1. Marketing & Cooperative Funds (“Specific Purpose Funds”)

• You must provide greater transparency on how marketing, technology, or platform upgrade contributions are used. • You need to disclose any benefit you receive from these funds.

• You will gain clearer insight into where your contributions go and how they support the network. • This helps you assess the value you receive for these contributions.

2. Restraints of Trade for Non-Renewal/Extension

• You cannot enforce a restraint of trade if a franchisee wanted to renew/extend and was not in serious breach, but has not been adequately compensated for goodwill. • You risk penalties if you try to enforce such a restraint.

• You receive more protection if you sought renewal or extension in good faith and weren’t at fault. • You may operate a similar business post-term without an unfair restraint of trade.

3. Expansion of Motor Vehicle Dealership Protections

• You must ensure that your franchise agreement covers any service and repair work if it is part of a motor vehicle dealership. • If you only operate standalone service and repair franchises, these special protections may not apply to you.

• You benefit from explicit coverage of service and repair work if your franchise is part of a motor vehicle dealership. • If you run a standalone service/repair business, the general Code rules still apply.

4. Reasonable Opportunity for Investment

• You are obligated to ensure that franchisees can realistically recover the cost of their initial investment during the franchise term. • You may face penalties if your required capital outlay cannot be feasibly recouped.

• You now have the right to a more realistic chance of recouping your investment within the term. • You gain additional protection against taking on excessive start-up costs with little return.

5. Compensation for Early Termination

• You must compensate franchisees if you close the network, leave Australia, or change your distribution model. • You should include provisions for lost profits, wasted capital, winding-up costs, and lost goodwill in your agreements.

• You are entitled to compensation if the agreement ends early for reasons beyond your control (e.g., franchisor leaving Australia). • You gain clearer guidelines on how compensation is calculated.

6. Reasonable Legal Costs

• You cannot charge unreasonably high or disingenuous fixed legal fees for preparing, negotiating, or executing the agreement. • You risk penalties if your fees are deemed excessive or unfair.

• You may question and challenge unreasonably high legal costs. • This ensures more equitable cost-sharing during contract formation.

7. Updated Disclosure Requirements

• You must merge the Key Facts Sheet content into the Disclosure Document, eliminating duplication. • You must provide updated solvency statements or financial reports if they are created before signing, unless the franchisee opts out of receiving them.

• You will have fewer documents to review, although the Disclosure Document will contain more detail. • You gain a clearer view of the franchisor’s financial position if new reports are produced.

8. Removal of Key Facts Sheet

• You reduce compliance burdens by no longer producing a separate Key Facts Sheet. • You must still incorporate the unique disclosures previously in that sheet into your Disclosure Document.

• You have one less document to read, but the Disclosure Document will be expanded with key information. • You can still rely on the main Disclosure Document for critical details (e.g., competing interests).

9. Notification of Non-Renewal

• You are now required to explicitly notify franchisees if you decide not to renew or extend.

• You gain earlier, clearer notification when your agreement is not being renewed, helping you plan ahead.

10. Opt-Out of Disclosure for Renewals/Transfers

• You can streamline the renewal process if an existing franchisee opts out of full disclosure. • You must still provide a new Disclosure Document if the franchisee requests it.

• You can choose to skip the 14-day cooling-off and the new Disclosure Document to speed up renewals or transfers. • You can request a Disclosure Document later (once every 12 months) if you wish.

11. Restriction on Franchisor Signing During Consideration Period

• You cannot sign the franchise agreement within the 14-day consideration period. • You face penalties if you breach this rule.

• You have a guaranteed 14-day window to review your documents thoroughly before signing. • You gain clarity about when the agreement officially starts.

12. Provision of Updated Financial Documents

• You must provide any new financial statements if they become available before signing. • You must be prepared to furnish an updated disclosure document unless the franchisee opts out.

• You can access the franchisor’s latest financial information, helping you make a more informed decision.

13. Disclosure of Fair Work Proceedings

• You must disclose any breaches or judgments under Fair Work legislation.

• You have better transparency regarding the franchisor’s compliance with workplace laws.

14. Changes to 7-Day Termination Provisions

• You can terminate with seven days’ notice under a broader set of circumstances (e.g., certain Fair Work or migration law offences confirmed by a court). • You still face urgent ADR requests for terminations based on subjective grounds (e.g., abandonment).

• You can dispute certain 7-day terminations if they are based on a subjective opinion (e.g., alleged abandonment, fraud). • You cannot delay “objective” terminations already decided by external authorities.

15. Partial Removal of Urgent ADR

• You do not need to proceed with urgent ADR if the termination is based on an objective event confirmed by a court or regulatory body (e.g., insolvency, certain convictions).

• You have limited recourse to urgent ADR if your termination is due to these objective events. • You can still challenge other terminations deemed subjective or unfair.

16. Expanded ASBFEO Powers & Penalties

• You can be publicly named if you fail to meaningfully engage in ADR or improperly withdraw. • You must comply with ADR in good faith to avoid penalties.

• You have more leverage in dispute resolution because the franchisor risks being publicly named. • Your ADR outcomes remain confidential, but the franchisor’s refusal to participate may be made public.

17. Commencement & Application

• The changes are set to begin on 1 April 2025, but may be delayed. • It’s unclear whether they will affect existing agreements or only new ones made after 1 April 2025.

• You need to confirm which changes apply to your existing agreement. • If you plan to sign or renew after 1 April 2025, be aware of these new rules and protections.