Buying a Franchise in Australia: Check Dispute Procedures

A disagreement may be the last thing on your mind when choosing a franchise. Yet the process for resolving one can affect your cash flow, working relationships and ability to keep trading. Before joining Australia’s franchising community, examine how the proposed agreement handles disputes — not simply whether the franchisor promises to be approachable.

Understand the legal framework

Australia’s Franchising Code of Conduct is a mandatory code under the Competition and Consumer Act 2010. The Australian Competition and Consumer Commission (ACCC) regulates compliance. A new Code commenced on 1 April 2025, with some additional requirements applying from 1 November 2025. Ask your solicitor to confirm which provisions apply to your proposed agreement.

The Code requires franchise agreements to include a complaints-handling procedure and provides a framework for resolving disputes. Both parties must also act in good faith, including during dealings before an agreement is signed. Good faith does not mean either party must agree to every request or abandon its legitimate commercial interests.

The Australian Consumer Law and general contract law may also provide rights. For example, misleading representations or unfair terms in a qualifying small business standard-form contract may raise separate legal issues.

A contractual complaints process does not replace your statutory rights. Have an independent solicitor experienced in franchising explain how the agreement, the Code and other applicable laws work together.

Trace the route from complaint to resolution

Read the dispute clause as though a practical problem has already arisen: a fee appears incorrect, essential software repeatedly fails, or promised operational assistance does not arrive.

Can you identify the first person to contact, the information you must provide and what happens if that person cannot resolve the issue? An informal conversation can help, but you should also understand how to make a formal complaint.

Under the Code’s procedure, the complainant must notify the other party in writing of:

• The nature of the dispute.
• The outcome they want.
• The action they believe would settle it.

The parties must then try to agree on a resolution. If they cannot resolve the dispute within three weeks, either party can refer it to an alternative dispute resolution practitioner. Mediation or conciliation involves an independent person helping the parties seek agreement; it does not guarantee a settlement. Arbitration is different and requires agreement between the parties.

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) can assist with access to franchising dispute resolution services. The ACCC receives reports and undertakes enforcement where appropriate, but does not act as your personal solicitor or resolve individual commercial disputes for you.

Check whether the process is workable and affordable

Ask your solicitor to flag any clause that appears to discourage legitimate complaints, restrict available remedies or impose inappropriate costs. Do not assume a term is enforceable simply because it appears in the agreement — or assume you can safely ignore it because it looks unfair.

Focus your review on these practical questions:

• Notices: Which email or postal address must you use, and when is a notice treated as received?
• Escalation: Is there a named role with authority to investigate and approve a solution?
• Attendance: What arrangements apply to meetings, location and remote participation?
• Costs: How are the practitioner’s fees shared, and which expenses remain yours?
• Urgent issues: What options exist if waiting would cause serious harm to the business?

Under the Code, parties generally share the costs of alternative dispute resolution equally unless they agree otherwise, and bear their own attendance costs. Obtain advice about legal representation and likely professional fees before budgeting.

A complaint does not automatically suspend your payment or operating obligations. Withholding royalties, closing the premises or disregarding system requirements could create another dispute. Get advice before taking such steps.

Test the procedure before you commit

Ask the franchisor to walk through a hypothetical billing dispute. Who checks the records? Who responds if the local support manager cannot help? How is an agreed correction recorded and implemented?

Compare that explanation with the written agreement. A friendly assurance that “we always sort things out” is not a substitute for a clear process. Request written clarification where the explanation and contract differ, and have your solicitor review any proposed amendment.

Prepare your own record-keeping arrangements too. Retain the signed agreement, relevant correspondence, invoices and records of important conversations. If a problem occurs, a concise chronology and a clearly stated proposed solution are more useful than scattered messages.

Practical takeaway: Before signing, make sure you can explain the complaint route, escalation options and likely costs in plain English. If you cannot, pause and obtain independent legal advice.