Franchisors will now be required to upload their Disclosure Documents to an online Franchise Disclosure Register (Register) which will be accessible by the public, at no cost. The Register will be hosted and administered by Treasury.
The establishment of the Register follows extensive amendments to the Franchising Code of Conduct (Code) earlier this year. Those changes include doubling financial penalties for breaches of the Code, the introduction of new $10 million fines and increasing the cooling-off period from 7 to 14 days.
Most information proposed for inclusion on the Register is within the existing scope of disclosure, however there will be some limited new information requirements. There will also be information which Franchisors are required or allowed to redact from Disclosure Documents, including personal information (as defined by the Privacy Act 1988 (Cth)), information about individual Franchisees or franchise sites and sensitive quantitative information about Franchisor rebates.
The Guide and Exposure Draft of Regulations recently released by the Federal Government can be accessed via this link: https://treasury.gov.au/sites/default/files/2021-09/c2021-210402_supporting-guide.pdf.
From 31 March 2022, Franchisors can voluntarily create a profile and publish their existing Disclosure Document to the Register.
By 31 October 2022, all Franchisors must create a profile and publish their latest Disclosure Document. It must then be updated annually to the Register within 4 months after the end of the financial year.
Pecuniary penalties will apply for breaches of key obligations to publish documents to the Register but the exact quantum of those fines remain unclear.
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