End-of-term notices: the 6-month rule and what your franchisor must tell you

• Missing the deadline, or leaving out the disclosure document statement when extending, can attract up to 600 penalty units, which is $218,400 for conduct from 1 July 2026.
• The franchisor doesn't have to give reasons, except in new car dealerships.
• New car dealers get at least 12 months' notice for terms of 12 months or more, unless both sides agree a later time, plus reasons for a non-renewal and a written wind-down plan (s85 to s87).
• Good faith applies to renewal decisions, but having no renewal option isn't in itself a failure of good faith (s18(7)).
• The 2014 Code has a similar 6-month rule (clause 18) for agreements that haven't moved to the current Code.

1. It must be in writing (s36(1)).
2. It must say which of three things the franchisor intends: to extend the agreement, to enter into a new franchise agreement with you, or neither.
3. If the franchisor intends to extend, it must include a statement that you may request a disclosure document under s32, subject to the once-every-12-months limit (s36(3)).
4. It must arrive at least 6 months before the term ends if the term is 6 months or longer, or at least 1 month before if it is shorter (s36(2)).
5. It doesn't have to give reasons for the decision, unless the agreement is a new vehicle dealership agreement.

Your agreement may add its own notice terms. Read both, and keep the notice with proof of when it arrived.

• Reasons for not extending or not offering a new agreement, outside car dealerships.
• The terms of any new agreement. Those come later, with the documents in s23.
• An offer of goodwill compensation. Whether you can claim it depends on the agreement, which item 18 of the disclosure document summarises.
• Your option to renew. If you have one, exercising it is up to you, in writing and within any window the agreement sets.
• What happens if the franchisor misses the deadline. The Code makes a late or missing notice a civil penalty matter, but doesn't say the agreement is extended as a result.
• Expect questions anyway. ASBFEO's June quarter 2026 report describes a franchisee who disputed the reasons given for a non-renewal, and says ASBFEO referred the parties to a dispute resolution provider.

• Renewal: you exercise an option in the agreement, during its term, to renew it (s6).
• Extension of the term: the term is lengthened other than through your option, for example by a deal with the franchisor (s6).
• New agreement: you sign a fresh agreement. The ACCC's disclosure guidance says that if a franchisor requires its then current agreement, which may have different terms such as payment terms, it should say so.
• All three bring an older agreement under the current Code if they happen on or after 1 April 2025 (s97).
• Renewals and extensions carry no cooling-off period (s50(6)).
• A new agreement does carry the 14-day cooling-off, unless you validly opt out in writing as an existing franchisee (s50(7)).

If the franchisor is extending or offering a new agreement, the Code's pre-signing steps apply again.

1. Request an updated disclosure document if you haven't in the last 12 months. It must be updated to the end of the previous financial year and given to you within 2 months (s32 and s33).
2. The franchisor must give you the agreement in the form it will be signed and, unless you opt out in writing, the disclosure document and the Code (s23).
3. It can't sign until 14 days after giving you those documents, or after any changed agreement or new earnings information (s23(6)).
4. It must discuss any significant capital expenditure disclosed, and how you're likely to recoup it in your area, before renewing or extending (s47).
5. You sign a statement that you received, read and had a reasonable opportunity to understand the disclosure document and the Code, or give an opt-out notice (s26).
6. The ACCC's information statement and the independent advice statements aren't required for renewals or extensions (s22(2) and s27(3)).
7. If the answer is neither, plan the exit: the restraint, stock, equipment, the lease, staff, and whether you can sell before the end.

This example assumes a term ending on 30 June 2028. Adjust it to your own expiry date and any option window in your agreement.

1. June 2027, 12 months out: read the renewal option, its conditions and notice window, the restraint and item 18 of your disclosure document.
2. July to September 2027: fix any breaches, and request an updated disclosure document if you haven't in the last 12 months.
3. By late December 2027, 6 months out: the franchisor's written notice under s36 is due.
4. January to March 2028: if you have an option, exercise it in writing within the window, seeking renewal on the franchisor's current standard terms.
5. February to April 2028: receive the documents, take advice and discuss any significant capital expenditure. The franchisor can't sign until 14 days after you receive the documents.
6. April to June 2028: sign, or if the answer is no, claim any goodwill compensation in writing and plan your exit.

• Diarise every agreement's expiry date and the 6-month (or 1-month) deadline, with a buffer.
• Decide early whether you will extend, offer a new agreement or neither, and record your reasons, even though the Code doesn't require you to give them.
• Put the notice in writing and state the intention clearly.
• If you intend to extend, include the statement about requesting a disclosure document under s32.
• If you're declining a franchisee who has a renewal option, check the restraint rule: s42 and s67 can stop you relying on a post-term restraint unless genuine goodwill compensation is available.
• Keep a copy of the notice and proof of delivery. Documents you give under the Code must be kept for at least 6 years (s37).
• New car dealers: follow s85 to s87 instead, including 12 months' notice, reasons and a wind-down plan.

• When does my term end, and when is the franchisor's notice due?
• Do I have an option to renew or extend, and what are its conditions and window?
• Has the notice arrived in writing, and does it say extend, new agreement or neither?
• If the franchisor is extending, does the notice tell me I can request a disclosure document?
• What will a new agreement change: fees, territory, term or capital spending?
• If the answer is no, what happens to my restraint, goodwill, stock and equipment?