Franchise supplier rebates: what the disclosure document must reveal

• The rule sits in item 10(1)(j) to (m) of the current Code, the Competition and Consumer (Industry Codes, Franchising) Regulations 2024, in force since 1 April 2025. The 2014 Code had similar items, strengthened in July 2021.
• The percentage is measured against total group purchases from each supplier, leaving out purchases by units the franchisor, a master franchisor or an associate operates.
• There are two carve-outs from the percentage only: franchisees can buy from other sources without approval, or the whole rebate goes back to franchisees through a specific purpose fund (item 10(3)).
• Item 10 also covers supply restrictions, such as stock minimums, approved suppliers, supplier ownership and return rights.
• FranchiseScope's analysis of Franchise Disclosure Register profiles captured on 19 August 2026 found 70.2% (809 of 1,152 answering) say franchisees face restrictions on where they buy. The answers are self-reported by franchisors.

Before it reaches rebates, item 10(1) asks how the franchisor controls what franchisees buy. Each answer needs real detail, not labels.

1. Stock and purchase minimums: any requirement to hold a level of inventory or buy a set amount of goods or services (item 10(1)(a)).
2. Restrictions on buying from other sources, such as approved-supplier rules for stock, equipment, fit-out, IT services or cleaning (item 10(1)(b)).
3. Whether the franchisor or an associate owns an interest in a supplier you may be required to use (item 10(1)(c)).
4. Any obligation to accept goods or services from the franchisor or an associate, and the franchisor's own obligation to supply you (item 10(1)(d) and (e)).
5. Whether you'll be offered the whole range of the system's goods or services (item 10(1)(f)).
6. Conditions for returning goods and getting refunds for the franchisor's services, and who handles them (item 10(1)(g) and (h)).
7. Whether the franchisor may change the range of goods or services, and to what extent (item 10(1)(i)).

The ACCC's model disclosure document guidance says labels such as 'preferred supplier' or 'core products' are unlikely to be adequate: name suppliers and the specific goods or services if known at the document's date. It also says details of any exclusive dealing notification lodged with the ACCC for the system are likely to be required.

1. Will the franchisor, a master franchisor (if different) or an associate of either receive a rebate or other financial benefit from a supplier of goods or services to franchisees (item 10(1)(j))?
2. If yes, the nature of the rebate or benefit received from each supplier (item 10(1)(k)(i)). The ACCC says the types of goods and services each rebate relates to are likely to be required too.
3. The name of each business providing a rebate or benefit (item 10(1)(k)(ii)).
4. The total received in the previous financial year from each supplier, as a single aggregate percentage of total group purchases from that supplier, not counting purchases by units the franchisor, master franchisor or an associate operates (item 10(1)(k)(iii)).
5. Whether any of it is shared, directly or indirectly, with franchisees (item 10(1)(l)).
6. If it is shared, the method for working out how much is kept and how much is shared, as a percentage of the rebate or by another method (item 10(1)(m)(i)).
7. A description of each direct and indirect benefit franchisees receive (item 10(1)(m)(ii)).

• Caught: any rebate or other financial benefit from a supplier to franchisees, whether it goes to the franchisor, a master franchisor or an associate. An associate includes a related company whose relationship is relevant to the system, such as one that supplies franchisees.
• The Code doesn't list the forms a benefit can take, so get advice before treating any payment or credit from a supplier to your network as outside item 10.
• Not a rebate: the price, or part of the price, franchisees pay the franchisor, master franchisor or associate for goods or services it supplies itself (item 10(2)(a)). Those payments are disclosed as payments under item 14 instead.
• Not a rebate: incentives or benefits connected with a lease of premises or a right to occupy them (item 10(2)(b)). They have their own rules, including lease incentive details, naming who provides them, within 1 month of a lease being signed (s29).
• Where franchisees may buy a supplier's goods elsewhere without the franchisor's approval, the percentage isn't required for that supplier (item 10(3)(a)). The name, nature and sharing details still are.
• Where the whole rebate from a supplier goes back to franchisees as a payment into a specific purpose fund, the percentage isn't required either (item 10(3)(b)). The ACCC gives supplier rebates as an example of fund income that annual fund statements should show.

Illustrative only, with invented figures. A franchisor's financial year ended on 30 June 2026, and its annual disclosure document update is due by 31 October 2026.

1. Supplier A sold $2,500,000 of goods to the network in 2025–26: $2,000,000 to franchisees and $500,000 to company-owned stores.
2. Leave out the company-owned purchases. The base is $2,000,000.
3. The franchisor received $100,000 in rebates from Supplier A for the year. $100,000 divided by $2,000,000 is 5.0%, so item 10 names Supplier A, describes the rebate and discloses 5.0%.
4. Counting the company stores' purchases by mistake would give $100,000 divided by $2,500,000, or 4.0%, which understates the rebate.
5. Supplier B's goods can be bought elsewhere without approval, so no percentage is needed for it, but its name, the nature of the benefit and whether it is shared are still disclosed.
6. Supplier C pays its whole rebate into the marketing fund for franchisees, so no percentage is needed, and the fund's annual statement shows the income.
7. Keep the purchase data and supplier statements behind these figures for at least 6 years after the disclosure document was last given to anyone (s37(2)).

The ACCC's information statement for prospective franchisees suggests asking whether the franchisor receives rebates from suppliers and how they're used. Take item 10 to your next meeting and ask:

• Which suppliers must I use, and does the franchisor or an associate own any of them?
• What rebates did the franchisor and its associates receive from each supplier last financial year, as a percentage of group purchases?
• How much of each rebate comes back to franchisees, in what form, and how is that worked out?
• Can I buy the same product elsewhere if it's cheaper, and how does approval work?
• Can the franchisor change suppliers or the product range without my agreement?
• How do required supplier prices compare with the open market? Ask current and former franchisees as well.
• Does the marketing fund statement show supplier rebates as income?

The Franchise Disclosure Register asks each franchisor whether franchisees face restrictions on buying goods or services from other sources. It doesn't ask about rebates, so that detail appears only in the disclosure document. FranchiseScope analysed the profiles captured on 19 August 2026:

• All categories: 70.2% said yes (809 of 1,152 profiles answering).
• Highest shares: Bakery & Dessert 95.8% (n=48), Coffee & Café 92.1% (n=38), Quick-Service Food 88.5% (n=200) and Fitness & Wellbeing 81.3% (n=123).
• Lowest shares: Cleaning 43.9% (n=66), Real Estate 45.1% (n=51) and Education & Tutoring 52.8% (n=53).
• A yes isn't a red flag by itself. Controlled supply is part of many systems; what matters is what it costs you and who benefits.
• The answers are self-reported by franchisors, so check them against item 10.
• In 2019 the ACCC's checks of 12 food franchisors found many didn't clearly disclose which essential goods were subject to supply restrictions.

• Suppliers described only as 'preferred' or 'approved', with no names.
• Mandatory suppliers, but no percentage and no reason for leaving it out.
• A percentage that appears to include company-owned stores' purchases, which shrinks the figure.
• Rebates described as shared, with no method, percentage or description of what franchisees get.
• An associate-owned supplier that item 10(1)(c) doesn't mention.
• A Register answer of no supply restrictions when item 10 lists mandatory suppliers.
• Broad one-sided rights to change suppliers or products. The ACCC's guidance notes that unfair contract terms laws can apply to supply and rebate terms.

• Map every supplier franchisees must or may use, and every rebate or other benefit paid to you, a master franchisor or any associate.
• Record each supplier's name, the goods or services involved and the nature of each benefit.
• Calculate last financial year's aggregate percentage for each supplier, leaving out company-owned units' purchases.
• Document each item 10(3) carve-out supplier by supplier, with the reason.
• Say whether rebates are shared, how the split is worked out and what franchisees receive.
• Match your Register supply-restriction answer to item 10, and keep the workings for 6 years after the document was last given (s37(2)).
• Before imposing a restriction under item 10(1)(b) or (c), note the Code says you may notify, or seek authorisation from, the ACCC under Part VII of the Competition and Consumer Act.