Transitional arrangements

The new Code will apply to all franchise agreements entered into, transferred, renewed or extended on or after 1 April 2025 and, with several exceptions, to all conduct from 1 April 2025.

The old Code continues to apply to franchise agreements in place before 1 April 2025, until they are transferred, renewed or extended.

Obligations delayed until 1 November 2025

Several of the new Code obligations and changes have been delayed until 1 November 2025, although a franchisor could choose to comply with these earlier. These include:

• The extension of the regulation of marketing or other cooperative funds to a wider group of "specific purpose funds"
• New requirements to include a prescribed statement in a fund financial statement about the percentage of fund income spent on costs and to attach the most recent fund financial statement to the disclosure document
• New requirements about return on investment and compensation to franchisees in some (limited) circumstances.

Changes to franchise agreements

All franchise agreements signed on or after 1 April 2025 will need to be checked to ensure consistency with changes to the Code, particularly in relation to termination and post-term non-competes.

References to the key facts sheet need to be deleted, references to Code provisions will need to change and the possibility that a franchisee might have opted out of receiving a cooling-off period or disclosure document may need to be acknowledged.

Changing disclosure documents

Disclosure documents provided to prospective franchisees before 1 April 2025 do not need to be reissued before a franchise agreement is signed, so long as this occurs before 1 November 2025. However, the franchise agreement they sign will need to comply with the new Code and it would be prudent to issue them with a copy of that Code.

Changes to the disclosure document template which commenced on 1 April 2025 are not many or significant. There are a small number of changes and the numbering and Code references need to change throughout.

New step before disclosure

Importantly, from 1 April 2025, no disclosure document can be issued to a prospective franchisee unless any former franchisees who have left the system in the last three years whose personal details are listed in Item 6 of the disclosure document have been given 14 days' notice that the details will be included and have not objected to their inclusion.

Additional information required by the Franchise Disclosure Register

The timing to register with or provide an annual update to the Franchise Disclosure Register has not changed, but from 1 April 2025 two additional questions have been included. These are drawn from the current requirements to include information about past litigation or insolvencies and franchise agreement provisions about arbitration in the disclosure document (items 4.2 and 17A), information which should already be available to the franchisor.

What's next for franchising?

In theory, these should be the last Code changes until at least 2030, although experience suggests that earlier government intervention may occur.

We are already on notice that the government is considering:

• Options for different forms of franchise registration
• Possible new unfair trading laws based on examples in the US and/or EU and an extension to unfair contract terms laws, which would not specifically target franchising but may impact franchise relationships.

We expect further news on these later in 2025.