Civil penalty
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.