12Marketing or other cooperative funds

12 Marketing or other cooperative funds

12.1 For each marketing or other cooperative fund, controlled or administered by or for the franchisor, to which the franchisee may be required to contribute, the following details:

(a) the kinds of persons who contribute to the fund (for example, franchisee, franchisor, outside supplier);

(b) whether the franchisor must contribute to the fund in relation to businesses owned or operated by the franchisor that are substantially the same as the franchised business and, if so, whether the contribution is worked out in the same way as for a franchisee;

(c) how much the franchisee must contribute to the fund and whether other franchisees must contribute at a different rate;

(d) who controls or administers the fund;

(e) whether the fund is audited and, if so, by whom and when;

(f) whether the fund’s financial statements can be inspected by, or will be given to, franchisees;

(g) the kinds of expense for which the fund may be used;

(h) the fund’s expenses for the last financial year, including the percentage spent on production, advertising, administration and other stated expenses;

(i) whether the franchisor or its associates supply goods or services for which the fund pays and, if so, details of the goods or services;

(j) whether the franchisor must spend part of the fund on marketing, advertising or promoting the franchisee’s business.

13 Payments

Prepayments

13.1 If the franchisor requires a payment before the franchise agreement is entered into — why the money is required, how the money is to be applied and who will hold the money.

13.2 The conditions under which a payment will be refunded.

Establishment costs

13.3 Details of the range of costs to start operating the franchised business, based on current practice, for the following matters:

(a) real property, including property type, location and building size;

(b) equipment, fixtures, other fixed assets, construction, remodelling, leasehold improvements and decorating costs;

(c) inventory required to begin operation;

(d) security deposits, utility deposits, business licences, insurance and other prepaid expenses;

(e) additional funds, including working capital, required by the franchisee before operations begin;

(f) other payments by a franchisee to begin operations.

13.4 For item 13.3, the details for each payment must include:

(b) amount of the payment or the formula used to work out the payment; and