The Franchising Code of Conduct

The rulebook your franchisor has to follow

The Franchising Code of Conduct sits over every franchise agreement in Australia, and your franchisor cannot contract out of it. It exists to protect you rather than the brand, and it hands you rights most franchisees never use: windows before you sign, refund rights, a duty of good faith, and a dispute pathway your franchisor cannot skip. Underneath all of that your agreement is still one of the ordinary commercial contracts, so the clauses on term, territory, renewal and restraint bind you exactly as they are written.

One catch decides everything: which version of the Code you are on. Agreements entered into, renewed, extended or transferred on or after 1 April 2025 run on the new Code. Sign earlier with nothing changed since, and the old rules still govern you until a renewal, extension or transfer tips you across. Several of the strongest rights, including compensation for early termination, exist only on the new side of that line. Before you argue with a franchisor about anything, know which side you are standing on. We can tell you from the dates on your agreement, on a free call to 1800 130 120.

What the Code gives you before you sign

The franchisor must give you the disclosure document, the proposed franchise agreement and a copy of the Code, and then wait: the agreement cannot be executed until 14 days have passed. Any money you pay during that period is refundable, and once you ask in writing the franchisor has 14 days to repay it.

The disclosure document is where franchisors get caught. It must cover their litigation history, including workplace claims, give you contact details for current and former franchisees, and admit whether you could face competition the franchisor does not control. For newer agreements it must also warn you about any significant capital spend you will be forced to make, with the amount, timing, rationale and risks. This one document now carries the whole due diligence load, and the gaps in it are often the seed of the later claim.

The Code gives you the documents, but nobody is going to read them for you. Fourteen days is enough time for a lawyer to go through the disclosure document and the agreement, and for you to ring three franchisees off the disclosure list. It is not much time to spare on deciding whether to bother.

After signing, you get a 14-day cooling-off period to walk away from a new agreement. Repeat franchisees taking a same-or-substantially-similar agreement can opt out of disclosure and cooling-off, an option worth taking advice on before you give it up.

What the Code gives you while you trade

Both parties owe a duty of good faith across the whole relationship, from negotiation through to termination. Marketing and cooperative funds, along with IT and conference funds, are regulated as specific purpose funds: the administrator must produce annual financial statements, have them audited unless the franchisees vote it down, and disclose how much of the fund goes on administration.

For agreements entered into, renewed or transferred from 1 November 2025, two new protections apply. The agreement must give you a reasonable opportunity to make a return on the investment the franchisor requires of you during the term. And it must provide for compensation if the franchise is terminated early in circumstances such as the franchisor withdrawing from the Australian market. The new Code also stops franchisors using restraint of trade clauses to lock you out of your own trade in certain circumstances, including where you tried to renew and were knocked back.

When the relationship fails, the Code sets the pathway: a written notice of dispute, 21 days of direct negotiation, then mediation or conciliation through the Australian Small Business and Family Enterprise Ombudsman. We cover the pressure points on our franchise disputes page, including the 7-day termination rule for serious breaches. The mediation itself runs like any other commercial one, and the preparation that decides dispute resolution in a boardroom fight decides it here too.

What a breach of the Code is worth to you

Nearly every obligation your franchisor owes you carries a fine that can run to more than $200,000 per breach, and the ACCC enforces it. Those fines punish the franchisor; they do not compensate you. Your money comes back through a damages claim under the contract or the Australian Consumer Law, which is the claim we build while the ACCC angle adds pressure. A franchisor staring at both tends to negotiate.

What this means for you

If you are about to sign, spend the 14 days on a proper review rather than a skim. If you are already trading and something feels off, check the conduct against the Code before you accept the franchisor’s version of the rules. Franchisors reading this should assume their agreement templates and disclosure documents need updating for the new Code if nobody has touched them in the last two years. Whichever chair you sit in, call 1800 130 120 or use the form on this page, and start with our franchise lawyers page for the full picture of how we run these matters.