Can franchisees waive the marketing fund audit? The 75% vote explained

• The vote is per fund and per financial year. A waiver for one year doesn't carry into the next.
• The deadline is 3 months after year end: 30 September for a 30 June year end, or 31 March for a 31 December year end.
• The Code's threshold is 75% of the franchisees in Australia who paid into the fund that year. The ACCC's disclosure guidance says the 75% can include franchisor-owned franchises.
• The same 75% rule applied to marketing and cooperative funds under the 2014 Code (clause 15(3)). Since 1 November 2025 it has covered every specific purpose fund.
• Without a valid waiver, a registered company auditor must audit the statement within 4 months of year end, and you get the auditor's report within 30 days of the franchisor receiving it.

Section 31(2) has three parts, and the vote affects only the last one.

1. Still required: an annual financial statement for the fund, prepared within 4 months after year end, with meaningful detail of receipts and expenses (s31(2)(a) and (3)).
2. Still required: the percentage of total income spent on the fund's permitted expenses, and on administration and audit costs (s31(3)(b)).
3. Still required: a copy of the statement to every contributing franchisee within 30 days of preparing it (s31(2)(b)).
4. Waived for that year only: the audit by a registered company auditor within 4 months, and giving franchisees the auditor's report within 30 days of receiving it (s31(2)(c)).
5. Not affected: the separate account, the rule that company-owned units pay in on the same basis, and the limits on what fund money can pay for (s61).
6. Not affected: disclosure. New disclosure documents must still describe the fund under item 15 and attach the latest statement.

The Code's wording is brief, so the details matter. Check them with your lawyer before a vote.

• The group is every franchisee, including subfranchisees, in Australia who paid money into that fund in that financial year (s31(4)).
• The Code refers to 75% of that group voting to agree. On a plain reading, that is 75% of all contributors, not 75% of whoever returns a vote, so franchisees who stay silent don't help a waiver pass.
• The ACCC's model disclosure document guidance (April 2025) says the 75% can include franchisor-owned franchises. In a system with many company units, ask how those votes were counted.
• The Code doesn't say how the vote must be run, or how a franchisee with several units is counted. Your agreement may say more. If it doesn't, the method should be agreed and recorded in writing first.
• Illustrative example, on the plain reading: if 40 franchisees paid into the fund, a waiver needs at least 30 yes votes (75% of 40). If 28 vote yes, 8 vote no and 4 don't respond, the audit goes ahead.

There's no single right answer. Weigh these points for each fund, every year. First, the reasons a waiver might make sense.

• Audit fees can come out of the fund itself, because the Code lets the fund pay the reasonable costs of auditing it (s61(4)(b)). For a small fund, skipping the audit leaves more money for the fund's purpose.
• The fund is small and simple, and the statement already itemises each supplier, campaign and cost.
• Previous audits were clean, and statements have always arrived on time.
• You still get the statement, including the share spent on administration and audit, and can still question it.

Now the reasons to keep the audit.

• An audit is the only independent check on the fund's figures. Without it, you rely on the franchisor's own accounting.
• The vote closes 3 months after year end, but the statement isn't due until 4 months. You may be asked to waive the audit before you've seen the numbers.
• Large funds, payments to related companies, or vague lines such as 'digital' or 'social media' make independent checking more valuable.
• Past problems, such as late statements or company stores not paying in on the same basis, suggest the fund needs more scrutiny, not less.
• Fund basics do slip. In December 2023 Delicia Franchising paid an $11,100 infringement notice and admitted breaches in a court-enforceable undertaking: its marketing fund statements for 2020 to 2022 lacked sufficient detail and weren't given to franchisees within 30 days.

The Code sets the threshold and the deadline, not the method. These steps create a clear record.

1. List every franchisee in Australia who paid into that fund during the financial year, fund by fund. Decide with your lawyer how company-owned units and multi-unit franchisees are counted, and say so.
2. Put the proposal in writing: which fund, which financial year, what the audit would cost and who pays for it, and what franchisees give up by waiving it.
3. Give franchisees time to consider it and ask questions, well before the 3-month deadline.
4. Collect each vote in writing, with the franchisee's name, the fund, the year and the date.
5. Count yes votes against the whole contributing group, not just the votes returned. If the count falls short of 75% by the deadline, book the audit.
6. Tell all contributors the result in writing, and keep the votes. Anything franchisees give you in writing under the Code must be kept for at least 6 years (s37).
7. Prepare the statement within 4 months and give it to franchisees within 30 days of preparing it, whatever the result.
8. Repeat the process next year if you want another waiver. It never rolls over.

• 30 June year end: the vote closes on 30 September, the statement and any audit are due by 31 October, and the statement must reach franchisees within 30 days of being prepared.
• 31 December year end: the vote closes on 31 March, the statement and any audit are due by 30 April, and the same 30-day delivery rule applies.
• Other year ends: count 3 months from year end for the vote, and 4 months for the statement and audit.
• Right now: for the 2025–26 financial year with a 30 June year end, the vote window closes on 30 September 2026 and the statement is due by 31 October 2026.

1. Ask in writing for the statement, the auditor's report, or evidence of a valid waiver vote.
2. Compare the statement with item 15 of your disclosure document: the fund's purpose, contribution rates and permitted kinds of expenses.
3. Talk to other franchisees. A franchisor must not restrict your freedom to associate with them for a lawful purpose (s64).
4. Give a written notice of dispute under your agreement's complaint procedure. If it isn't resolved within 21 days, either side can refer it to mediation, and ASBFEO appoints a mediator within 14 days if you can't agree on one (s72).
5. Report suspected breaches to the ACCC. The statement and audit duties are civil penalty provisions, and the ACCC has issued infringement notices for missing and late fund statements.

• Which fund and which financial year is the vote about?
• How much would the audit cost, and would it be paid from the fund?
• Have I seen last year's statement and auditor's report?
• Does the fund pay the franchisor or a related company for anything?
• How are company-owned units and multi-unit franchisees being counted?
• What share of fund income went on administration and audit last year?
• Will I still receive this year's statement on time, whatever the result?