and key facts sheet.

The highly-anticipated changes to the Franchising Code of Conduct are now in force.

These changes follow a parliamentary inquiry into the Code, which began in 2018. The inquiry saw many franchisees explain how their franchised business failed, and the consequences on their lives. It also exposed questionable business strategies by some franchisors, and has directly led to at least one enforcement action by the Australian Competition and Consumer Commission.

It is important for both franchisors and franchisees to understand that significant changes to the Code are now in force – many of which involve imposing civil penalties for breach.

This article contains a summary of five core areas that have seen significant change. 

Trade marks are the essence of franchising. 

All franchise systems strive for widespread recognition of their 'brand'. A common thread between successful franchise systems is that their customers receive a consistent level of quality in goods and services provided under instantly recognisable trade marks. 

However, there are often complexities in the registration and use of trade marks within a franchise system. For franchisors, getting the licensing right is not always clear cut, nor is being able to secure registrations for new products. On the other hand, franchisees will often enhance the reputation of a trade mark, but have no ownership interest and can carry the risk of infringing a competitor's trade mark. 

This article explores the importance of trade marks to a franchise system, and the key parties involved in it.