Agreements & law

Consideration period

The consideration period is the mandatory minimum of 14 days that a franchisor must wait, after giving a prospective franchisee the disclosure document, a copy of the Franchising Code, the Key Facts Sheet and the proposed agreement, before the agreement can be signed or any non-refundable money paid.

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 require the franchisee to sign the agreement or pay a non-refundable amount. If the agreement or the disclosure materials change in a material way during this time, the period generally restarts, giving the prospect a fresh 14 days to consider the amended deal.

The consideration period works together with two other Code protections: the requirement to give a Key Facts Sheet, and the statement the franchisee signs confirming they have 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 and Key Facts Sheet 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, Key Facts Sheet, a copy of the Code and the draft agreement on 3 June. The franchisor cannot have them sign or take a non-refundable deposit until at least 17 June. On 12 June the franchisor increases the royalty in the draft; because that is a material change, the 14-day consideration period restarts.

Consideration period — FAQs

How long is the consideration period?

At least 14 days from when you receive the full disclosure package (disclosure document, a copy of the Code, the Key Facts Sheet and the proposed agreement). 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?

They cannot require a non-refundable payment. A fully refundable deposit may be taken, but nothing that ties you in before the period ends.

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.