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Franchising law in Cambridge, Australia, is compiled under the Franchising Code of Conduct, a significant section of Australian Competition and Consumer Law. This code governs the relationship between franchisors and franchisees, including matters of contracts, confidentiality, marketing, dispute resolution, and much more. The Australian Competition and Consumer Commission (ACCC) is responsible for enforcing violations of this code.
Situations that commonly require legal assistance in franchising can include drafting or reviewing franchising agreements, resolving disputes between franchisors and franchisees, understanding and navigating compliance with local franchising law and regulations, and acquiring or selling a franchise. Legal counsel can guard your interests, help minimize potential risks, and provide advice on how to optimise your franchising business strategy.
The Franchising Code of Conduct in Australia requires full disclosure from franchisors to potential franchisees. It mandates that franchisors provide a disclosure document, a copy of the proposed franchise agreement, and a copy of the code itself, 14 days before the franchise agreement is signed. The code also has specific requirements surrounding marketing funds, provides avenues for dispute resolution and contains strict penalties for non-compliance.
1. What is franchising?
Franchising is a business model in which a franchisor grants a franchisee the right to use its business model and brand for a specific period of time.
2. What does the Franchising Code of Conduct cover?
The code covers a range of standard terms and behaviours to ensure transparency, good faith and fairness in franchising agreements.
3. What is a disclosure document?
A disclosure document contains important information that the franchisor must share with the potential franchisee, including any legal or financial risks.
4. What if there is a dispute between a franchisor and franchisee?
The Franchising Code of Conduct provides dispute resolution mechanisms, which can be facilitated by an accredited mediator.
5. Can the franchising agreement terms defy the Franchising Code of Conduct?
No, the code overrules any provisions in the franchise agreement that are inconsistent with it.
The Australian Competition and Consumer Commission (ACCC) provides resources and guidance for understanding franchising laws. Additionally, the Franchise Council of Australia is a trade association that offers education and support resources related to franchising.
If you need legal assistance in franchising, it's crucial to find a lawyer with expertise in this area. Prepare a list of questions and important points to discuss. Be ready to provide relevant documents related to your franchise business. Reviewing the ACCC's materials on franchising and the Franchise Council of Australia’s resources can also be a helpful preparatory step.
