As any franchisor will know only too well, the Franchising Code of Conduct requires franchisors to update their Disclosure Document within 4 months of the end of the financial year. For franchisors with a 30 June EOFY, the critical time is approaching, with the deadline looming at the end of October. At the date of this post, that’s only about 5 weeks away.
In my last blog post I mentioned the upcoming introduction of unfair contracts legislation applying to standard form contracts for small businesses. The ACCC has made it pretty clear that they see Franchise Agreements falling within this legislative space and that the franchising sector will be on their enforcement radar.
So, franchisors should definitely also be reviewing their Franchise Agreement for any “unfair contract terms”. I think it’s a good idea to be doing that now, as any changes to the Franchise Agreement might necessitate corresponding changes to the Disclosure Document. That means addressing both the Disclosure Document update and a review of the Franchise Agreement for unfair contract terms together, now. If you’re a franchisor, why not hit both nails on the head at the same time.
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