Buying a second franchise unit: when disclosure and cooling-off can be waived

• There are four opt-outs: disclosure for a new agreement (s23(4)), disclosure for a transfer (s24(4)), cooling-off for a new agreement (s50(7)) and cooling-off for a transfer (s52(4)).
• Each needs a written notice from you. The franchisor can't opt out on your behalf.
• The Code doesn't define 'substantially the same' or 'recently', so compare the two agreements and the two businesses carefully.
• The information statement, the agreement itself, lease documents and the 14-day consideration period all still apply.
• The ACCC's information statement warns that it can be difficult to end an agreement once you sign, so take care before waiving cooling-off.

• New agreement, disclosure (s23(4)): you can opt out of receiving the disclosure document and a copy of the Code if you have, or have recently had, a same or substantially same agreement with the franchisor, for a same or substantially same business.
• Transfer, disclosure (s24(4)): when you buy an existing unit by transfer, you can opt out of the same documents if you have another same or substantially same agreement with the franchisor. The wording refers to an agreement you have, not one you recently had.
• New agreement, cooling-off (s50(7)): you can give up the right to terminate within 14 days, including the lease-related cooling-off rights, on the same conditions as s23(4).
• Transfer, cooling-off (s52(4)): you can give up the right to unwind a transfer, by written notice to both the seller and the franchisor, if you have another same or substantially same agreement with the franchisor.
• Each opt-out is separate. You can accept the disclosure document but waive cooling-off, or the reverse.

The Code sets two tests, and both must be met: the agreements must match, and the businesses must match. It doesn't define either phrase, so these questions help you judge it.

• Is the new agreement on the same template and version as your existing one, or has the franchisor updated its standard terms since you signed?
• Do the fees, term, territory rules, restraint and termination clauses match?
• Is the new business the same format, such as the same kind of site and product range, rather than a new concept like a kiosk instead of a full store?
• Has your existing agreement ended, and if so, how long ago? The longer the gap, the harder it is to call it recent.
• Does the new unit involve premises leased from the franchisor or an associate when your first unit didn't?
• If you can't answer these with confidence, don't opt out. Take the documents and keep the cooling-off period.

• The ACCC information statement, within 7 days of formally applying or expressing interest, if you are acquiring a franchised business. The Code has no opt-out from it (s22).
• The franchise agreement in the form in which it will be signed, and any changed version (s23(2)(a) and (3)).
• Head lease documents, if the franchisor or an associate will sublease or license premises to you (s23(2)(b)).
• The 14-day consideration period: the franchisor still can't sign until 14 days after giving you the documents s23(2) requires, and payments in that period are refundable on written request (s23(6) and (8)).
• Independent advice statements for a new agreement: one each for legal, business and accounting advice, which can be your own statement that you chose not to get it (s27).
• Related agreements, such as guarantees and equipment leases, at least 14 days before signing if they are available (s30).
• Good faith: both of you must act in good faith while negotiating the new agreement (s18(2)).

1. Get the new agreement first, and compare it with your current agreement clause by clause.
2. Decide separately about disclosure and about cooling-off. You can take one and waive the other.
3. Put the notice in writing. It should identify your existing agreement, the new agreement or transfer, and the specific right you are giving up. Check any template the franchisor offers before you sign it.
4. Give a new-agreement notice to the franchisor. For a transfer, give a cooling-off opt-out to both the seller and the franchisor (s52(4)).
5. The franchisor can't sign until it has either your written statement that you received, read and had a reasonable opportunity to understand the disclosure document and Code, or your written opt-out notice (s26).
6. Keep a copy. The franchisor must keep what you give it under the Code for at least 6 years (s37), and you should keep your own record.

• Your first unit may be on an older template. A new agreement can carry different fees, restraints or end-of-term terms that the current disclosure document would flag.
• Disclosure documents are updated each year. Waiving means missing the latest information on litigation, former franchisees, supplier rebates, specific purpose funds and significant capital expenditure.
• Without cooling-off, leaving a signed agreement usually means negotiating an exit. You can propose termination at any time, and the franchisor must reply in writing within 28 days, but it doesn't have to agree (s54).
• Your risk concentrates. A problem with the franchisor or the system now affects every unit you own.
• Lease-related cooling-off rights go too. If the franchisor or an associate is providing the premises, you lose the chance to walk away after seeing the final lease terms (s50(3), (4) and (7)).
• The opt-outs are built around knowing the same agreement and business. First-time buyers, and anyone without a substantially identical current or recent agreement, can't use them.
• Pressure to opt out is a warning sign. The choice is yours, and the good faith obligation applies to negotiations (s18(2)).

An illustrative scenario with invented details, showing how the choices play out.

1. You have run a unit since March 2022 under the 2014 Code. In May 2026 the franchisor offers you a second site nearby.
2. Its current template, updated in 2025, has a higher technology fee and new early-termination compensation terms. That isn't the same agreement, and it may not be substantially the same, so you don't opt out of disclosure.
3. You receive the disclosure document, the Code and the agreement on Monday 1 June 2026, so the earliest the franchisor can sign is Tuesday 16 June 2026.
4. The site will be sublet from the franchisor's associate. You keep cooling-off, because it also protects you if the lease terms change.
5. You sign on 16 June and have until the end of 30 June 2026 to terminate within the cooling-off period.
6. Your first unit's agreement stays under the 2014 Code until it is renewed, extended or transferred, while the second is under the current Code from signing.

• Is my current or recent agreement with this franchisor the same or substantially the same as the new one?
• Is the new business the same or substantially the same as the one I run or ran?
• Have I seen the franchisor's latest disclosure document? As a franchisee I can request it once every 12 months, and it must arrive within 2 months (s32 and s33).
• Do I understand every difference between the two agreements?
• Is there a lease, finance or capital spending commitment that makes cooling-off valuable?
• Has my lawyer seen the notice before I sign it?
• Am I choosing this freely, rather than to fit the franchisor's timetable?