When deciding to purchase a Franchise the Franchisor is required to provide to the potential Franchisee a disclosure document, that among many other things details the current financial position of the franchisor. Under the Franchising Code of Conduct the franchisee is to be provided with a ‘current’ disclosure document, however the term ‘current’ is not defined in the Code. Generally a franchisor will update their Disclosure Document at the end of each financial year.
Amendments to the Franchising Code and the Competition and Consumer Act:
The Federal Government has released information about proposed changes that are to be made to the Trade Practices (Industry Codes – Franchising) Regulation 1998. The proposed amendments are expected to take effect from 1 January 2015 and apply to new franchise agreements entered into on or after 1 January and existing franchise agreements renewed on or after 1 January, with some limited exceptions.