Schedule 1 of the Franchising Code
What it means
The Franchising Code is the law that governs franchising in Australia; Schedule 1 is the annexure that dictates the format and required contents of the disclosure document. It lists the categories a franchisor must disclose, from setup and operating costs to supplier arrangements, current and former franchisee details, litigation history and financial position.
Because Schedule 1 standardises what must be disclosed, it is the reason you can compare franchises on a like-for-like basis, every compliant disclosure document covers the same ground.
In practice
When you read a disclosure document, you are effectively reading a franchisor's answers to Schedule 1. If a section required by Schedule 1 is missing or vague, that is a red flag worth raising with your franchise lawyer.
A real example
James's lawyer works through the disclosure document against Schedule 1 and notices the former-franchisee section is thin. She asks the franchisor for the full three-year history of transfers, closures and terminations that Schedule 1 requires.
Schedule 1 of the Franchising Code, FAQs
What does Schedule 1 require a franchisor to disclose?
Setup and operating costs, fees, supply and rebate arrangements, current and former franchisee contacts, litigation history, the franchisor's solvency and financials, capital expenditure, specific-purpose funds and any earnings information given.
Is earnings information required under Schedule 1?
No, earnings (financial performance) information is optional. But if a franchisor chooses to provide it, Schedule 1 requires it to be accompanied by accuracy statements.
See the full franchise glossary, the Fee Index or our buyer guides.