The Government has recently made changes to the franchising rules. The most important update for Franchisor’s to be aware of is that concerning updated the Information Statement for Prospective Franchisees.
In particular, Franchisors must now give the updated Information Statement to anyone interested in becoming a franchisee:
- No later than 7 days after they express interest in becoming a Franchisee; and
- Before giving them any other documents (including documents like the disclosure document or franchise agreement.
It is important Franchisors now issue the updated version of the information to potential franchisees. This updated Information Statement can be found on the Australian Competition and Consumer Commission (ACCC) website.
The Information Statement is a document which sets out the key issues for a potential franchisee to consider before becoming a franchisee. This includes the risks associated with franchising, conducting due diligence on the franchise and properly researching the model and business and questions a potential franchisee should ask a franchisor and other relevant persons. The Information Statement also sets out key franchisee rights such as cooling off periods and rights post signing.
If you require assistance with compliance in your Franchise business or are a Franchisee seeking guidance on your rights, Adams & Partners Business Law Team can help you. Contact us on (02) 4721 6200.
Written by Amelia Hatton.