Item 6 network history

What it means

Item 6 is where a franchisor must lay out the state and recent history of its network. It lists current franchisees with their locations and, importantly, records key events, the franchised businesses that were opened, transferred, terminated, not renewed or that otherwise ceased, over the last few completed financial years.

For each of those exits and transfers, the franchisor must generally provide the name, location and contact details of the franchisees involved, so a prospective buyer can approach them directly. This makes Item 6 one of the most powerful due-diligence tools in the whole disclosure document.

Recent changes to the Code strengthened the privacy side of this. From 2025, former franchisees whose personal details would appear in Item 6 must be given at least 14 days' notice and can object to their details being included, so some contacts may be withheld at the individual's request.

In practice

Item 6 lets you turn network statistics into real conversations. Rather than relying on the franchisor's summary, you can count openings against closures and transfers over the disclosed years to gauge churn, then call the people behind the numbers.

Treat gaps thoughtfully. If many former franchisees have opted out of having their details listed, that is their right under the Code, but a network where a large share of recent exits are unreachable is worth probing further through the franchisees you can contact.

A real example

In a franchisor's Item 6, a prospective buyer sees that over three financial years the network opened 30 outlets, transferred 22 and had 15 close or be terminated, with contact details for most of the departed operators. She rings several of them and learns why they left before deciding whether to sign.

Item 6 network history — FAQs