How to prepare a franchise disclosure document
The disclosure document is the most scrutinised thing you give a prospective franchisee. Getting it right protects your franchisees, your reputation and you.
What is a franchise disclosure document?
Think of it as the evidence a serious buyer and their lawyer will test. Vague, incomplete or out-of-date disclosure is both a compliance risk and a red flag that costs you good candidates.
What Schedule 1 requires you to disclose
- The franchisor's details, business experience and a signed solvency statement, with two years of financial reports or an independent audit.
- All establishment and ongoing costs and fees, and any costs that may be payable later.
- Supply arrangements, restrictions, and any rebates or financial benefits you receive from suppliers.
- Current franchisee numbers and contacts, and former franchisees (transfers, closures, terminations) over the relevant period, with contacts.
- Litigation and relevant legal proceedings.
- Significant capital expenditure franchisees may be required to make.
- Marketing or specific-purpose fund details (with the post-November-2025 requirements).
- Earnings information, if you choose to give it, with accuracy statements.
Timing and updates
- Give the Information Statement first, then the disclosure document, agreement and Code at least 14 days before signing.
- Keep the document current, and confirm and update it annually.
- Provide an updated copy on a franchisee's reasonable request (for example before renewal).
- Disclose materially relevant facts as they arise, generally within 14 days.
Common mistakes to avoid
- Thin former-franchisee disclosure that hides churn, buyers will notice, and it breaches the Code.
- Out-of-date financials or a missing solvency statement.
- Undisclosed supplier rebates or supply restrictions.
- Earnings figures with no reasonable basis or missing accuracy statements.
- Letting the register profile and the disclosure document drift out of sync.
- Disclosing significant capital expenditure: how to identify, estimate and word it9 min
- Disclosure document deadlines: the 4-month annual update and on-request updates8 min
- Franchise supplier rebates: what the disclosure document must reveal10 min
- How to franchise your business in Australia10 min
- Franchisor record keeping: the 6-year rules and the ACCC's 21-day document demand8 min
Get “How to prepare a franchise disclosure document” as a printable checklist
Plus a short, practical series on getting franchise-ready. No spam.
Frequently asked questions
When must I give a franchisee the disclosure document?
The information statement comes first, no later than 7 days after a prospective franchisee formally applies or expresses interest. Then give the disclosure document with the proposed agreement and a copy of the Code; you can't sign the agreement until 14 days after they receive them, and any payment made in that period must be refunded within 14 days if requested in writing.
Do I have to disclose former franchisees?
Yes. Schedule 1 requires details of former franchisees, including transfers, closures and terminations over the relevant period, with contact details. Prospective buyers rely on this to assess churn.
Is earnings information compulsory in the disclosure document?
No, it is optional. But if you provide it, the Code requires a reasonable basis and accuracy statements. Unsupported income claims attract ACCC enforcement.
Keep researching
Continue this question in your AI assistant, or add FranchiseScope as a preferred source on Google so more of our franchise research reaches you.
Find a franchise that fits you
Build a free buyer profile and we'll match you to franchises expanding near you, and save your progress as you research. Private by default, no account needed to keep reading.