Compliance & disputes

Civil penalty

A financial penalty a court can impose on a franchisor for breaching the Franchising Code, sought by the ACCC. It is what gives the Code its enforcement teeth.

What it means

Many obligations in the Franchising Code are backed by civil penalties, court-ordered fines the ACCC can pursue when a franchisor breaches key provisions such as disclosure, good faith or the register rules.

Recent reforms increased the maximum penalties significantly, signalling that Code compliance is not optional. For franchisees, the penalty regime is the enforcement mechanism behind their protections.

In practice

You cannot impose penalties yourself, that is the ACCC's role, but knowing that serious breaches carry civil penalties tells you the Code has real force. Report serious breaches to the ACCC.

A real example

The ACCC takes court action against a franchisor for failing to give proper disclosure, and the court imposes civil penalties, a public signal to the sector that the obligation is enforced.

Civil penalty, FAQs

What is a civil penalty under the Franchising Code?

A court-ordered fine the ACCC can seek when a franchisor breaches key Code provisions, such as disclosure or good faith. Reforms have increased the maximum penalties.

Can a franchisee impose penalties on a franchisor?

No. Civil penalties are pursued by the ACCC through the courts. Franchisees can report serious breaches to the ACCC and pursue their own remedies separately.

See the full franchise glossary, the Fee Index or our buyer guides.