61Payments to and from specific purpose funds

61 Payments to and from specific purpose funds

(1) This section applies if a franchise agreement requires the franchisee to pay money to a specific purpose fund. Payments by franchisors (2) If the franchisor or master franchisor operates one or more units of a franchised business, the franchisor or master franchisor must make payments to the fund on behalf of each of those units on the same basis as franchisees of other units of the franchised business.

Civil penalty: 600 penalty units.

Obligations of fund administrators (3) The fund administrator of the fund must maintain a separate account with a financial institution for payments to the fund.

Civil penalty: 600 penalty units.

(4) Despite any terms of the franchise agreement, the fund administrator must use the fund only to: (a) meet expenses: (i) of a kind that have been disclosed to franchisees in the disclosure document in accordance with paragraph 15(1)(f) of Schedule 1; or (ii) that are legitimate expenses for the specified purpose for the fund; or (iii) that have been agreed to by a majority of franchisees that are required to make payments to the fund; or (b) pay the reasonable costs of administering and auditing the fund.

Civil penalty: 600 penalty units.