RAMS agrees $29.62m franchise termination settlement

RAMS Financial Group has agreed to pay $29.62 million to settle a Federal Court class action brought by former franchisees over terminated agreements and withheld trail commissions. The agreement puts franchise exit arrangements and continuing payment rights in focus for Australia’s franchising community.

What the former franchisees alleged

According to The Adviser’s report on 23 September 2026, former RAMS franchisees brought the class action in May 2024. They alleged that the former Westpac-owned subsidiary wrongfully terminated their franchise agreements and withheld trail commissions.

Those are allegations made by the former franchisees, rather than findings established by the research provided. The reported development is an agreement to settle the proceedings. It should not be read as a court ruling that the terminations were unlawful or as an admission of liability.

The dispute brings together two questions that matter to franchise owners: how an agreement can end, and what happens to payments associated with the business after termination. In this case, withheld trail commissions form an expressly identified part of the settlement amount.

For the wider franchising community, the distinction between those questions is important. The end of a franchise agreement and the treatment of associated payments need to be considered separately when reviewing contractual rights and obligations.

How the $29.62 million is broken down

The Adviser reported that, under the deed, RAMS would pay a total of $29,624,397.67. That total comprises three amounts:

• $7,783,183.14, including GST, for the 25 per cent trail commission withheld from affected franchisees after their agreements were terminated.
• $1,042,234.01 in interest.
• A further $20,798,980.52.

The supplied research does not explain the purpose or allocation of that final amount in greater detail. It would therefore be misleading to describe it as a particular category of damages, legal costs or individual franchisee compensation.

Likewise, the total settlement figure does not establish how much any one former franchisee will receive. The research does not provide the number of recipients, an individual distribution schedule or a payment timetable.

The breakdown nevertheless provides more useful information than the headline figure alone. It identifies both a specific commission-related amount and a separate interest component, while leaving the largest component without a more detailed description in the supplied report.

What the agreement does—and does not—show

The settlement is a distinct development in a dispute that began with the former franchisees’ class action in May 2024. However, reporting an agreed payment is different from confirming that funds have already been distributed.

The available research establishes the amount RAMS agreed to pay under the deed. It does not establish that affected franchisees have received their payments, nor does it set out any further procedural steps or the settlement’s approval status.

These limits matter when interpreting the story. A headline settlement amount cannot, on its own, explain the outcome for each participant or resolve every question about the underlying contractual dispute.

It also should not be treated as a general rule governing other franchise agreements. Franchise owners considering their own position should seek advice on their particular documents and circumstances, rather than assume that the RAMS agreement determines their rights.

A practical reminder about franchise exits

For prospective and existing franchisees, the case offers a reason to examine exit provisions alongside the more familiar questions about start-up costs and ongoing fees. A useful contract review should ask what happens to continuing payments if an agreement expires, is terminated or becomes disputed.

Franchisees can also ask advisers to clarify which records would be needed to check any post-termination payment calculation. Keeping agreements, variations, commission statements and relevant correspondence organised is a practical precaution, not a conclusion about the merits of any particular claim.

Franchisors, meanwhile, can use the news as a prompt to review how termination decisions and payment calculations are documented and communicated.

Practical takeaway: Before signing or ending a franchise agreement, obtain independent legal advice on termination rights and continuing payment entitlements. The RAMS settlement highlights why both deserve close attention.