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The Albanese government has released its redeveloped and improved Franchising Code of Conduct.
The federal government has confirmed that the current Franchising Code of Conduct will be phased out on 1 April 2025 to make way for the newly developed and improved code.
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The laws around franchising have been through several updates over the years, including a compulsory franchisor register being brought in, greater disclosure arrangements, and changes to non-competitive clauses.
The new code has been brought about to deliver and ensure a fairer and stronger franchising sector.
Following consultation, the franchising code of conduct had been remade with important changes to keep it effective and fit for purpose, according to the government.
Key changes within the code include:
- Improved protections for franchisees in relation to early termination and requirements that franchise agreements provided an opportunity to make a return on investment.
- Reduced regulatory burdens for franchisors through simplified pre-entry information requirements and streamlined processes for renewed or extended agreements.
- Clarification on the purpose of the code to better support future reviews of its operation.
Minister for Small Business Julie Collins said the redevelopment was about creating a level playing field in franchising.
“These changes reflect our government’s commitment to supporting small businesses,” she said.
“The improvements in the code strike the right balance between providing protections for franchisees and reducing red tape for franchisors who are doing the right thing.”
According to the government, the new code implemented the legislative changes from the government’s response to the independent review of the franchising code by Dr Michael Schaper in 2023.
Minister Collins said the revamped code was a step in the right direction for improving the franchising space for small businesses.
“The remade code will give franchisors and franchisees the confidence they need to grow their businesses, create jobs, and strengthen the economy,” she said.
“Our government continues to deliver for Australia’s 2.6 million small businesses, with our Small Business Statement outlining more than $640 million in targeted support to ease pressure, support growth, and level the playing field.”
Franchisors had been given a grace period until 1 November 2025 to comply with new requirements for franchise agreements and disclosure documents.
The Albanese government said it was committed to supporting Australia’s franchisors and franchisees to strengthen businesses.
[Related: Franchisees deem ACCC to be an ineffective regulator]
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