Sharetea pays $39,600 over franchise dispute-cost terms

Bubble tea franchisor Sharetea Australia has paid $39,600 in penalties after the Australian Competition and Consumer Commission issued two infringement notices over alleged breaches of the Franchising Code of Conduct. The action centres on franchise agreement terms requiring franchisees to pay costs incurred by Sharetea when settling disputes with them.

Dispute costs at the centre of ACCC action

In its announcement on 2 November 2026, the ACCC alleged that Sharetea Australia Pty Ltd entered into franchise agreements containing the disputed cost requirements. The two infringement notices concerned alleged contraventions of the Franchising Code, rather than a failure to update disclosure information or an issue with store operations.

The distinction matters for Australia’s franchise community. This action focuses on the contractual allocation of costs when a franchisor settles a dispute with a franchisee — a provision that may receive less attention than fees, territory rights or the length of an agreement when a prospective operator assesses a franchise opportunity.

The ACCC’s allegation concerns costs incurred by Sharetea itself during that settlement process. It should not be read as a finding about every type of expense that might arise in a franchise dispute.

Sharetea has paid the penalties, but payment of an infringement notice does not, by itself, mean a business is regarded as having contravened the relevant provision. The allegations and the payment therefore need to be distinguished from a court finding of a breach.

Sharetea agrees to amend its agreements

Following engagement with the ACCC, Sharetea also agreed to amend its franchise agreements. Those amendments address the dispute-cost issue and other concerns raised by the regulator about compliance with the Franchising Code and potential unfair contract terms.

“We sought changes to some terms in Sharetea’s agreements with its franchisees, because we were concerned that they were unfair,” ACCC Deputy Chair Mick Keogh said.

The agreement to make changes is an important part of the outcome alongside the financial penalties. The regulator’s response was not confined to the two infringement notices: it also sought changes to the contractual terms governing the relationship between Sharetea and its franchisees.

The ACCC described the additional matters as concerns about compliance and potential unfair contract terms. That wording does not establish that a court declared those terms unfair, and the announced outcome should not be presented as such a ruling.

For franchise operators reviewing the announcement, the central issue is how an agreement distributes responsibilities and financial burdens between the parties, particularly when their commercial relationship encounters a dispute.

Regulator stresses balanced franchise contracts

Keogh linked the action to franchisors’ obligations under both the Australian Consumer Law and the Franchising Code.

“This action by the ACCC shows that it is important for franchisors to understand, and comply with, their obligations under the Australian Consumer Law and the Franchising Code,” he said.

“Franchise agreements must not create significant imbalances between franchisors and franchisees,” Keogh added.

The Franchising Code is a mandatory national code regulating how franchising participants conduct themselves towards one another. It is intended to address power imbalances between franchisors and both prospective and existing franchisees.

The ACCC can issue an infringement notice when it has reasonable grounds to believe a person or business has contravened certain provisions of a prescribed code. That enforcement mechanism explains why the Sharetea announcement refers to alleged contraventions, even though the penalties have been paid.

For the wider franchise community, the case provides a specific contract-review issue: whether provisions dealing with dispute settlement comply with the Code, rather than simply whether both parties have signed the agreement.

An established Australian franchise network

Sharetea is an Australian company that has operated the Sharetea bubble tea franchise system locally since 2012. The brand originated in Taiwan.

According to the ACCC, Sharetea had 124 franchise businesses across Australia as of November 2025. That is a dated network figure, rather than a confirmed count at the time of the November 2026 announcement.

The action therefore concerns an established franchise network, with the announced outcome combining paid penalties and an agreement to revise contractual terms. Its relevance extends beyond bubble tea businesses: dispute-cost clauses are a practical point for franchisors and franchisees to examine when reviewing their own agreements.

Practical takeaway: Franchisors should seek legal review of dispute-cost provisions against the Code and unfair contract term requirements. Prospective and existing franchisees should ask who bears settlement costs and obtain independent advice before accepting those obligations.