Details have recently been released on the Franchise Disclosure Register (the Register) which was announced as part of the Federal Government’s 2021-22 Budget. So to help ensure your business is ready, here’s an overview of what you need to know:
What is the Franchise Disclosure Register?
Due diligence is a critical process for anyone considering buying a franchise. The Register is intended to assist with this by providing potential franchisees with the key information they need to make an informed decision before they enter into a franchise agreement. It builds on the reforms to the Franchising Code of Conduct which came into force on 1 July, 2021.
The key features of the Register includes granting prospective franchisees the ability to search the publicly accessible data for information relating to various franchise systems, which (in theory) will motivate high quality disclosure practices and enhancing the franchising industry’s reputation through open publication.
How will it work?
Franchisors will be required to upload their disclosure documents and any other supporting documents to the online Register. These documents will be publicly-accessible however, certain parts can be redacted – such as commercially sensitive information about supplier rebates and franchisee and former franchisee personal information.
Who will be responsible for the Register?
At present this is still up for debate however, the proposal at present suggests that the Register will be hosted and administered by the Treasury. The onus will be on franchisors to ensure that their documents are accurate and correctly reflect their systems and operations.
When will it be ready?
The Register is expected to be up and running from 31 March, 2022. It will be voluntary during the initial rollout with all franchisors expected to be on board by 31 October, 2022.
If you have any questions or concerns, please contact Baybridge Lawyers.