Are You Ready for the New Franchising Code Rules Starting 1 November 2025?
- Barry Money
- Nov 6, 2025
- 3 min read
Published: 25 October 2025
Category: Franchising Law Updates
Introduction
If you’re a franchisor in Australia, there’s a major compliance date fast approaching. From 1 November 2025, several key rules under the new Franchising Code of Conduct will come into effect — and the Australian Competition and Consumer Commission (ACCC) has released updated guidance to help franchisors prepare.
These changes are not just administrative. They directly impact how franchise agreements are drafted, how franchisee investments are managed, and the level of disclosure franchisors must provide. Failing to comply could expose your business to significant penalties or enforcement action.
At Bane Legal Services, we’re not a law firm and we don’t offer legal advice. But we do have over 30 years of experience helping business owners connect with the right commercial and franchising lawyers — professionals who can guide you through these new obligations with confidence.
Key Code Changes Taking Effect from 1 November 2025
The ACCC’s latest guidance highlights several new obligations that franchisors must understand and implement. Here’s a summary of the most important updates:
1. Compensation Clauses for Early Termination
In certain situations, franchise agreements must now include clear clauses that provide for compensation if the agreement ends early. This ensures franchisees are treated fairly when a franchisor decides to terminate before the contract’s natural expiry.
2. Fair Opportunity for Franchisee Returns
Franchisors must give franchisees a reasonable opportunity to make a return on their investment. This goes beyond disclosure — it’s about ensuring the business model offers realistic earning potential.
3. Transparency Around Specific Purpose Funds
If franchisees are required to contribute to a specific purpose fund (such as a marketing or renovation fund), franchisors now face additional disclosure obligations. They must clearly explain how these funds will be used.
4. Capital Expenditure Disclosure
Franchisors must disclose any significant capital expenditure that franchisees may be required to incur. This disclosure must appear in the franchisor’s disclosure document and be discussed directly with prospective franchisees before any agreement is signed.
5. Limits on Restraint of Trade Clauses
New limits on post-term restraint of trade clauses mean franchisors cannot automatically restrict a former franchisee’s ability to operate a similar business after their agreement ends — except in limited circumstances.
6. Opting Out of Cooling-Off Periods
In very specific situations, franchisees entering into an agreement may choose to opt out of the cooling-off period. This new flexibility may suit experienced franchisees or multi-unit operators, but it should be approached carefully with proper legal advice.
Why This Matters
The ACCC has made it clear: franchisors who fail to comply with the new code risk court penalties or infringement notices. The regulator actively investigates alleged breaches and takes enforcement action where appropriate.
These changes reflect the government’s broader push toward fairer and more transparent franchising practices, ensuring that franchisees are fully informed and protected when making significant business investments.
Need Help Understanding Your Obligations?
If you’re unsure whether your franchise documentation or disclosure process complies with the new Franchising Code, it’s crucial to seek professional legal guidance.
At Bane Legal Services, we’ll connect you with an experienced franchising lawyer who understands both the commercial realities of running a franchise and the legal intricacies of the updated Code.
We’re not a law firm, and we don’t provide legal advice — but we know the franchising landscape inside and out, and we’ll ensure you find the right lawyer to protect your business interests.
Comments