The New Franchising Code is Here – What You Need to Know About the Transition
The long-anticipated update to Australia’s franchising regulation has arrived. The Competition and Consumer (Industry Codes—Franchising) Regulations 2024 (Cth) came into force on 1 April 2025, bringing with it significant changes for franchisors and franchisees. However, despite the Government’s messaging suggesting a grace period for compliance, the reality is more complex—and in some cases, more urgent—than it appears.
Here’s a breakdown of what businesses in the franchising sector need to know about the transitional arrangements and how to stay compliant.
Who Is Affected—and When?
The new Code applies to all franchise agreements entered into, renewed, extended or transferred on or after 1 April 2025. For existing agreements made before that date, the previous version of the Code continues to apply—at least until those agreements are varied in one of the above ways.
What’s crucial to understand is that most conduct from 1 April 2025 onwards is subject to the new Code, even if the agreement itself predates it.
Delayed Obligations Until 1 November 2025
Although many of the Code’s requirements are already live, some obligations have been deferred until 1 November 2025. Franchisors can choose to adopt them earlier, but will be legally required to do so from that date. These delayed requirements include:
- Broader regulation of marketing and cooperative funds, now referred to as “specific purpose funds”
- A new mandatory statement in fund financial reports, showing the percentage of income spent on fund administration and the inclusion of the fund’s latest financial statement in the disclosure document
- Obligations to provide return on investment and compensation information to franchisees in some limited circumstances
What to Do With Your Franchise Agreement
If you’re entering into a new franchise agreement after 1 April 2025, or renewing or transferring an existing one, it must comply with the new Code. Key areas to review include:
- Termination provisions and post-term restraints
- Removal of references to the now-defunct key facts sheet
- Updates to references to specific Code provisions
- Acknowledgement of any opt-outs from disclosure or cooling-off periods, where permitted
Updating Disclosure Documents
Disclosure documents don’t need to be reissued for agreements signed between 1 April and 1 November 2025 if the original disclosure was given before April—but care is needed. The agreement itself must still comply with the new Code, and it’s wise to provide the franchisee with a copy of the current Code.
The structural changes to the disclosure document template are relatively minor—mostly relating to updated Code references and some minor additions. However, the entire document should be carefully reviewed to ensure consistency with the new legal requirements.
A New Pre-Disclosure Obligation
A key new step has been introduced: Before issuing a disclosure document, franchisors must now give any former franchisees listed in Item 6 of the disclosure document 14 days’ notice that their personal details will be disclosed—and ensure they have not objected.
This step is essential to remain compliant and must be built into the pre-disclosure process.
Franchise Disclosure Register – Extra Questions
The annual timing for registering or updating your entry on the Franchise Disclosure Register hasn’t changed—but from 1 April 2025, franchisors must answer two new questions. These relate to:
- Past litigation or insolvency history
- Provisions in the franchise agreement about arbitration
The good news is that this is information you should already be including in your disclosure documents under Items 4.2 and 17A, so it shouldn’t require additional investigation.
Final Thoughts
While the Government has suggested there’s breathing room for compliance, the reality is that many of the new obligations are already in force, and even the delayed provisions require early planning.
Franchisors should be reviewing all documentation now—franchise agreements, disclosure documents, fund statements, and their Franchise Disclosure Register entries—to ensure they’re aligned with the new Code.
If you’re unsure about how these changes affect your business, now is the time to seek legal advice. At Aventus Legal, we’re already assisting franchisors with this transition and can help ensure your franchise system remains compliant and competitive.
