5Application

5 Application

(1) This code applies to a franchise agreement entered into on or after 1 October 1998.

(1A) An amendment of this code that commences on or after 1 March 2008 applies to a franchise agreement entered into on or after the date on which the amendment commences.

(1B) An amendment of this code that commences on or after 1 July 2010 applies to a franchise agreement entered into on or after the date on which the amendment commences.

(2) For the parties to a franchise agreement entered into before 1 October 1998:

(a) clauses 14 (Copy of lease), 15 (Association of franchisees) and 17 (Marketing and other cooperative funds) apply to the parties on and after 1 July 1998; and

(b) the rest of this code applies to the parties on and after 1 October 1998.

(3) However, this code does not apply to a franchise agreement:

(a) to which another mandatory industry code, prescribed under section 51AE of the Act, applies; or

(b) if:

(i) the franchise agreement is for goods or services that are substantially the same as those supplied by the franchisee before entering into the franchise agreement; and

(ii) the franchisee has supplied those goods or services for at least 2 years immediately before entering into the franchise agreement; and

(iii) sales under the franchise are likely to provide no more than 20% of the franchisee’s gross turnover for goods or services of that kind for the first year of the franchise.

(4) Paragraph (3) (b) ceases to apply to a franchise agreement if:

(a) sales under the franchise provide more than 20% of the franchisee’s gross turnover for the goods or services for 3 consecutive years; and

(b) the franchisee tells the franchisor that paragraph (a) applies.

Part 2 Disclosure

Division 2.1 Disclosure document

6 Franchisor must maintain a disclosure document

(1) A franchisor must, before entering into a franchise agreement, and within 4 months after the end of each financial year after entering into a franchise agreement, create a document (a disclosure document) for the franchise in accordance with this Division.

(2) A disclosure document:

(a) must be:

(i) if the franchised business has an expected annual turnover at any time during the term of the franchise agreement of $50 000 or more — in accordance with Annexure 1; or

(ii) if the franchised business has an expected annual turnover of less than $50 000 — in accordance with Annexure 1 or 2; and

(b) may include additional information under the heading ‘Other relevant disclosure information’; and