Your obligations as a franchisee
Buying a franchise is signing up to run a business someone else's way. Here is what you are actually agreeing to do, and what you can expect back.
What are a franchisee's obligations?
The core obligations
- Follow the system, operating methods, suppliers, pricing rules and brand standards as set out in the manual.
- Pay fees on time, the royalty, marketing levy and any other charges in the agreement.
- Protect the brand and its intellectual property, and meet quality and compliance standards.
- Report and record-keep as required, and cooperate with reasonable audits or reviews.
The duty of good faith
The Franchising Code 2025 imposes a duty of good faith on both franchisee and franchisor. For you, that means dealing honestly and reasonably with the franchisor; for them, the same toward you. It does not require either side to act against its own legitimate commercial interests, but it does rule out bad-faith conduct, and it applies throughout the relationship, not just at signing.
What the franchisor owes you
Obligations run both ways. The franchisor must deliver what the agreement promises, training, support, use of the brand and system, administer the marketing fund properly, meet its Code disclosure duties, and act in good faith. Read both sides of the agreement so you know what you can hold the franchisor to, as well as what it can hold you to.
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Frequently asked questions
What must a franchisee do?
Operate the business to the franchisor's system and standards, pay the royalty, marketing levy and other fees on time, protect the brand, keep records and comply with the agreement and the Franchising Code 2025, including the duty of good faith.
Can a franchisee run the business their own way?
Only within the limits the agreement allows. Following the system is the essence of a franchise, so significant freedom to deviate is usually not available. If you want full control, an independent business is the better structure.
Does the franchisor have obligations to the franchisee?
Yes. The franchisor must provide what the agreement promises, administer the marketing fund properly, meet its Code disclosure duties, and act in good faith. Obligations run both ways, so read both sides of the agreement.
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