New Financial Year: What Do Franchisors Need to Do?
E-Alert: 10 July 2017
With the start of the new financial year already here, do not forget to attend to your Franchising Code requirements.
|
Subject |
Due Date | Action | Comments |
|
1. Annual financial statement of the marketing fund (AFS) |
By 31 October 2017
|
Prepare an AFS, detailing all the fund’s receipts and expenses for the financial year ending 30 June 2017 |
The AFS must include sufficient details of the fund’s receipts and expenses so as to give meaningful information about: a) sources of income; and b) items of advertising and marketing expenditure You must provide to your franchisees a copy of: a) the AFS within 30 days of preparing it; and b) if applicable, the auditor’s report of the AFS within 30 days of preparing it A fine of over $45,000 can be imposed for non-compliance TIP: You must prepare the AFS first and present this to the franchisee when vote given (see item 2) |
|
2. Franchisee vote |
By 30 September 2017 | Conduct franchisee vote whether to audit the AFS |
A fine of over $45,000 can be imposed for non-compliance |
|
3. Audit report |
By 31 October 2017 | Audit of the AFS |
The auditor’s report is not required if 75% of franchisees vote against obtaining it |
|
4. Disclosure document |
By 31 October 2017 | Update current disclosure document |
A fine of over $45,000 can be imposed for non-compliance |
| 5. Financial reports (or independent audit) | By 31 October 2017 | Prepare financial reports for the last 2 financial years ending 2016 and 2017 (to be annexed to the updated disclosure document) | TIP: Financial reports need not be annexed if a statement as to the franchisor’s solvency is supported by an independent audit provided by a registered company auditor within 4 months after the end of the financial year to which it relates.The audit must be annexed to that statement and both included in the updated disclosure document |
Questions?
If you have any questions about this article or would like us to assist you, please do not hesitate to contact:
| Georgie Jensz, Principal |
| (03) 9529 4714 |
| georgie.jensz@kubedlegal.com.au |
The content of this article is intended to provide a general overview of the subject matter and is not to be relied upon as giving legal advice. Specialist advice should be sought about your specific circumstances.
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