Planning Franchise Dispute Resolution in Australia

Before you franchise an existing business, decide how you will handle disagreements with the people investing in your model. A successful company-owned operation may rely on the founder settling every problem personally. A franchise community needs a clearer approach: one that separates everyday support requests from formal disputes and gives both parties a fair route towards resolution.

Understand the Australian legal framework

Australia regulates franchising through the Franchising Code of Conduct, a mandatory code under the Competition and Consumer Act 2010. The Australian Competition and Consumer Commission (ACCC) enforces it. The current Code commenced on 1 April 2025, with some requirements applying from 1 November 2025.

The Code contains dispute resolution requirements and obliges parties to act in good faith. Your franchise agreement must contain a complaints handling procedure that complies with the Code. A franchisee can use the applicable Code procedure rather than being restricted to an internal process you prefer.

Good faith does not mean agreeing to every request or abandoning legitimate commercial interests. It does mean that the way you exercise rights and handle disagreements matters. An agreement should not be treated as permission to act dishonestly or undermine the relationship.

The Australian Consumer Law also matters, including its rules against misleading or deceptive conduct and, where applicable, unfair contract terms. Have an Australian franchise solicitor review the complaints procedure alongside the agreement. Do not import a clause from an overseas template or assume an ordinary customer complaints policy is sufficient.

Design a clear route from concern to formal dispute

Start with an accessible contact point. Franchisees should know where to raise a concern, who will respond and how to escalate it if the person involved cannot resolve it.

Separate your process into two routes:

• Routine support: questions about systems, training, invoices or service delivery that can usually be resolved through normal assistance.
• Formal disputes: disagreements requiring a written statement of the problem, the outcome sought and the action the complainant believes would settle it.

These categories should help you allocate work, not create barriers. Do not repeatedly label a serious complaint as a support ticket to avoid addressing it formally.

Under the Code’s dispute process, the complainant notifies the other party in writing about the nature of the dispute, the outcome wanted and the action they think will resolve it. The parties must then try to agree on a resolution. Build your internal workflow around these requirements, with legal advice on the applicable time limits and escalation rights.

Set realistic internal acknowledgement and response targets, clearly distinguishing them from statutory deadlines. Offer another contact where the complaint concerns the founder or relationship manager. In a small business, that might mean arranging access to an appropriately qualified external adviser.

Prepare people, records and decision-making authority

A procedure is only useful if someone has time and authority to run it. Before offering franchises, nominate a responsible person and a deputy. Decide who can approve practical remedies, such as additional training, correcting an invoice or changing a support arrangement.

Create a secure dispute record containing:

• The original complaint and date received.
• Relevant agreement provisions and supporting evidence.
• Correspondence, meeting notes and proposed solutions.
• Agreed actions, responsible people and completion dates.
• Any unresolved points or next steps.

Distinguish facts from opinions. After a conversation, send a factual summary and invite corrections rather than relying on memory. Limit access to those who need the information, and obtain advice on privacy and document retention obligations. Certain records covered by the Code must be retained for six years; a general email deletion policy should not override those requirements.

Train your team not to promise outcomes beyond their authority or threaten termination as a negotiating tactic. For example, a disagreement about support delivery should prompt a review of what was promised, what happened and what remedy is appropriate—not an immediate accusation that the franchisee is difficult.

Plan for independent help and learn from outcomes

Not every disagreement can be settled internally. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) can assist with franchise dispute resolution, including access to alternative dispute resolution services. A state small business commissioner may also provide assistance.

Your solicitor should explain the Code’s mediation and conciliation pathways, relevant time limits and participation obligations. Arbitration may also be available by agreement. Do not assume that reporting a matter to the ACCC will resolve an individual contractual dispute or secure compensation.

Budget for independent advice and management time. Avoid clauses requiring franchisees to pay your costs of settling a dispute; the Code restricts such terms.

Finally, review recurring causes without circulating confidential details. Repeated complaints about the same promise may reveal a gap in training, communication or delivery.

Practical takeaway: Before recruiting your first franchisee, have a legally reviewed complaints procedure, a named decision-maker and a secure record system ready. Fair dispute handling is part of building a durable franchise community.