Franchising Code penalties in 2026: $218,400 per breach and the $10 million tier

• A penalty unit is $364 for conduct from 1 July 2026. It was $330 from 7 November 2024 to 30 June 2026, when 600 units was $198,000.
• In the higher tier, an individual faces up to $500,000 per contravention.
• The ACCC can issue infringement notices instead of going to court: 60 penalty units for a company ($21,840) or 12 for an individual ($4,368).
• The higher tier isn't new: the 2014 Code has applied it to the equivalent obligations since 2022.
• Unfair contract terms are a separate regime: since 9 November 2023, penalties of up to the greatest of $50 million, 3 times the benefit or 30% of turnover.

Penalties are set in Commonwealth penalty units, so the dollar figures rise when the unit is indexed. The ACCC's August 2026 Venue Smart notices, for 2024–25 conduct, totalled $59,400 across three notices, which equals three lots of 60 units at $330 and suggests the value at the time of the conduct applies.

• 1 July 2023 to 6 November 2024: at $313 a unit, 600 units was $187,800, and an infringement notice was $18,780 for a company or $3,756 for an individual.
• 7 November 2024 to 30 June 2026: at $330 a unit, 600 units was $198,000, and a notice was $19,800 for a company or $3,960 for an individual.
• From 1 July 2026: at $364 a unit, 600 units is $218,400, and a notice is $21,840 for a company or $4,368 for an individual.
• The maximum applies to each contravention, so repeated failures, such as several late fund statements, can multiply the exposure.

Under s11, a subsection, or a section without subsections, that ends with the words 'civil penalty' is a civil penalty provision. Grouped by topic, they are:

• Good faith: s18(1), (4) and (5).
• Before signing: s20(1) disclosure document, s21(2) annual update, s22(1) information statement, s23(6) and (8) consideration period and refunds, s24(3) transfers, and s26 and s27(1) signed statements.
• Documents during the relationship: s29 leases, s30(1) related agreements, s31(2) fund statements, s33 updates on request, s36(2) and (3) end-of-term notices, and s37 records.
• Agreement terms: s38(1) legal costs, s39(1) releases, s40(2) jurisdiction, s41 dispute costs, s42 restraints, s43(2), (3) and (5) early termination compensation, s44(2) return on investment and s47 capex discussion.
• Transfers and cooling-off: s49(2) and (5), s51(1), and s53(2) and (4).
• Ending the agreement: s54(2), s55(2) and (3), s56(3), s57(2) and s58(3).
• Conduct during the term: s60(1) capex, s61(2) to (4) funds, s62 backdated variations, s63(1) and (3) former franchisee information, s65(1), s66 and s67.
• Disputes: s74(3) attending mediation or conciliation, and s80(8) attending arbitration.
• New car dealers: s85(2) to (5) end-of-term notices and s87 wind-down plans.
• Register: s92(2), s93(2) and s94(2).

Not penalised: s25 (form of documents), s32 (a franchisee's request), s48 (a transfer request), s69 (complaint procedure), s72 (dispute notice) and s86 (a dealer's notice).

1. Section 34(1) and (2): giving franchisees and prospects new financial documents, and written notice of materially relevant facts within 14 days.
2. Section 45(2), (3) and (5): new vehicle dealership agreements must provide early termination compensation and a buy-back of vehicles, parts and special tools, and can't exclude other compensation.
3. Section 46(2): new vehicle dealership agreements must give the dealer a reasonable opportunity to make a return on its investment.
4. Section 64: a franchisor must not restrict or impair the freedom of franchisees or prospective franchisees to form an association or associate for a lawful purpose.
5. For a company, the maximum is the greatest of $10 million; 3 times the benefit reasonably attributable to the contravention, if a court can work it out; or, if not, 10% of adjusted turnover for the 12 months ending at the end of the month of the contravention (s17). For an individual, it is $500,000.

The ACCC's fines page labels the association rule 'section 36'. In the current Code it is s64, and in the 2014 Code it was clause 33.

• Franchisors, which most of the obligations bind.
• Franchisees too, in places: the good faith obligation in s18(1) binds every party to a franchise agreement and carries 600 penalty units.
• Individuals: the Competition and Consumer Act caps an individual at $500,000 for the higher-tier provisions and 600 penalty units for others (s51AE(2A)).
• People involved in a company's breach: the Act covers related contraventions, such as aiding, inducing or being knowingly concerned in a company's contravention of an industry code.
• Directors have been penalised personally in franchising cases: in 2021 Megasave's sole director was ordered to pay $120,000 under the Australian Consumer Law.
• Master franchisors and subfranchisors can be franchisors or franchisees for Code purposes, depending on the relationship (s6).

• Infringement notices, which the ACCC can issue within 12 months of an alleged contravention. Paying one isn't an admission.
• Court-enforceable undertakings under s87B of the Competition and Consumer Act. In December 2023, Delicia Franchising paid an $11,100 notice and gave an undertaking including a corrective notice and a 3-year compliance program.
• Court orders, including injunctions and compliance programs. Breaching them is contempt: Ultra Tune was fined $1.5 million in March 2024 for breaching orders made in 2019.
• Redress for franchisees: a court can order redress for people who weren't parties to an industry code case (s51ADB of the Act). Separately, in a 2021 misleading conduct case, Megasave and its director were ordered to pay $500,000 in partial redress to affected franchisees.
• Public warning notices, which the ACCC can issue if it suspects a contravention causing detriment and a warning is in the public interest (s51ADA).
• Private claims, because franchisees can take their own action for loss caused by a breach.
• Publicity: the Australian Small Business and Family Enterprise Ombudsman can name franchisors that refuse to take part in, or withdraw from, an ADR process (s16 and s78).

• Jump Loops, 2021: $23 million, for false or misleading representations and wrongly accepting payments from franchisees.
• Geowash, 2019: $4.2 million against the company, its director and its franchising manager, for false or misleading representations and failing to act in good faith.
• SensaSlim, 2016: $3.55 million, for misleading and deceptive conduct before the Code was remade in 2015.
• Ultra Tune, 2019: $2.6 million, reduced to $2 million on appeal, including for marketing fund statements that lacked sufficient detail.
• Megasave, 29 April 2021: $1.9 million, plus $120,000 against its sole director and $500,000 in partial redress, after it admitted liability by consent in March 2021.
• Most of these penalties were for misleading conduct under the Australian Consumer Law, sometimes alongside Code breaches.

• Penalties and infringement notice payments go to the Commonwealth, not to franchisees.
• Getting money back needs your own claim, a settlement, an undertaking or a court redress order.
• Report suspected breaches to the ACCC, and use the Ombudsman's dispute service for disputes with your franchisor.
• A franchisor's enforcement history should appear in item 4 of its disclosure document, and new matters may trigger s34 notices.
• Get legal advice before you withhold fees or stop trading over a breach, because those steps can put you in breach yourself.

• Your compliance calendar lists every penalty-bearing deadline, from the 7-day information statement to the annual Register confirmation.
• The higher-tier obligations, s34 and s64, have a board-level owner.
• Agreement templates are checked against the terms the Code bans or requires.
• Records are kept for 6 years, so you can prove compliance.
• You know how to respond to an infringement notice within 28 days.
• Unfair contract terms are reviewed separately from Code compliance.