Part 1
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Commonwealth legislation
The Franchising Code of Conduct imposes mandatory rules for franchisors and franchisees in Australia, requiring honest, cooperative dealings, robust pre-signing disclosure with a 14‑day cooling‑off right, protections and compensation for certain early terminations, mandatory dispute-resolution pathways, public registration of franchise information, and strict handling of collective funds. It covers most franchise arrangements (not employers or some cooperatives) and aims to correct power imbalances by improving transparency and protecting small business franchisees.
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Direct links to the current provisions in Competition and Consumer (Industry Codes—Franchising) Regulations 2024.
This instrument is the Competition and Consumer (Industry Codes—Franchising) Regulations 2024.
This instrument is made under the Competition and Consumer Act 2010.
This instrument prescribes a mandatory industry code for the franchising industry.
The Code requires franchisors, franchisees and prospective franchisees:
(a) to act in good faith towards one another; and
(b) to do certain things, and observe certain cooling‑off periods, before entering into, renewing, extending, transferring or terminating franchise agreements; and
(c) to do certain things in relation to disputes and dispute resolution.
The Code also includes:
(a) requirements about the terms of franchise agreements; and
(b) particular requirements for new vehicle dealership franchise agreements; and
(c) requirements relating to the Franchise Disclosure Register; and
(d) civil penalty provisions for contraventions of requirements.
The Code also confers functions on:
(a) the Australian Small Business and Family Enterprise Ombudsman in relation to the Code; and
(b) the Chairperson of the Australian Competition and Consumer Commission in relation to the Franchise Disclosure Register.
Note: A number of expressions used in this instrument are defined in the Act, including the following:
(a) contract;
(b) corporation;
(c) personal information;
(d) supply.
(1) In this instrument:
ABN has the same meaning as in the A New Tax System (Australian Business Number) Act 1999.
Act means the Competition and Consumer Act 2010.
ADR practitioner means a conciliator or mediator.
ADR process means conciliation or mediation.
ANZSIC division and subdivision codes means the division and subdivision codes for an industry that are specified in the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (Revision 2.0), published by the Australian Bureau of Statistics on 26 June 2013.
Note: The Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (Revision 2.0) could in 2024 be viewed on the Australian Bureau of Statistics website (https://www.abs.gov.au).
associate, for a franchisor, means a person:
(a) who:
(i) is a director or related body corporate, or a director of a related body corporate, of the franchisor; or
(ii) for a franchisor that is a proprietary company (within the meaning of the Corporations Act)—directly or indirectly owns, controls, or holds with power to vote, at least 15% of the issued voting shares in the franchisor; or
(iii) is a partner of the franchisor; and
(b) whose relationship with the franchisor is relevant to the franchise system, including because:
(i) the person supplies goods or services to a franchisee; or
(ii) the person gives the franchisee a right to occupy premises, whether under a lease or otherwise; or
(iii) the person owns intellectual property used in the franchise system; or
(iv) the person is involved in market research, market testing, market development, sales promotion or management of the franchise system.
Code means the industry code set out in Chapter 2.
complainant: see section 70.
Co‑operatives National Law means the Law set out in the appendix to the Co‑operatives (Adoption of National Law) Act 2012 (NSW), as in force on 1 April 2025, and applying in a State or Territory under the following:
(a) the Co‑operatives (Adoption of National Law) Act 2012 (NSW);
(b) the Co‑operatives National Law Application Act 2013 (Vic.);
(c) the Co‑operatives National Law Act 2020 (Qld);
(d) the Co‑operatives National Law (South Australia) Act 2013 (SA);
(e) the Co‑operatives National Law (Tasmania) Act 2015 (Tas.);
(f) the Co‑operatives National Law (ACT) Act 2017 (ACT);
(g) the Co‑operatives (National Uniform Legislation) Act 2015 (NT).
Corporations Act means the Corporations Act 2001.
disclosure document means a document created in compliance, or purported compliance, with section 20.
engage in conduct means:
(a) do an act; or
(b) omit to perform an act.
extend:
(a) in relation to the scope of a franchise agreement, means a material change to:
(i) the terms and conditions of the agreement; or
(ii) the rights of a person under or in relation to the agreement; or
(iii) the liabilities that would be imposed on a person under or in relation to the agreement; or
(b) in relation to the term of a franchise agreement, occurs when the period of the agreement is extended, other than because of an option exercisable by the franchisee during the term of the agreement.
Fair Work Act means the Fair Work Act 2009.
Fair Work civil remedy provision means a civil remedy provision within the meaning of the Fair Work Act.
Fair Work related offence provision means a related offence provision within the meaning of the Fair Work Act.
Fair Work serious contravention means a serious contravention within the meaning of the Fair Work Act.
financial year, in relation to a franchisor and a franchise, means a period of 12 months in respect of which financial statements relating to the franchise are prepared for the franchisor.
franchise includes the following:
(a) the rights and obligations under a franchise agreement;
(b) a master franchise;
(c) a subfranchise;
(d) an interest in a franchise.
franchise agreement: see section 7.
franchisee includes the following:
(a) a person to whom a franchise is granted;
(b) a person who otherwise participates in a franchise as a franchisee;
(c) a subfranchisor in its relationship with a franchisor;
(d) a subfranchisee in its relationship with a subfranchisor.
franchise system includes a business system in which a franchisor grants a franchise to a franchisee.
franchisor includes the following:
(a) a person who grants a franchise;
(b) a person who otherwise participates in a franchise as a franchisor;
(c) a subfranchisor in its relationship with a subfranchisee;
(d) a subfranchisor in a master franchise system;
(e) a subfranchisor in its relationship with a franchisee.
fund administrator, of a specific purpose fund, means:
(a) the franchisor or master franchisor who controls or administers the fund; or
(b) if the franchisor or master franchisor has authorised an associate to control or administer the fund for the franchisor or master franchisor—the authorised associate.
industry code has the meaning given by subsection 51ACA(1) of the Act.
interest in a franchise includes a legal or beneficial interest in:
(a) a franchise agreement or a franchised business, whether arising as a result of a guarantee of a franchisee’s obligations under the agreement or otherwise; or
(b) shares or voting rights in a corporation, not being a listed corporation (within the meaning of the Corporations Act), that owns a franchised business; or
(c) units or voting rights in a unit or other trust that owns a franchised business; or
(d) the capital or income of a partnership that owns a franchised business.
master franchise means a franchise in which the franchisor grants to a subfranchisor the right:
(a) to grant a subfranchise; or
(b) to participate in a subfranchise.
motor vehicle means a vehicle that uses, or is designed to use, volatile spirit, gas, oil, electricity or any other power (except human or animal power) as the principal means of propulsion, but does not include a vehicle used, or designed to be used, on a railway or tramway.
Note: Examples of motor vehicles are as follows:
(a) motor car;
(b) motorcycle;
(c) tractor;
(d) motorised farm machinery;
(e) motorised construction machinery;
(f) aircraft;
(g) motor boat.
motor vehicle dealership:
(a) means a business of:
(i) buying, selling, exchanging or leasing motor vehicles that is conducted by a person other than a person who is only involved as a credit provider, or provider of other financial services, in the purchase, sale, exchange or lease; and
(ii) any servicing or repairing of motor vehicles by that business; and
(b) includes a business of:
(i) selling motor vehicles that is conducted by a person (for the purposes of this instrument, the franchisee) who sells the motor vehicles as an agent for a principal (for the purposes of this instrument, the franchisor); and
(ii) any servicing or repairing of motor vehicles by that business.
new light goods vehicle means a new road vehicle of the kind referred to in clause 4.5.5 of the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005.
new passenger vehicle means a new road vehicle of a kind referred to in clause 4.3 of the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005.
new road vehicle has the same meaning as in section 78 of the Road Vehicle Standards Act 2018.
new vehicle dealership agreement means a motor vehicle dealership agreement relating to a motor vehicle dealership that predominantly deals in new passenger vehicles or new light goods vehicles (or both).
Note: A motor vehicle dealership agreement is taken to be a franchise agreement (see paragraph 7(2)(c)).
obligation to act in good faith: see section 18.
old regulations means the Competition and Consumer (Industry Codes—Franchising) Regulation 2014, as in force before 1 April 2025.
Ombudsman means the Australian Small Business and Family Enterprise Ombudsman.
prospective franchisee means a person:
(a) who deals with a franchisor for the right to be granted a franchise; or
(b) who seeks to acquire a franchise business through the transfer of a franchise agreement.
Register means the register established under clause 53 of Schedule 1 to the old regulations.
renew, in relation to a franchise agreement, occurs when the franchisee exercises an option during the term of the agreement to renew the agreement.
respondent: see section 70.
Secretary means the Secretary of the Department that is administered by the Minister administering the Australian Small Business and Family Enterprise Ombudsman Act 2015.
serious offence means:
(a) an offence under any law of the Commonwealth or a State or a Territory for which, if the act or omission had taken place in the Jervis Bay Territory, a person would be liable, on first conviction, to imprisonment for a period of not less than 5 years; or
(b) a contravention of any provision of the Corporations Act.
Note: Jervis Bay Territory is mentioned because it is a jurisdiction in which the Commonwealth has control over the criminal law.
specific purpose fund means a fund:
(a) that is controlled or administered:
(i) by a franchisor or a master franchisor; or
(ii) for a franchisor or a master franchisor by an associate for the franchisor or master franchisor; and
(b) to which, under a franchise agreement, a franchisee is required to pay money (whether the franchisee is a franchisee or subfranchisee of the franchisor or master franchisor); and
(c) that, under the franchise agreement, must be used for a specified common purpose relating to the operation of the franchised business.
Note: Examples of specific purpose funds could include a marketing fund for advertising or a cooperative fund for information technology.
subfranchisor means a person who is:
(a) a franchisee in relation to a master franchise; and
(b) a franchisor in relation to a subfranchise granted under the master franchise.
trade mark has the meaning given by the Trade Marks Act 1995.
Note: A trade mark is a sign (including any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent (or any combination of these)) used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person (see sections 6 and 17 of the Trade Marks Act 1995).
transfer, in relation to a franchise agreement, includes a situation in which:
(a) the agreement is terminated on the basis that a new franchise agreement is entered into between the franchisor and a prospective franchisee; or
(b) the franchisee’s rights and obligations under the agreement are assigned to a prospective franchisee; or
(c) the agreement contemplates a transfer in specified circumstances and those circumstances happen.
virtual attendance technology means any technology that allows a person to attend an ADR process or an arbitration without being physically present at the ADR process or arbitration.
(2) In this instrument, the following terms have the meanings given by the Corporations Act: (a) ACN; (b) ARBN; (c) body corporate; (d) Chapter 5 body corporate; (e) consolidated entity; (f) director; (g) insolvent under administration; (h) misconduct; (i) officer; (j) registered company auditor; (k) registered office; (l) related body corporate.
(1) A franchise agreement is an agreement: (a) that takes the form, in whole or part, of any of the following: (i) a written agreement; (ii) an oral agreement; (iii) an implied agreement; and (b) in which a person (the franchisor) grants to another person (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services in Australia under a system or marketing plan substantially determined, controlled or suggested by the franchisor or an associate of the franchisor; and (c) under which the operation of the business will be substantially or materially associated with a trade mark, marketing or a commercial symbol: (i) owned, used or licensed by the franchisor or an associate of the franchisor; or (ii) specified by the franchisor or an associate of the franchisor; and (d) under which, before starting or continuing the business, the franchisee must pay or agree to pay to the franchisor or an associate of the franchisor an amount including, for example: (i) an initial capital investment fee; or (ii) a payment for goods or services; or (iii) a fee based on a percentage of gross or net income whether or not called a royalty or franchise service fee; or (iv) a training fee or training school fee; but excluding: (v) payment for goods and services supplied on a genuine wholesale basis; or (vi) repayment by the franchisee of a loan from the franchisor or an associate of the franchisor; or (vii) payment for goods taken on consignment and supplied on a genuine wholesale basis; or (viii) payment of market value for purchase or lease of real property, fixtures, equipment or supplies needed to start business or to continue business under the franchise agreement. (2) For the purposes of subsection (1), each of the following is taken to be a franchise agreement: (a) the transfer or renewal of a franchise agreement; (b) the extension of the term or the scope of a franchise agreement; (c) a motor vehicle dealership agreement. (3) However, none of the following in itself constitutes a franchise agreement: (a) an employer and employee relationship; (b) a partnership relationship; (c) a landlord and tenant relationship; (d) a mortgagor and mortgagee relationship; (e) a lender and borrower relationship.
For the purposes of section 51AE of the Act, the industry code set out in Chapter 2: (a) is prescribed for the purposes of Part IVB of the Act; and (b) is declared to be a mandatory industry code.
A provision of this instrument has no effect to the extent (if any) to which the provision’s operation would result in the acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) otherwise than on just terms (within the meaning of that paragraph).
Franchise agreements to which another mandatory industry code applies (1) Subject to subsection (2), the Code does not apply to a franchise agreement to which another mandatory industry code, prescribed under section 51AE of the Act, applies. (2) However, the Code applies to a franchise agreement to which either of the following industry codes apply: (a) the industry code set out in Part 2 of the Competition and Consumer (Industry Codes—Food and Grocery) Regulations 2024; (b) the industry code set out in Schedule 1 to the Competition and Consumer (Industry Codes—Unit Pricing) Regulations 2021. Certain franchise agreements relating to pre‑existing business relationships (3) The Code does not apply to a franchise agreement if: (a) the franchise agreement is for goods or services that are substantially the same as those supplied by the franchisee before entering into the franchise agreement; and (b) the franchisee has supplied those goods or services for at least 2 years immediately before entering into the franchise agreement; and (c) sales under the franchise are likely to provide no more than 20% of the franchisee’s gross turnover for goods or services of that kind for the first year of the franchise. (4) Subsection (3) ceases to apply to a franchise agreement if: (a) sales under the franchise provide more than 20% of the franchisee’s gross turnover for the goods or services for 3 consecutive years; and (b) the franchisee notifies the franchisor in writing that paragraph (a) of this subsection applies. Franchise agreements that form part of arrangements relating to certain co‑operatives or mutual entities (5) The Code does not apply in relation to a franchise agreement that forms part of arrangements under which the franchisee is: (a) a member of a co‑operative that is entered on a register maintained under: (i) the Co‑operatives National Law; or (ii) the Co‑operatives Act 2009 (WA), as in force on 1 April 2025; or (b) a member with voting rights of a mutual entity (within the meaning of the Corporations Act).
Note: For Co‑operatives National Law, see subsection 6(1). For mutual entity, see section 51M of the Corporations Act.
A provision of Chapter 2 that is of one of the following kinds and sets out at its foot a pecuniary penalty indicated by the words “civil penalty” is a civil penalty provision of the industry code set out in that Chapter for the purposes of Part IVB and section 76 of the Act: (a) a subsection; (b) a section that is not divided into subsections.
(1) The Minister must ensure that a review of this instrument is undertaken. (2) The review must commence before 1 April 2030. (3) The review must assess the role, impact and operation of this instrument. (4) The Minister must ensure that a written report of the review is prepared. (5) The Minister must cause a copy of the report of the review to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.
Disclosure of personal information in accordance with item 6(5) of Schedule 1 is authorised for the purposes of Australian Privacy Principle 6.2(b) under the Privacy Act 1988.
Chapter 2—Franchising Code of Conduct
This Chapter sets out an industry code that relates to the industry of franchising.
The purpose of this Code is to: (a) regulate the conduct of participants in franchising towards other participants in franchising, in particular to address the imbalance of power between franchisors and franchisees and prospective franchisees; and (b) improve standards of conduct and practice in the industry to minimise disputes through: (i) better disclosure of information, to inform decision‑making; and (ii) setting out requirements for franchise agreements; and (c) provide a fair and equitable dispute resolution procedure for disputes arising under this Code or a franchise agreement.
The Australian Small Business and Family Enterprise Ombudsman has the following functions in relation to this Code: (a) keeping lists of persons who can provide services of arbitration, conciliation or mediation for the purposes of this Code or of a franchise agreement; (b) in accordance with this Code, appointing persons who can provide services of arbitration, conciliation or mediation of disputes for the purposes of this Code or a complaint handling procedure of a franchise agreement, on request by one or more of the parties; (c) receiving information about disputes that are being, or have been, dealt with under this Code or a complaint handling procedure of a franchise agreement; (d) regularly providing to the Minister statistical information relating to disputes that have been or are being dealt with under this Code or a complaint handling procedure of a franchise agreement; (e) in accordance with this Code, publicising the names of franchisors who refuse to engage in, or who withdraw from, an ADR process for a dispute.
(1) This section has effect for the purposes of the following civil penalty provisions of this Code: (a) subsections 34(1) and (2); (b) subsections 45(2), (3) and (5); (c) subsection 46(2); (d) section 64. (2) The amount of the pecuniary penalty for a contravention of a civil penalty provision referred to in subsection (1) by a body corporate is the greatest of the following: (a) $10,000,000; (b) if the Court can determine the value of the benefit that the body corporate, and any body corporate related to the body corporate, has obtained directly or indirectly and that is reasonably attributable to the contravention—3 times the value of that benefit; (c) if the Court cannot determine the value of that benefit—10% of the adjusted turnover of the body corporate during the period of 12 months ending at the end of the month in which the contravention occurred.
Obligation to act in good faith (1) Each party to a franchise agreement must act towards another party with good faith, within the meaning of the unwritten law from time to time, in respect of any matter arising under or in relation to: (a) the agreement; and (b) this Code. This is the obligation to act in good faith.
Civil penalty: 600 penalty units.
(2) The obligation to act in good faith also applies to a person who proposes to become a party to a franchise agreement in respect of: (a) any dealing or dispute relating to the proposed agreement; and (b) the negotiation of the proposed agreement; and (c) this Code. Matters to which a court may and must have regard (3) Without limiting the matters to which a court may have regard for the purpose of determining whether a party to a franchise agreement has contravened subsection (1): (a) for all agreements—the court may have regard to: (i) whether the party acted honestly and not arbitrarily; and (ii) whether the party cooperated to achieve the purposes of the agreement; and (b) for a new vehicle dealership agreement—the court must have regard to whether the terms of the agreement are fair and reasonable. Franchisor must not enter into franchise agreement that includes provision limiting or excluding obligation to act in good faith (4) A franchisor must not enter into a franchise agreement that includes a provision that limits or excludes, or purports to limit or exclude, the obligation to act in good faith.
Civil penalty: 600 penalty units.
(5) A franchisor must not enter into a franchise agreement that includes a provision that limits or excludes, or purports to limit or exclude, the obligation to act in good faith by applying, adopting or incorporating, with or without modification, the words of another document, as in force at a particular time or as in force from time to time, in the agreement.
Civil penalty: 600 penalty units.
Other actions may be taken consistently with the obligation (6) To avoid doubt, the obligation to act in good faith does not prevent a party to a franchise agreement, or a person who proposes to become such a party, from acting in the party’s, or the person’s, legitimate commercial interests. (7) To avoid doubt, if a franchise agreement does not: (a) give the franchisee an option to renew the agreement; or (b) allow the franchisee to extend the agreement; this does not mean that the franchisor has not acted in good faith in negotiating or giving effect to the agreement.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
This instrument is the Competition and Consumer (Industry Codes—Franchising) Regulations 2024.
This instrument is made under the Competition and Consumer Act 2010.
This instrument prescribes a mandatory industry code for the franchising industry.
The Code requires franchisors, franchisees and prospective franchisees:
(a) to act in good faith towards one another; and
(b) to do certain things, and observe certain cooling‑off periods, before entering into, renewing, extending, transferring or terminating franchise agreements; and
(c) to do certain things in relation to disputes and dispute resolution.
The Code also includes:
(a) requirements about the terms of franchise agreements; and
(b) particular requirements for new vehicle dealership franchise agreements; and
(c) requirements relating to the Franchise Disclosure Register; and
(d) civil penalty provisions for contraventions of requirements.
The Code also confers functions on:
(a) the Australian Small Business and Family Enterprise Ombudsman in relation to the Code; and
(b) the Chairperson of the Australian Competition and Consumer Commission in relation to the Franchise Disclosure Register.
Note: A number of expressions used in this instrument are defined in the Act, including the following:
(a) contract;
(b) corporation;
(c) personal information;
(d) supply.
(1) In this instrument:
ABN has the same meaning as in the A New Tax System (Australian Business Number) Act 1999.
Act means the Competition and Consumer Act 2010.
ADR practitioner means a conciliator or mediator.
ADR process means conciliation or mediation.
ANZSIC division and subdivision codes means the division and subdivision codes for an industry that are specified in the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (Revision 2.0), published by the Australian Bureau of Statistics on 26 June 2013.
Note: The Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (Revision 2.0) could in 2024 be viewed on the Australian Bureau of Statistics website (https://www.abs.gov.au).
associate, for a franchisor, means a person:
(a) who:
(i) is a director or related body corporate, or a director of a related body corporate, of the franchisor; or
(ii) for a franchisor that is a proprietary company (within the meaning of the Corporations Act)—directly or indirectly owns, controls, or holds with power to vote, at least 15% of the issued voting shares in the franchisor; or
(iii) is a partner of the franchisor; and
(b) whose relationship with the franchisor is relevant to the franchise system, including because:
(i) the person supplies goods or services to a franchisee; or
(ii) the person gives the franchisee a right to occupy premises, whether under a lease or otherwise; or
(iii) the person owns intellectual property used in the franchise system; or
(iv) the person is involved in market research, market testing, market development, sales promotion or management of the franchise system.
Code means the industry code set out in Chapter 2.
complainant: see section 70.
Co‑operatives National Law means the Law set out in the appendix to the Co‑operatives (Adoption of National Law) Act 2012 (NSW), as in force on 1 April 2025, and applying in a State or Territory under the following:
(a) the Co‑operatives (Adoption of National Law) Act 2012 (NSW);
(b) the Co‑operatives National Law Application Act 2013 (Vic.);
(c) the Co‑operatives National Law Act 2020 (Qld);
(d) the Co‑operatives National Law (South Australia) Act 2013 (SA);
(e) the Co‑operatives National Law (Tasmania) Act 2015 (Tas.);
(f) the Co‑operatives National Law (ACT) Act 2017 (ACT);
(g) the Co‑operatives (National Uniform Legislation) Act 2015 (NT).
Corporations Act means the Corporations Act 2001.
disclosure document means a document created in compliance, or purported compliance, with section 20.
engage in conduct means:
(a) do an act; or
(b) omit to perform an act.
extend:
(a) in relation to the scope of a franchise agreement, means a material change to:
(i) the terms and conditions of the agreement; or
(ii) the rights of a person under or in relation to the agreement; or
(iii) the liabilities that would be imposed on a person under or in relation to the agreement; or
(b) in relation to the term of a franchise agreement, occurs when the period of the agreement is extended, other than because of an option exercisable by the franchisee during the term of the agreement.
Fair Work Act means the Fair Work Act 2009.
Fair Work civil remedy provision means a civil remedy provision within the meaning of the Fair Work Act.
Fair Work related offence provision means a related offence provision within the meaning of the Fair Work Act.
Fair Work serious contravention means a serious contravention within the meaning of the Fair Work Act.
financial year, in relation to a franchisor and a franchise, means a period of 12 months in respect of which financial statements relating to the franchise are prepared for the franchisor.
franchise includes the following:
(a) the rights and obligations under a franchise agreement;
(b) a master franchise;
(c) a subfranchise;
(d) an interest in a franchise.
franchise agreement: see section 7.
franchisee includes the following:
(a) a person to whom a franchise is granted;
(b) a person who otherwise participates in a franchise as a franchisee;
(c) a subfranchisor in its relationship with a franchisor;
(d) a subfranchisee in its relationship with a subfranchisor.
franchise system includes a business system in which a franchisor grants a franchise to a franchisee.
franchisor includes the following:
(a) a person who grants a franchise;
(b) a person who otherwise participates in a franchise as a franchisor;
(c) a subfranchisor in its relationship with a subfranchisee;
(d) a subfranchisor in a master franchise system;
(e) a subfranchisor in its relationship with a franchisee.
fund administrator, of a specific purpose fund, means:
(a) the franchisor or master franchisor who controls or administers the fund; or
(b) if the franchisor or master franchisor has authorised an associate to control or administer the fund for the franchisor or master franchisor—the authorised associate.
industry code has the meaning given by subsection 51ACA(1) of the Act.
interest in a franchise includes a legal or beneficial interest in:
(a) a franchise agreement or a franchised business, whether arising as a result of a guarantee of a franchisee’s obligations under the agreement or otherwise; or
(b) shares or voting rights in a corporation, not being a listed corporation (within the meaning of the Corporations Act), that owns a franchised business; or
(c) units or voting rights in a unit or other trust that owns a franchised business; or
(d) the capital or income of a partnership that owns a franchised business.
master franchise means a franchise in which the franchisor grants to a subfranchisor the right:
(a) to grant a subfranchise; or
(b) to participate in a subfranchise.
motor vehicle means a vehicle that uses, or is designed to use, volatile spirit, gas, oil, electricity or any other power (except human or animal power) as the principal means of propulsion, but does not include a vehicle used, or designed to be used, on a railway or tramway.
Note: Examples of motor vehicles are as follows:
(a) motor car;
(b) motorcycle;
(c) tractor;
(d) motorised farm machinery;
(e) motorised construction machinery;
(f) aircraft;
(g) motor boat.
motor vehicle dealership:
(a) means a business of:
(i) buying, selling, exchanging or leasing motor vehicles that is conducted by a person other than a person who is only involved as a credit provider, or provider of other financial services, in the purchase, sale, exchange or lease; and
(ii) any servicing or repairing of motor vehicles by that business; and
(b) includes a business of:
(i) selling motor vehicles that is conducted by a person (for the purposes of this instrument, the franchisee) who sells the motor vehicles as an agent for a principal (for the purposes of this instrument, the franchisor); and
(ii) any servicing or repairing of motor vehicles by that business.
new light goods vehicle means a new road vehicle of the kind referred to in clause 4.5.5 of the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005.
new passenger vehicle means a new road vehicle of a kind referred to in clause 4.3 of the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005.
new road vehicle has the same meaning as in section 78 of the Road Vehicle Standards Act 2018.
new vehicle dealership agreement means a motor vehicle dealership agreement relating to a motor vehicle dealership that predominantly deals in new passenger vehicles or new light goods vehicles (or both).
Note: A motor vehicle dealership agreement is taken to be a franchise agreement (see paragraph 7(2)(c)).
obligation to act in good faith: see section 18.
old regulations means the Competition and Consumer (Industry Codes—Franchising) Regulation 2014, as in force before 1 April 2025.
Ombudsman means the Australian Small Business and Family Enterprise Ombudsman.
prospective franchisee means a person:
(a) who deals with a franchisor for the right to be granted a franchise; or
(b) who seeks to acquire a franchise business through the transfer of a franchise agreement.
Register means the register established under clause 53 of Schedule 1 to the old regulations.
renew, in relation to a franchise agreement, occurs when the franchisee exercises an option during the term of the agreement to renew the agreement.
respondent: see section 70.
Secretary means the Secretary of the Department that is administered by the Minister administering the Australian Small Business and Family Enterprise Ombudsman Act 2015.
serious offence means:
(a) an offence under any law of the Commonwealth or a State or a Territory for which, if the act or omission had taken place in the Jervis Bay Territory, a person would be liable, on first conviction, to imprisonment for a period of not less than 5 years; or
(b) a contravention of any provision of the Corporations Act.
Note: Jervis Bay Territory is mentioned because it is a jurisdiction in which the Commonwealth has control over the criminal law.
specific purpose fund means a fund:
(a) that is controlled or administered:
(i) by a franchisor or a master franchisor; or
(ii) for a franchisor or a master franchisor by an associate for the franchisor or master franchisor; and
(b) to which, under a franchise agreement, a franchisee is required to pay money (whether the franchisee is a franchisee or subfranchisee of the franchisor or master franchisor); and
(c) that, under the franchise agreement, must be used for a specified common purpose relating to the operation of the franchised business.
Note: Examples of specific purpose funds could include a marketing fund for advertising or a cooperative fund for information technology.
subfranchisor means a person who is:
(a) a franchisee in relation to a master franchise; and
(b) a franchisor in relation to a subfranchise granted under the master franchise.
trade mark has the meaning given by the Trade Marks Act 1995.
Note: A trade mark is a sign (including any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent (or any combination of these)) used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person (see sections 6 and 17 of the Trade Marks Act 1995).
transfer, in relation to a franchise agreement, includes a situation in which:
(a) the agreement is terminated on the basis that a new franchise agreement is entered into between the franchisor and a prospective franchisee; or
(b) the franchisee’s rights and obligations under the agreement are assigned to a prospective franchisee; or
(c) the agreement contemplates a transfer in specified circumstances and those circumstances happen.
virtual attendance technology means any technology that allows a person to attend an ADR process or an arbitration without being physically present at the ADR process or arbitration.
(2) In this instrument, the following terms have the meanings given by the Corporations Act: (a) ACN; (b) ARBN; (c) body corporate; (d) Chapter 5 body corporate; (e) consolidated entity; (f) director; (g) insolvent under administration; (h) misconduct; (i) officer; (j) registered company auditor; (k) registered office; (l) related body corporate.
(1) A franchise agreement is an agreement: (a) that takes the form, in whole or part, of any of the following: (i) a written agreement; (ii) an oral agreement; (iii) an implied agreement; and (b) in which a person (the franchisor) grants to another person (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services in Australia under a system or marketing plan substantially determined, controlled or suggested by the franchisor or an associate of the franchisor; and (c) under which the operation of the business will be substantially or materially associated with a trade mark, marketing or a commercial symbol: (i) owned, used or licensed by the franchisor or an associate of the franchisor; or (ii) specified by the franchisor or an associate of the franchisor; and (d) under which, before starting or continuing the business, the franchisee must pay or agree to pay to the franchisor or an associate of the franchisor an amount including, for example: (i) an initial capital investment fee; or (ii) a payment for goods or services; or (iii) a fee based on a percentage of gross or net income whether or not called a royalty or franchise service fee; or (iv) a training fee or training school fee; but excluding: (v) payment for goods and services supplied on a genuine wholesale basis; or (vi) repayment by the franchisee of a loan from the franchisor or an associate of the franchisor; or (vii) payment for goods taken on consignment and supplied on a genuine wholesale basis; or (viii) payment of market value for purchase or lease of real property, fixtures, equipment or supplies needed to start business or to continue business under the franchise agreement. (2) For the purposes of subsection (1), each of the following is taken to be a franchise agreement: (a) the transfer or renewal of a franchise agreement; (b) the extension of the term or the scope of a franchise agreement; (c) a motor vehicle dealership agreement. (3) However, none of the following in itself constitutes a franchise agreement: (a) an employer and employee relationship; (b) a partnership relationship; (c) a landlord and tenant relationship; (d) a mortgagor and mortgagee relationship; (e) a lender and borrower relationship.
This is an opening excerpt, not the complete document.