60Franchisor may require only certain significant capital expenditure

60 Franchisor may require only certain significant capital expenditure

(1) A franchisor must not require a franchisee to undertake significant capital expenditure in relation to a franchised business during the term of the franchise agreement, other than as permitted by subsection (2).

Civil penalty: 600 penalty units.

(2) For the purposes of subsection (1), the significant capital expenditure that the franchisor may require the franchisee to undertake is the following: (a) significant capital expenditure disclosed to the franchisee in a disclosure document as mentioned in subsection 20(4), if the disclosure document was given to the franchisee before the most recent of the following that is applicable: (i) entry into the agreement; (ii) renewal of the agreement; (iii) extension of the term of the agreement; (iv) extension of the scope of the agreement; (b) significant capital expenditure that is to be incurred by all or a majority of franchisees and is approved by a majority of those franchisees; (c) significant capital expenditure incurred by the franchisee to comply with legislative obligations; (d) significant capital expenditure agreed by the franchisee.