Disclosure document
What it means
The Franchising Code prescribes the exact form and content of the disclosure document. It must cover the franchisor's business and litigation history, the number of franchised outlets and how many have been terminated, transferred or ceased trading over recent years, all fees and costs, supplier and rebate arrangements, marketing fund details, territory rights, and the conditions for renewal, transfer and termination. It must be updated within four months of the end of each financial year.
The disclosure document is given together with a copy of the Code and the agreement in the form it will be signed, after the ACCC's information statement. The franchisor cannot sign the agreement until at least 14 days after the prospective franchisee receives them (the consideration period), and any payment made in that window must be refunded within 14 days of a written request. If the disclosure document is materially deficient or misleading, that can be a breach of the Code and of the franchisor's good-faith and consumer-law obligations.
From 1 April 2025 franchisors must also lodge key information on the public Franchise Disclosure Register, and additional matters such as relevant convictions, insolvency events and whether the agreement contains arbitration or restraint clauses must be disclosed. Failure to disclose materially relevant facts is one of the most serious Code breaches and can attract the highest tier of civil penalties.
In practice
A franchisee should treat the disclosure document as the primary due-diligence tool. The Item on outlet numbers and churn (Item 6, the network history) shows how many franchisees have left the system and why, which is often more revealing than the marketing. Contact details for current and former franchisees are included so prospective buyers can seek independent validation.
Because the document is dense, it is standard practice to have a franchise-experienced lawyer and accountant review it and cross-check it against the franchise agreement and any earnings information. A prospective franchisee can request an updated disclosure document, and in a renewal or transfer they are generally entitled to a current copy unless they have already received one in the past 12 months or validly opt out.
A real example
Before buying a fitness franchise, a prospective franchisee receives a 60-page disclosure document. Reviewing Item 6, they see that of 40 outlets, 9 closed or were terminated in the past three years. They phone five former franchisees listed in the document, learn that a nearby corporate gym had hurt sales, and use that to reassess their territory choice before the 14-day consideration period ends.
Disclosure document, FAQs
How long before signing must I receive the disclosure document?
At least 14 days before the franchisor can sign the agreement with you. This is the consideration period, and it also applies to renewals and extensions. On a transfer, the franchisor cannot consent until 14 days after the buyer receives the documents. A repeat franchisee taking a substantially identical agreement can opt out in writing of receiving a fresh disclosure document.
How current is the information?
The disclosure document must be updated within four months after the end of each financial year, so ask for the latest version and check the date it was prepared.
Is there still a Key Facts Sheet alongside the disclosure document?
No. The Key Facts Sheet was abolished when the current Code commenced on 1 April 2025. The disclosure document is the full disclosure; the Franchise Disclosure Register shows standard summary fields you can use to compare systems.
What if the disclosure document is wrong or misleading?
Providing false or misleading disclosure, or failing to disclose materially relevant facts, breaches the Code and consumer law and can attract significant penalties and ACCC action.
See the full franchise glossary, the Fee Index or our buyer guides.