34Disclosure of materially relevant facts

34 Disclosure of materially relevant facts

Financial details (1) If: (a) either: (i) a statement or declaration referred to in item 21 of Schedule 1 is made; or (ii) a document referred to in that item comes into existence; and (b) the statement or declaration is not reflected in, or the document is not provided together with, a disclosure document that has been updated under section 21 or 33; the franchisor must give a franchisee or a prospective franchisee a copy of the statement, declaration or document: (c) as soon as reasonably practicable; and (d) in relation to a prospective franchisee—before the prospective franchisee enters into a franchise agreement with the franchisor.

Civil penalty:

(a) for a contravention by a body corporate—the amount under section 17; or
(b) for a contravention by a person who is not a body corporate—$500,000.

Other matters (2) If a disclosure document does not mention a matter mentioned in subsection (3), the franchisor must tell a franchisee or prospective franchisee about the matter, in writing, within a reasonable time (but not more than 14 days) after the franchisor becomes aware of it.

Civil penalty:

(a) for a contravention by a body corporate—the amount under section 17; or
(b) for a contravention by a person who is not a body corporate—$500,000.

(3) For the purposes of subsection (2), the matters are the following: (a) change in majority ownership or control of: (i) the franchisor or an associate of the franchisor; or (ii) the franchise system; (b) proceedings by a public agency, a judgment in criminal or civil proceedings or an award in an arbitration against the franchisor, a franchisor director, an associate of the franchisor or a director of an associate of the franchisor, in Australia alleging: (i) breach of a franchise agreement; or (ii) contravention of the Act; or (iii) contravention of the Corporations Act; or (iv) unconscionable conduct; or (v) misconduct; or (vi) an offence of dishonesty; (vii) contravention of subsection 558B(1) or (2) of the Fair Work Act; or (c) civil proceedings in Australia against the franchisor, a franchisor director, an associate of the franchisor or a director of an associate the franchisor, by at least 10%, or 10, of the franchisees in Australia of the franchisor (whichever is the lower); (d) any judgment that is entered against the franchisor or an associate of the franchisor in Australia, and is not discharged within 28 days, for at least: (i) for a small proprietary company (within the meaning of the Corporations Act)—$100,000; or (ii) for any other company—$1,000,000; (e) any judgment that is entered against the franchisor or an associate of the franchisor in a matter mentioned in item 4 of Schedule 1; (f) the franchisor or an associate of the franchisor becoming a Chapter 5 body corporate; (g) a change in the intellectual property, or ownership or control of the intellectual property, that is material to the franchise system; (h) the existence and content of: (i) any undertaking given by the franchisor or an associate of the franchisor under section 87B of the Act; and (ii) any order made by the Federal Court of Australia under that section in relation to such an undertaking. (4) For the purposes of paragraphs (3)(b), (c), (d) and (e), the franchisor must tell the franchisee: (a) the names of the parties to the proceedings; and (b) the name of the court or tribunal; and (c) the case number; and (d) the general nature of the proceedings. (5) For the purposes of paragraph (3)(f), the franchisor must tell the franchisee the name and address of the administrator, controller, liquidator or restructuring practitioner (within the meaning of the Corporations Act).