The franchise business model is complex and regulated by the Franchising Code of Conduct (Code). Establishing a franchise business is not straight forward and therefore requires extensive planning and expert knowledge across various areas of law, including the Australian Consumer Law, commercial and corporate law, property law, employment law, and intellectual property. The Code prescribes specific documents that a Franchisor must provide to potential and current Franchisees, including a Franchise Agreement and Disclosure Document.
Franchise Agreement – is a binding contract between the Franchisor and the Franchisee outlining the rights and responsibilities of the parties. The Code requires the Franchise Agreement to include certain terms, such as a cooling off period, marketing fund information, fee structure, business transfer mechanism, mandatory dispute resolution mechanism and specific termination rights.
Disclosure document – the Code requires a Franchisor to provide all potential (and current Franchisees) with a disclosure document in a prescribed form containing valuable information about the Franchisor and its systems (eg Franchisor details and experience, litigation, existing Franchisees, intellectual property, site and territory, goods and services, fees, earnings projections and financials of the Franchisor).
Preparing and filing of an Australian trade mark application (in one class only) – a registered trade mark provides a Franchisor with the exclusive right to use the registered trade mark for the franchised business, including the right to licence Franchisees to use the registered trade mark.
Franchising mentoring provided by Complete QA – to help new Franchisors understand their obligations under the Code as well as providing basic advice regarding establishing systems and processes for a franchised business. Complete QA’s introductory mentoring package comprises the following: