Franchising rules by state: what differs across Australia

• Disputes: a franchise agreement can't require court action, or a mediation or other dispute process, outside the state or territory where your franchised business is based, or outside Australia (s40).
• Leases: retail lease rules differ. In New South Wales and Queensland the landlord's disclosure statement is due at least 7 days before the lease is entered into; in Victoria it is 14 days.
• Payroll tax: each state and territory sets its own threshold. In Queensland it is $1.3 million a year in Australian taxable wages, tested across a group of employers.
• Long service leave: for most employees it comes from state or territory law, and some industries, including contract cleaning, have portable schemes in some states.
• Workers compensation: governed by each state and territory, and employers in each must take out workers compensation insurance.

• The current Code, the Competition and Consumer (Industry Codes, Franchising) Regulations 2024, applies to agreements entered into, renewed, extended or transferred from 1 April 2025. Older agreements stay under the 2014 Code until one of those events happens.
• Disclosure before signing: the ACCC's information statement within 7 days of your formal application or expression of interest, then the disclosure document, the agreement and a copy of the Code at least 14 days before the franchisor can sign (s22 and s23).
• A 14-day cooling-off period after entering into a new agreement (s50).
• Good faith obligations on both parties (s18).
• Rules on transfers, termination, significant capital expenditure, specific purpose funds and restraints of trade.
• The Franchise Disclosure Register, kept by the ACCC for the whole country.
• Dispute resolution, with the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) appointing mediators on request and sessions held in Australia.

Section 40 is where your state matters most inside the Code itself.

• An agreement may require court proceedings, or a mediation or other alternative dispute resolution process, to take place in the state or territory where your franchised business is based (s40(1)).
• It can't require either to happen in another state or territory, or outside Australia. A franchisor that enters into such an agreement faces a civil penalty of up to 600 penalty units (s40(2)).
• The test is where the franchised business is based, not where the franchisor has its head office.
• Which state's law governs the contract is a separate question from where a dispute is heard, so read the governing law clause with your lawyer.
• If you own outlets in more than one state, check how each outlet's agreement deals with disputes.

If your franchise trades from a shop, your lease sits under state or territory law, even though your franchise agreement sits under the national Code.

• New South Wales: under the Retail Leases Act 1994 (NSW), the landlord must give you a written disclosure statement at least seven days before the lease is entered into, and you must give a lessee's disclosure statement within seven days of receiving it, or ask for more time.
• Victoria: the landlord must give you a disclosure statement and a copy of the proposed lease no later than 14 days before the lease is entered into. If they arrive later, the lease starts 14 days after you receive them.
• Queensland: under the Retail Shop Leases Act 1994, the lessor's disclosure statement must be given at least 7 days before you enter the lease (s21B), and a prospective tenant or assignee must give the landlord a financial advice report from a qualified accountant and a legal advice report from an Australian lawyer beforehand (s22D).
• Queensland's Act also has a section on a franchisor's disclosure obligation to a franchisee (s21D), so ask your lawyer how it applies if your franchisor subleases the shop to you.
• Buying a Queensland resale: if a lease is assigned as part of the sale of the business, the seller's assignor disclosure statement must be given at least 7 days before you enter the contract to buy the business.
• Other states and territories have their own leasing rules and small business regulators, so check the rules where your shop is before you sign.
• The Code adds its own layer. If the franchisor or an associate will sublease the premises to you, it must give you the head lease or a summary of its terms, plus any state lease disclosure the landlord gave it, before you sign (s23(2)).
• If the franchisor or an associate is to lease you the premises and the lease isn't in force when you sign, the Code gives you 14 days after receiving the lease terms to end the franchise agreement (s50).

• Payroll tax is a state and territory tax, and each sets its own threshold and rate.
• In Queensland, payroll tax applies once annual Australian taxable wages pass $1.3 million. A member of a group of employers tests the threshold on the group's combined wages, and a part-year employer gets a proportional threshold.
• If you plan several outlets under separate companies, ask your accountant how grouping applies before you expand.
• Long service leave for most employees comes from state or territory laws, which set how long someone must work to qualify and how much leave they get.
• In some states and territories, long-serving casuals are eligible for long service leave.
• Portable long service leave schemes follow workers between employers in some industries. For contract cleaning, the Fair Work Ombudsman lists authorities in the ACT, New South Wales, Queensland and Victoria; for community services, in those four and South Australia; for security, in the ACT and Victoria.
• Workers compensation is governed by each state and territory, and employers in each have to take out workers compensation insurance. Contact the regulator where your staff work.

• Licences, permits and registrations can come from the Australian Government, state and territory governments and local councils, depending on your business and location.
• The Australian Business Licence and Information Service (ABLIS), a partnership of the Australian, state and territory governments, has a guided search that lists what your type of business needs.
• Ask the franchisor which licences existing franchisees in your state hold, and who pays for them. Item 14(3) of the disclosure document must include business licences in the start-up cost breakdown.
• If you or your staff will work with children, as in tutoring or children's activity franchises, check the working with children screening rules in your state or territory before anyone starts.
• If you expand into another state, treat it as a new compliance project: a different lease law, payroll tax registration, workers compensation and licences.
• Keep the Code's dispute rule in mind as you grow: for each outlet, it is the state where that franchised business is based.

• Confirm which state or territory each outlet will be based in, and that the agreement's dispute clause complies with s40.
• Get the state lease disclosure statement on time, and check the franchisor has passed on any head lease disclosure.
• In Queensland, allow time for the financial and legal advice reports before you enter the lease.
• Ask your accountant whether payroll tax could apply, now or as you grow, including through grouping.
• Check the long service leave rules, and any portable scheme for your industry, in your state.
• Arrange workers compensation insurance before your first employee starts.
• Run an ABLIS search for your business type and location, and budget for each licence.
• Check working with children requirements if your franchise serves children.