Regulatory changes to the Franchising Code of Conduct will force franchises to be up-front with their franchisees.
The amendments are expected to improve long term industry sustainability by reducing disputes between franchisors and franchisees.
“Prospective franchisees will have greater access to better information before signing on the dotted line,” says Small Business Minister, Fran Bailey. “This will assist people to make the right decisions before investing large sums of their money in a business.”
Under the new regulations franchisors must disclose the names of companies who provide rebates, for goods and services franchisees are required to buy. Also, franchisors now need to supply franchisees with details about the marketing funds they contribute to.
The new mandatory code, governed by the Trade Practices Act and administered by the Australian Competition and Consumer Commission (ACCC), will come into effect on March 1, 2008.
