What your franchisor can't do: 12 rules in the Franchising Code

• The rules come from the current Code, the Competition and Consumer (Industry Codes, Franchising) Regulations 2024, in force since 1 April 2025.
• They protect you before you sign, while you trade, and after you leave the system.
• Almost every obligation in the Code is now a civil penalty provision, enforced by the ACCC.
• Blocking franchisee associations sits in a higher tier: for a company, the greatest of $10 million, three times the benefit or 10% of turnover.
• Agreements signed before 1 April 2025 stay under the previous Code until they are renewed, extended or transferred, so check which Code covers yours.

Each item below names the section of the Code it comes from, so you or your lawyer can check the exact wording.

1. Sign you up before the 14-day consideration period ends. The franchisor can't sign the agreement until 14 days after you receive the disclosure document, a copy of the Code and the agreement in the form it will be signed. The clock restarts if it changes the agreement or gives you new earnings information, unless the change is minor, such as fixing an error or one you asked for (s23).
2. Keep money you paid during those 14 days. Any payment made in the consideration period must be refunded within 14 days of your written request (s23(8)).
3. Skip the information statement. It must give you the ACCC's information statement no later than 7 days after you formally apply or express interest, and before the disclosure documents (s22).
4. Charge you its legal costs for the agreement, except a fixed dollar amount that is stated in the agreement, paid before you start trading and no more than its reasonable and genuine costs (s38 and s65).
5. Make you sign a general release of its liability, or a waiver of any verbal or written representation it made to you (s39). Settling a genuine claim later is still allowed.
6. Force you to bring court action or run a dispute process outside the state or territory where your business is based, or outside Australia (s40).
7. Make you pay the costs it incurs settling a dispute with you (s41 and s66).
8. Restrict or impair your freedom to form an association, or to associate with other franchisees for a lawful purpose (s64). This is in the Code's highest penalty tier.
9. Demand significant capital expenditure, such as a major refit, unless it was disclosed before you signed, is needed to comply with the law, you agree to it, or it is incurred by all or most franchisees and approved by a majority of them (s60).
10. Backdate a change to your agreement without your written consent (s62).
11. Rely on a post-term restraint of trade after refusing to renew, when you had a renewal option, asked in writing to renew on its standard terms, met the renewal conditions, and it offered no more than nominal compensation for your goodwill (s42 and s67).
12. Give a former franchisee's personal details to prospective buyers without first telling them in writing, at least 14 days before, that they can ask for their details not to be shared (s63).

These are framed as duties rather than bans, but they limit what a franchisor can do just as much.

• Good faith: both parties must act in good faith, and the franchisor can't sign an agreement that limits or excludes that duty (s18).
• Selling your franchise: it must not unreasonably refuse a written transfer request, and if it hasn't refused in writing within 42 days, consent is deemed (s48 and s49).
• Termination for breach: it must tell you what to fix and give you a reasonable time to fix it, which need not exceed 30 days (s55).
• Termination without breach: it must give reasonable written notice and its reasons (s56).
• Your exit proposal: if you propose ending the agreement, it must reply in writing within 28 days, with reasons if it says no (s54).
• End of term: for terms of 6 months or more, it must tell you in writing at least 6 months before expiry whether it will extend, offer a new agreement or neither (s36).
• Specific purpose funds, such as marketing funds: an annual statement within 4 months of year end, given to you within 30 days, an audit unless 75% of contributing franchisees vote to waive it, and the money kept in a separate bank account (s31 and s61).
• Cooling-off refunds: if you cool off from a new agreement, it must repay you within 14 days and can only keep reasonable expenses that the agreement sets out (s51).

Penalties are set in penalty units, so the dollar figure rises when the Commonwealth penalty unit is indexed.

• Standard tier: up to 600 penalty units per contravention. At $364 a unit from 1 July 2026 that is $218,400. At the previous value of $330, which applied from 7 November 2024 to 30 June 2026, it was $198,000.
• Higher tier: for the association rule (s64), materially relevant facts (s34) and some new car dealer rules, a company faces the greatest of $10 million, three times the benefit obtained or 10% of annual turnover, and an individual up to $500,000. This tier has existed since 2022.
• Infringement notices: the ACCC can issue a notice of 60 penalty units to a company ($21,840 at today's value) or 12 units to an individual ($4,368). Paying one is not an admission, and paid notices are published by the ACCC.
• Unfair contract terms: separately from the Code, using an unfair term in a standard form small business contract has been able to attract penalties up to the greatest of $50 million, three times the benefit or 30% of turnover since 9 November 2023.

Most disputes trace back to the weeks before signing. This is the sequence the Code requires, in order.

1. The ACCC's information statement, within 7 days of your formal application or expression of interest.
2. The disclosure document, a copy of the Code and the agreement in the form it will be signed. If the franchisor or an associate leases the premises to you, the head lease or a summary of its commercial terms as well.
3. Related agreements, such as leases, security deeds or confidentiality deeds, at least 14 days before signing, if they are available.
4. A 14-day consideration period before the franchisor can sign, with any payment in that window refundable on written request.
5. Signed statements that you received and had a reasonable chance to understand the disclosure document, and, for a new agreement, that you got, or chose not to get, legal, business and accounting advice.
6. A discussion of any significant capital expenditure the franchisor has disclosed, and how you are likely to recoup it in your area, before a new agreement, renewal or extension (s47).
7. After you enter into a new agreement, a 14-day cooling-off period in which you can walk away and get your money back, less any reasonable expenses the agreement sets out.

1. Check which Code applies. Agreements entered into, renewed, extended or transferred from 1 April 2025 are under the current Code; older agreements stay under the previous one until one of those events happens.
2. Write down what happened, with dates, and keep the emails, texts and documents. Franchisors must keep Code records for 6 years, but keep your own copies.
3. Raise the issue in writing through the complaint procedure your agreement must contain (s69).
4. If it isn't resolved within 21 days of written notice, either party can refer it to mediation or conciliation. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) appoints a mediator within 14 days of a request, and the costs are usually split equally. ASBFEO estimates a mediation at about $4,000, or $2,000 for each party.
5. Report the conduct to the ACCC. It can run compliance checks, accept court-enforceable undertakings, issue infringement notices or take court action.
6. Get independent legal advice before you withhold fees, stop trading or walk away. Those steps can put you in breach of the agreement yourself.

Recent ACCC outcomes show which rules are being policed. Paying an infringement notice is not an admission that the law was broken.

• August 2026: Venue Smart paid $59,400 across three infringement notices under the current Code, including for not preparing a 2024 to 2025 marketing fund statement and not keeping fund money in a separate bank account.
• September 2026: after ACCC concerns about unfair contract terms, a fitness franchisor narrowed its restraints, reduced late-payment interest and removed early-termination fees.
• March 2024: Ultra Tune was fined $1.5 million for contempt of court for breaching earlier orders, including a late disclosure document update and late marketing fund statements. The Full Federal Court dismissed its appeal in January 2025.
• December 2023: an ACCC review of 10 newer franchisors found potentially unfair terms in every agreement it examined, including one-sided variation, set-off and restraint clauses.

• Does the agreement state a fixed dollar amount for the franchisor's legal costs, payable before you start trading?
• Is there any clause asking you to release the franchisor from liability, or to waive what it told you during the sale?
• In which state or territory must disputes be heard or mediated?
• What significant capital expenditure does the disclosure document flag, and what payback does it assume for your area?
• Can the franchisor change the agreement one-sidedly? The disclosure document and the Franchise Disclosure Register both record this.
• Is there a post-term restraint of trade, and what goodwill compensation applies if renewal is refused?
• Which specific purpose funds will you pay into, and when will you receive their annual statements?