65Franchisor not to require franchisee to pay franchisor’s legal costs relating to franchise agreement

65 Franchisor not to require franchisee to pay franchisor’s legal costs relating to franchise agreement

(1) A franchisor or an associate of the franchisor must not require a franchisee to pay all or part of the franchisor’s costs of legal services relating to preparing, negotiating or executing a franchise agreement or documents relating to the agreement, other than as permitted under subsection (2).

Civil penalty: 600 penalty units.

(2) The franchisor may require the franchisee to make a payment, before the franchisee starts the franchised business, of a fixed amount of dollars that: (a) is specified in the franchise agreement; and (b) is stated in the agreement as being for the franchisor’s costs of legal services relating to preparing, negotiating or executing the agreement; and (c) does not exceed the reasonable and genuine costs of the services mentioned in paragraph (b); and (d) is stated in the agreement not to include any amount for the franchisor’s costs of legal services that will or may be provided, after the agreement is entered into, in relation to preparing, negotiating or executing other documents.