Prepare Your First Franchise Disclosure Pack in New Zealand

Before offering your existing business as a franchise, organise the information a prospective franchisee needs to assess the opportunity. A disclosure pack is not simply a sales brochure or a copy of the franchise agreement. It should explain what the buyer is entering into, distinguish established facts from assumptions, and give both parties a reliable record of what was provided.

Understand which disclosure rules apply

New Zealand has no franchise-specific legislation, no statutory franchise disclosure regime and no government franchise registration process. That does not mean a franchisor can choose freely what to reveal or leave out.

The Fair Trading Act 1986 prohibits misleading or deceptive conduct and unsubstantiated representations. Omissions can also make the overall presentation misleading. The Contract and Commercial Law Act 2017 provides remedies for misrepresentation, potentially including damages and cancellation of a contract. Other general laws governing matters such as competition, intellectual property and privacy also apply where relevant.

The Franchise Association of New Zealand (FANZ) operates a voluntary membership framework within the franchising community. Its Code of Practice and Ethics is binding on members, rather than a law applying to every franchise.

For franchisor members, the Code requires a disclosure document with prescribed contents, updated at least annually. It must reach prospective franchisees at least 14 days before they sign a franchise agreement or become bound by a preliminary agreement to proceed. An existing franchisee requesting an updated document when renewing must receive it within one month.

Ask a New Zealand franchise lawyer to confirm your obligations and the current Code requirements before preparing the pack. If you are not a member, a structured disclosure process remains sensible risk management; it is not evidence of FANZ membership or approval.

Build a factual master document

Start with an information register rather than a polished brochure. For each subject, identify the fact to disclose, its supporting record, the person responsible for checking it and the date last verified.

Useful working categories include:

• The franchisor: its legal identity, ownership, relevant management experience and financial information.
• The business offered: what the franchisee will operate, what is included and what remains their responsibility.
• Payments and commitments: initial and continuing charges, required purchases and other foreseeable commitments.
• The relationship: the main agreement features, including term, renewal, termination and transfer arrangements.
• The operating history: which locations have actually traded, who operated them and what the pilot has demonstrated.

These categories are a preparation tool, not a substitute for the Code’s prescribed contents. For members, required material includes a franchisor solvency certificate and a summary of the franchise business’s main particulars and features.

For a first-time franchisor, accurately describe the limits of your experience. A successful company-owned shop is not an established network of independently operated franchises. Clearly label planned support services, proposed locations and untested processes rather than presenting them as existing achievements.

Keep sensitive supporting records secure. Have advisers check what personal or confidential information can appropriately be shared, rather than copying whole internal files into the pack.

Reconcile the pack before releasing it

A disclosure document can be individually accurate yet conflict with the agreement or supporting schedules. Review the documents together before sending anything to a candidate.

Check that the same legal entity appears throughout. Match fee descriptions, payment dates, contract duration and descriptions of included equipment or services. Make sure the pack does not promise support that the agreement excludes, or describe an exclusive territory where the agreement provides something different.

Use a simple discrepancy log: record the conflicting statements, assign someone to resolve them and obtain approval for the corrected wording. Do not leave the candidate to decide which version governs their expectations.

Give the pack a version number and issue date. Keep one approved master copy, with legal and financial review completed where needed. A clear approval process is especially valuable when a founder, consultant and recruitment representative all contribute information.

Control delivery, questions and updates

Create a candidate-specific delivery record showing exactly which documents were supplied, when they were sent and whether receipt was confirmed. For FANZ members, build the required disclosure period into the timetable before arranging signatures.

Keep written answers to material questions with the candidate’s file. If an answer corrects or changes the pack, update the document rather than relying on a conversation. Ask your lawyer whether a material change requires fresh delivery or an adjusted signing timetable.

Review the master pack whenever important facts change; an annual review should not become a reason to circulate information known to be outdated. Archive superseded versions so you can establish what each candidate received.

Practical takeaway: Before offering your first franchise, approve one checked disclosure pack, appoint an owner for updates and establish a delivery record that makes rushed or undocumented disclosure difficult.