31Financial statements for specific purpose funds

31 Financial statements for specific purpose funds

(1) This section applies if a franchise agreement requires the franchisee to pay money to a specific purpose fund. (2) The fund administrator of the fund must: (a) within 4 months after the end of a financial year, prepare an annual financial statement for the fund for the financial year that complies with subsection (3); and (b) give the franchisee a copy of the financial statement within 30 days of preparing it; and (c) unless subsection (4) applies in respect of the fund for the financial year: (i) within 4 months after the end of the financial year, have the statement audited by a registered company auditor; and (ii) give the franchisee a copy of the auditor’s report within 30 days of receiving it.

Civil penalty: 600 penalty units.

(3) For the purposes of paragraph (2)(a), the statement must detail all of the fund’s receipts and expenses, including: (a) sufficient detail of the fund’s receipts and expenses to give meaningful information about: (i) sources of income; and (ii) items of expenditure, particularly with respect to the specified common purpose; and (b) the percentage of the total income spent on each of the following: (i) the expenses mentioned in paragraph 61(4)(a); (ii) the costs mentioned in paragraph 61(4)(b). (4) This subsection applies in respect of a specific purpose fund for a financial year if, within 3 months after the end of the financial year, 75% of the franchisees (whether franchisees or subfranchisees of the franchisor or master franchisor) in Australia who paid money to the fund in the financial year vote to agree that the fund administrator does not have to do the things mentioned in paragraph (2)(c) in respect of the fund for the financial year.