Franchising Code Compliance: How to Keep Your Disclosure Obligations in Check Year-Round

Bane Legal Services is not a law firm and does not provide legal advice. We are your trusted legal matchmaker — helping business owners connect with the right commercial lawyer, backed by over 30 years of real-world business experience.

I have a client who likes to shortcut everything. He’s a good guy, but he doesn’t believe in doing things in any manner but his own. His theme song would be “I did it My Way!”

That’s all well and dandy with things entrepreneurial. But as a wise - and some would say jaded - former boss drummed into me; You can’t fight city hall.

The Franchising Code of Conduct and its enforcer, the ACCC, represents city hall in the case of my wayward client.

No amount of education, explaining or cajoling will get him NOT to short cut. Yet.

The moment he gets rapped over the knuckles for non-compliance is when he’ll finally realise he needs to comply.

His aversion to paying lawyers and service providers trying to help him is well known. He finds it all too … complicated.

If only he could do it his way, he’d make more money and have less in legal and consulting bills.

The disclosure process is his latest bugbear. It doesn’t fit into his modus operandi, so he tries to ignore the mandated requirements and deadlines.

If you’re a franchisor, you already know the annual disclosure document update can feel like a looming deadline — but that’s just part of the picture. The Franchising Code of Conduct also requires you to proactively notify franchisees about important changes throughout the year.

Managing these obligations well isn’t just about compliance. It’s also about protecting your brand, strengthening franchisee trust, and staying ahead of potential disputes. Let’s break it down.

Let’s break it down, if not for my client, at least for the mostly compliant of my readership.

 

The Two Sides of Disclosure Obligations

Under the Competition and Consumer (Industry Codes—Franchising) Regulations 2024, franchisors must:

1. Respond to annual disclosure document requests from franchisees.

2. Proactively notify franchisees of “material changes” to the business, often within 14 days.

Both requirements are designed to keep franchisees informed — and both can be turned into opportunities to reinforce confidence in your system.

Part 1: Updating Your Disclosure Document

Use the Current Template

The Code was updated in April 2025, introducing new requirements around dispute disclosures, supplier rebates, and marketing fund reporting. If you’re working off last year’s document, you may already be out of date.

Check All Facts and Figures

• Franchisee details (Item 6): List all current and former franchisees from the last three financial years.

• Fees and expenses (Item 14): Clearly outline upfront and ongoing fees, and how they’re calculated.

• Intellectual property (Item 8): Verify trademarks with the IP Australia register to ensure they’re current and registered in the franchisor entity’s name.

Update Financial Year References

Every reference must match the most recent completed financial year — including performance data, franchisee counts, and marketing fund figures.

Start Financial Preparations Early

If you include performance data, ensure it’s supported by proper records. Directors’ statements and solvency declarations can take time to prepare, so don’t leave it to the last minute.

Marketing Fund Compliance

If you operate a marketing or specific purpose fund:

• Provide a detailed statement of expenditure.

• Audit the fund unless 75% of franchisees agree otherwise.

• Remember, the ACCC actively monitors this area.

Pro Tip: Even if no franchisee has requested your disclosure document yet, update it straight after each financial year-end so you can respond quickly and consistently across your network.

Part 2: Proactive Material Change Notifications

Under Section 34 of the Code, you must notify franchisees about certain developments without waiting for them to ask. These can include:

Legal & Financial Developments:

• Legal action alleging breaches of the franchise agreement or competition law.

• Criminal charges involving dishonesty.

• Significant unsatisfied judgments — $100k+ for small proprietary companies, $1m+ for larger entities.

• Collective legal action from 10% of the network or 10 franchisees, whichever is lower.

Structural & Operational Changes:

• Changes in majority ownership or control.

• Significant intellectual property changes affecting brand usage or licensing.

Insolvency & Financial Distress:

• Appointment of administrators, controllers, or liquidators.

• Restructuring or winding up.

Tip: Notify franchisees directly before making public announcements (unless regulations require otherwise). This shows respect for your network and helps manage the flow of information.

Making Compliance Easier

1. Set Up a Monitoring Process

• Hold monthly reviews with legal, finance, and operations teams to identify potential disclosure triggers early.

• Keep written records of why you did or didn’t disclose certain events.

2. Standardise Communications

• Use templates for different disclosure events to ensure consistency in tone and detail.

3. Plan for Sensitive Scenarios

• Have a crisis communication plan for events like legal disputes or financial distress.

• Engage a practical franchise lawyer early to ensure both compliance and brand protection.

Where Bane Legal Services Fits In

At Bane Legal Services, we don’t draft your disclosure document — but we make sure you’re talking to a practical franchising lawyer who can.

We connect you with legal services providers who can:

• Update your disclosure documents in line with the latest Code changes.

• Set up compliance systems for both annual and mid-year disclosure obligations.

• Advise on communication protocols for sensitive changes.

Our role is to save you time, reduce your risk, and match you with a legal partner who understands franchising inside out. And let's face it, most lawyers say they know franchising - but honestly, how many really do?

Disclaimer: This blog is for general information only and is not legal advice. Your circumstances may differ, and you should seek professional legal advice before taking any action.