Revised Franchising Code of Conduct

It has now been 6 months since the introduction of the new Franchising Code of Conduct. 

As franchisors should now be aware, the majority of the changes to the Code affect franchisors, such as:

*   the inclusion of new rules regarding the management and use of marketing funds;

*   limitations on restraining franchisees’ business activities at the end of the franchise;

*   limitations on imposing significant capital expenditure requirements on franchisees; and

*   a new penalty regime for infringements. 

The new Code also introduced a new form of Disclosure Document and an additional requirement to provide an Information Statement to prospective franchisees.  Both franchisors and franchisees are also subject to the newly introduced obligation to act in good faith in relation to matters arising in relation to the franchise arrangement.

We can advise and assist both franchisors and franchisees with their obligations under and compliance with the new Code.