Frequently Asked Questions
Please click on the question to be directed to the answer.
- Are there any laws to regulate franchising, and if so, what are they?
- Can I franchise an idea?
- Do I need any licences or qualifications to be a franchisor?
- How long should I be in business before franchising?
Are there any laws to regulate franchising, and if so, what are they?
Franchising in Australia has been regulated by the Franchising Code of Conduct since July 1, 1998, which is administered through the Australian Competition and Consumer Commission (ACCC).
The Code provides for a number of franchisee protection mechanisms including:
- Mandatory disclosure of information from the franchisor, including financial details, directors' interests, franchisee list, and litigation information;
- Seven-day cooling-off period after signing the contract;
- Recourse to mediation in the event of a dispute;
- Free association of franchisees;
- And others.
A prospective franchisee should read the Code prior to buying a franchise in order to understand their rights.
No. Any franchise must be derived from a tried and tested business formula that has traded through a number of seasons under different conditions, and preferably in more than one location.
Ideas are unproven, untested, and are not tangible until they are embodied in some form (trademark, patent, copyright, business format, etc).
Do I need any licences or qualifications to be a franchisor?
Businesses do not need a special licence or registration to commence franchising in Australia , however they will need all the normal business permits required for the conduct of their general type of business, and must comply with the Franchising Code of Conduct.
The Code is administered by the Australian Competition and Consumer Commission (ACCC), which has powers to investigate complaints against franchisors made by consumers or franchisees.
How long should I be in business before franchising?
If you are planning to franchise your business, you will need to prove that it can survive different trading conditions over time.
If franchising is planned as a long-term objective of the business, this allows sufficient time to develop the systems and support mechanisms that will be required to develop and maintain a franchise network.
For more information on franchising your business please feel free to contact us for a no obligation meeting to discuss the points of your business in more detail.