As a Franchisor, you are aware that the Franchising Code of Conduct (the Code) requires you to update your Disclosure Document at least once a year before the due date.

For most Australian-based Franchisors that date is between 1 July and 31 October. 

Franchisors must issue a current Disclosure Document when recruiting Franchisees. It is crucial that your Disclosure Document meets the necessary requirements and changes BEFORE the deadline which is 31 October 2023.  

What you need to do:

You need to provide:

1. An updated 2022-2023 Disclosure Document with current information regarding your franchise network including updated information relating to all likely costs and expenses that may be incurred by Franchisees, as well as information relating to changes within the franchise network, including any disputes that have occurred.

2. Either financial statements for the last two (2) completed financial years, or alternatively, an audit report from an independent auditor stating that the Franchisor is solvent as of 30 June 2023; 

3. An annual financial statement detailing all of the marketing fund’s receipts and expenses for the last financial year (Marketing Fund Statement).

Additionally, the Code requires Franchisors to:

• Update your listing on the Franchise Disclosure Register by 14 November 2023;
  
  
• Arrange for the Marketing Fund Statement to be audited by a registered company auditor within 4 months after the end of the financial year (between 1 July 2023 and 31 October 2023) to which it relates;
  
  
• Provide their Franchisees a copy of:
  
  
  • The Marketing Fund Statement, within 30 days of preparing it; and
  • A copy of the audited report of the Marketing Fund Statement, within 30 days of preparing the report.

NOTE: You may seek to obtain a waiver of the marketing fund audit (if funds are being collected), provided that a resolution is passed before 30 September 2023!

 

What happens if you don’t? 

Failing to comply with the above may result in getting audited by ACCC and/or being in breach of the Code. 

How Can DC Strategy Lawyers Help?

DC Strategy Lawyers can assist you in all franchise, corporate and commercial legal matters including the following:

1. We can review and update your Disclosure Document;

2. We can re-draft your Disclosure Document to ensure full compliance with the new Code;

3. We can help you obtain the exemption above, save money and boost the goodwill of your franchise; and

4. We can protect your franchise from breaching the Code. 

If you would like to learn more about updating your Disclosure Document or preparing your Marketing Fund Statement, please contact DC Strategy Lawyers. 

Our initial meetings are an investment on our behalf. We take the time to assess your needs and determine an action plan to move forward together.

Talk to us about any Franchising & Commercial Legal matters: 1300 682 657 or book your free consultation below: