Agreements & law

Consideration period

The consideration period is the mandatory minimum of 14 days that must pass after a prospective franchisee receives the disclosure document, a copy of the Franchising Code and the agreement in the form it will be signed, before the franchisor can sign the agreement.

What it means

The consideration period exists so that a prospect has real time to read the documents, take advice and make an unpressured decision. It runs before signing, which distinguishes it from the cooling-off period that runs after signing. Under the Franchising Code the franchisor must provide the full disclosure package first, and the 14 days count from that point.

During the consideration period the franchisor cannot sign the agreement, and any payment the prospective franchisee makes in that time must be refunded within 14 days if they ask in writing. If the franchisor changes the agreement or gives new earnings information, the 14 days restart. Minor changes do not restart the clock: changes the buyer asked for, filling in particulars, updated addresses or circumstances, minor clarifications and fixing errors.

The consideration period works together with other Code protections: the ACCC's information statement, which must come first, and the signed statements confirming the franchisee received and understood the disclosure document and had the chance to get independent legal, business and accounting advice. Together these are designed to slow the process down at the most important moment.

In practice

Use the full 14 days rather than rushing. Read the disclosure document against the agreement, list your questions, and get a franchise-experienced lawyer and accountant to review the deal. Speak to current and former franchisees while the clock runs.

If the franchisor sends a revised agreement, for example changing fees, territory or term, check whether the material change restarts the 14 days. Do not let a deadline or a 'this offer expires' message pressure you into signing before you are ready; the period is a legal minimum in your favour.

A real example

A prospective fitness franchisee is given the disclosure document, a copy of the Code and the agreement on 3 June. The franchisor cannot sign with them until at least 17 June, and a deposit paid on 5 June must be refunded within 14 days if they ask in writing. On 12 June the franchisor increases the royalty in the draft; because that is a change the buyer did not ask for, the 14-day consideration period restarts.

Consideration period, FAQs

How long is the consideration period?

At least 14 days from when you receive the disclosure document, a copy of the Code and the agreement in the form it will be signed. Franchisors can allow longer but not shorter.

How is it different from the cooling-off period?

The consideration period runs before you sign and gives you time to decide. The cooling-off period runs after you sign and lets you withdraw. They are two separate 14-day protections.

Can the franchisor ask for money during the consideration period?

Under the current Code, any payment you make during the 14 days must be refunded within 14 days if you ask in writing, so nothing you pay in that window should lock you in.

Does changing the agreement restart the period?

A material change to the agreement or disclosure documents generally restarts the 14 days so you can consider the new terms.

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