Planning Pre-Signing Franchise Disclosure in Australia

Before granting your first franchise, you need a reliable way to give prospective franchisees the information they need before committing. Sending a contract and asking for a signature is not enough. A planned disclosure process gives candidates time to assess the opportunity, helps prevent premature commitments and establishes a transparent foundation for your franchise community.

1. Map the legal sequence before accepting commitments

Australia’s Franchising Code of Conduct is a mandatory code prescribed under the Competition and Consumer Act 2010. The Australian Competition and Consumer Commission (ACCC) oversees compliance and enforcement. The Code imposes specific obligations about what franchisors disclose and when they disclose it.

The Australian Consumer Law also prohibits misleading or deceptive conduct. A complete-looking document pack will not protect a franchisor if its contents, or the explanations accompanying it, create a misleading impression.

For a new franchise grant, build your process around these stages:

• Initial interest: provide the prescribed information statement within the required timeframe and before giving other disclosure-related documents.
• Formal disclosure: provide the disclosure document, proposed franchise agreement and a copy of the Code, together with any additional information required for the arrangement.
• Review: allow the statutory minimum period before entering the agreement or accepting a non-refundable payment.
• Commitment: check that the required statements and procedural steps are complete before authorising signing or payment.

For an ordinary new grant, the core disclosure documents must be provided at least 14 days before the prospective franchisee enters the agreement or makes a non-refundable payment, whichever happens first. Ask your franchise solicitor to confirm the applicable requirements and calculate the earliest permitted commitment date.

Do not confuse this pre-signing review period with cooling-off rights after signing. They serve different purposes.

2. Assemble a pack that describes the actual offer

Your disclosure document and agreement must reflect the franchise you are genuinely prepared to deliver. Before releasing them, compare the proposed arrangement with your operational and financial plans.

Check that the pack consistently describes:

• The franchisor’s identity and the business being offered.
• Initial and ongoing payments, including how variable charges work.
• Training, opening assistance and ongoing support.
• Territory rights and any limits on exclusivity.
• Supply restrictions and required expenditure.
• The agreement’s duration and arrangements at its end.

These checks are not a substitute for completing the Code’s prescribed disclosure requirements. They are a practical way to catch contradictions before a candidate relies on the documents.

For example, if your agreement permits online sales into a franchisee’s area, the disclosure process should not leave the candidate believing that every customer in that area belongs exclusively to them.

Use current, professionally reviewed templates rather than an old pack obtained from another franchise. Requirements can change, and additional documents or information may be necessary where premises or earnings information are involved.

Publishing a profile on the Franchise Disclosure Register is a separate obligation. It does not replace disclosure to an individual prospective franchisee or represent government approval of your offer.

3. Give questions a controlled route to resolution

Nominate one person to coordinate disclosure, even if your solicitor prepares the documents. That person should know what was sent, to whom, when it was supplied and which questions remain unanswered.

Invite candidates to obtain independent legal, accounting and business advice. Avoid treating the minimum review period as a deadline by which they must decide.

Keep explanations consistent with the proposed agreement. If a candidate asks whether you will provide additional opening support, do not make an informal promise simply to keep the process moving. Confirm whether the business can deliver it and have any agreed commitment documented appropriately.

Where negotiations change the offer, refer the revised position to your solicitor before proceeding. Ask whether revised disclosure or a further waiting period is required; do not assume the original timetable remains valid.

4. Put a release check before signing and payment

Create a short internal checklist that must be approved before anyone sends a signing request or accepts non-refundable money.

It should confirm that the correct documents were supplied, the applicable review period has elapsed, outstanding changes have been assessed and required candidate statements have been obtained. These include the written acknowledgement about receiving, reading and having a reasonable opportunity to understand the Code and disclosure document.

Give finance staff and anyone handling enquiries the same instructions. Calling a payment a reservation fee does not, by itself, resolve its legal treatment. Have proposed deposits and payment conditions reviewed before using them.

Practical takeaway: test your disclosure process with a mock candidate before your first franchise grant. You should be able to identify the documents supplied, the unresolved questions and the earliest lawful commitment date without relying on memory.