MARKET WATCH: Should I Register my Franchise on the Franchise Disclosure Registry? 

Misuse of marketing funds by Retail Food Group.

Should I Register my Franchise on the Franchise Disclosure Registry? 

More information has been released on the much-anticipated Franchise Disclosure Register and on the 1st April 2022 the Franchising Code of Conduct was amended (yet again) to insert a new clause 53, to deal with the Franchise Disclosure Register. Announced as part of the Federal Government’s 2021-22 Budget, the Franchise Disclosure Register aims to assist potential franchisees during the due diligence process, by creating a publicly available source of information, before a franchise agreement is entered into.

The Register builds on extensive reforms to the Franchising Code of Conduct which resulted from the Federal Government’s 2018 Inquiry into the Franchising Code of Conduct.

Will this apply to you?

Generally speaking, you must register if you are a franchisor who had created a disclosure document under clause 8 of the Code and had given a copy of the disclosure document to a franchisee or prospective franchisee under clause 9, or a franchisor that proposes to enter into a franchise agreement with a prospective franchisee.

What information will Franchisor be required to provide for inclusion in the Franchise Disclosure Register?

Franchisors must provide their:
• Name
• Trading name
• Contact details (office address, phone and email)
• ANZSIC division and subdivision codes for the industry in which the franchise operates and which are specified in the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006, published by the Australian Bureau of Statistics.

The information must be provided in the form and manner approved by the Secretary and must be provided on or before the 14th of November 2022. Post the 1st of November 2022, franchisors will be required to provide the required information at least 14 days before the franchisor enter into a franchise agreement with a prospective franchisee.

The Register may only contain documents that are provided by a franchisor including:
1) The disclosure document created and maintained by the franchisor,
2) The key facts sheet created and maintained by the franchisor,
3) The standard form of franchise agreement used by the franchisor.

In the event that the documents contain personal information that relates to an individual other than the franchisor, or information that relates to a particular franchisee or site occupied by a franchisee, a franchisor will be permitted to redact such information prior to providing the document for inclusion on the Register.

What actions do franchisors need to take now?

Franchisors have until the 14th of November 2022, to create a profile on the Franchise Disclosure Registry. We would strongly urge franchisors to use the next few months wisely by:
• Creating a profile for your franchise using your myGovID
• Familiarising yourself with the Franchise Disclosure Register website
• Ensuring that you are authorised to act on behalf of your ABN for interactions with The Department of the Treasury via the myGovID Relationship Authorisation Manager
• Reviewing disclosure documents to ensure that they are up-to-date and meet all legal requirements

What ongoing responsibilities do franchisors have?

The Franchise Disclosure Register will be operated by the Federal Government however, franchisors have a responsibility to upload all relevant information and to ensure that this information is accurate.
Franchisors will be required to update their information annually (at a minimum) by the 14th day of the fifth month after the end of financial year. Failing to update information by this date will be regarded as a breach of the Code and penalties will apply.

When will the Register be ready?

The Register will be live from the 15th of November 2022.

For more information on your obligations regarding the Franchise Disclosure Register, please contact Baybridge Lawyers’ specialist Franchising lawyers.

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