Whether you are franchising your business model, buying an existing Franchise or starting a Franchise, we can assist you to understand Franchise Laws and Codes of Conduct, and make complying and effective Franchise Agreements.

Confidently enter into Franchise Agreements and maintain franchise relationships with support from our experienced Franchise Lawyers.

Before franchising your business, buying an existing franchise business or starting a new territory it is important that you fully investigate and understand your rights and obligations and the nature of the relationship that exists between Franchisors and Franchisees.

How We Help

Our Franchising Lawyers work with both Franchisors and Franchisees to understand their rights and obligations under Franchising Laws and Franchise Agreements (including New Vehicle Dealership Agreements), make and maintain franchise relationships, and resolve franchise disputes or disagreements.

What is Franchising?

Franchising is a method or relationship for distributing goods or services involving a Franchisor, who has established a reputation in a brand or Trade Mark and systems for selling goods or services, and a Franchisee, who pays an initial and ongoing franchise fees for the right to operate a business utilising the Franchisor’s reputation and systems.

Franchising has become a common way for entrepreneurs to expand their existing businesses and for individuals to start a business that is perceived to be less likely to fail. Since the 1970’s Franchising has revolutionised retailing in Australia, and provided small business proprietors with competitive resources to compete against the large corporations that dominate Australian retailing.

Franchising Laws and Code of Conduct

Franchising in Australia is regulated by the Franchising Code of Conduct, but the Franchise Agreements are still key to the parties’ rights and obligations.

The Franchising Code of Conduct set out mandatory obligations including in relation to:

  • Franchises, Master Franchises and New Vehicle Dealerships,
  • Obligations to act in good faith,
  • Provision of Information Statement for Prospective Franchisees,
  • Disclosure Documents and Record Keeping,
  • Key Facts Sheets,
  • Pre-conditions for entering into or renewing Franchise Agreements,
  • Statements of Independent Legal, Business and Accounting Advice,
  • Terms of Franchise Agreements,
  • Cooling Off Rights,
  • Marketing and Other Cooperative Funds,
  • Transfers of Franchise Agreements and New Vehicle Dealership Agreements,
  • Proposals for Early Termination of Franchise Agreements,
  • Termination of Franchise Agreements,
  • Internal Complaint Handling Procedures, and
  • Arbitration of Franchise Disputes.

Fines of up to $66,000 apply for breaches of the civil penalty provisions under the Code.

Statements of Independent Advice

The requirements under the Code with respect to prospective Franchisees obtaining independent legal, business and accounting advice confirms the importance for such advice in relation to franchises and the significant obligations that Franchisees undertake when entering into Franchise Agreements.

Before entering into a Franchise Agreement, Franchisors must have received from the prospective Franchisee either:

  • separate Statements signed by an independent legal advisor, business advisor and accountant certifying that they have given the Franchisee advice about the Franchise Agreement or franchised business, or
  • a signed Statement by the Franchisee certifying that they have been given legal, business and accounting advice or that they have been told that such advice should be sought but decided not to seek it.
What is the cost of Franchise advice?

Many Franchisees experience great success and end up owning numerous Franchise businesses. These are typically the people who have properly investigated the franchise and sought appropriate advice before signing each Franchise Agreement.

While the costs associated with obtaining legal, accounting and business advice in relation to a Franchise may be an undesirable expense, these costs will be insignificant to the costs associated with becoming involved in litigation against the Franchisor or the risk of losing everything you own if the business fails for whatever reason.

Instead ask yourself; can I afford to enter into a Franchise Agreement without fully understanding the obligations and risks? Most people can not afford to throw away tens or even hundreds of thousands of dollars.

Assistance for Franchisors

Our Franchise Lawyers for Franchisors assist with:
  • Developing and evaluating Franchise Business Plans

  • Risk management and structuring advice

  • Registration of Trade Marks and Protection of Intellection Property

  • Compliance with Franchising Laws and Code of Conduct

  • Preparation and maintenance of Franchise Agreements, Master Franchise Agreements, New Vehicle Dealership Agreements and Disclosure Documents

  • Compliance with Work Health & Safety Laws

  • Establishing key Supplier Agreements

  • Developing company-owned businesses

  • Attracting Franchisees and making new Franchise Agreements

  • Internal Dispute Resolution Procedures and resolution of franchise disputes

  • Terminations of Franchise Agreements and recovery of franchise fees and damages

Our Franchise & Corporate Advisory Lawyers take a proactive approach to assisting Franchisors and Master Franchisors to operate successful franchise businesses and typically maintain an on-demand virtual in-house counsel relationship to address issues promptly as they arise and avoid disputes with Franchisees.

Turn complex legal issues into profitable and sustainable solutions.

Request a Discovery Meeting Now

Our Enterprise Growth & Corporate Advisory Lawyers are eager to learn about your company, understand your legal concerns and offer expert legal insights. Tell us about your company so that we can get started.

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Business Discovery Meeting

Please tell us a bit about your company so that we can start to understand it and how we may assist.

Assistance for Franchisees

Our Franchise Lawyers for Franchisees assist with:
  • Advice in relation to Franchise Laws and the Franchising Code of Conduct

  • Corporate Structuring, risk management and asset protection

  • Buying and Selling Franchised businesses

  • New Franchise Agreements and Disclosure Documents

  • New Vehicle Dealership Agreements and Disclosure Documents

  • Leases, Subleases and Rights of Re-entry Deeds

  • Employment Contracts and Workplace Policies

  • Compliance with Work Health & Safety Laws

  • Termination of Franchise Agreements

  • Dispute resolution under the Franchising Code of Conduct

Franchisors must give this Information Statement for Prospective Franchisees as soon as practicable after a prospective franchisee applies or expresses an interest in acquiring a franchised business.

A Purchaser’s Guide to Buying a Business

The Essential Guide for Buying Businesses in Australia, complete with practical Purchaser Tips and legal insights.

Franchising: Lessons for the Unwary

Over the years we have advised both Franchisors and Franchisees in relation to Franchise Agreements and Franchising issues generally; and have also acted in relation to numerous disputes on behalf of Franchisees.

Here are some real-life examples of what to watch out for:

  • Husband and wife Franchisees with multiple investment properties and substantial savings were forced to sell everything to fund continuing losses and franchisee fees and still faced the prospect of bankruptcy due to an uncompromising Franchisor.
  • A Franchisor induced a Franchisee to renew a Franchise Agreement at a time when the Franchisee was already in debt to the Franchisor for over $70,000.00. The business closed within 12 months. At the time the Franchisee owed the Franchisor over $120,000.00 and was facing bankruptcy.
  • A preferred franchise store location was rejected by a Franchisor so the Franchisee opened a store at another site. Within 8 months the Franchisor opened its own store at the original site preferred by the Franchisee.
  • A Franchisee ceased carrying on the business after 6 weeks because he was not comfortable performing one of the key requirements of the business. This lesson cost the Franchisee over $60,000.00.
  • A Franchisee was sold a Franchise business that was illegal to run in New South Wales and was forced to cease trading by the Department of Fair Trading.
  • A Franchisor of a retail shop franchise with the exclusive right to supply stock to the Franchisee repeatedly supplied excessive quantities of unsaleable stock to the Franchisee. As the stock did not sell the Franchisee could not afford to buy new stock that did sell and was forced to close the business.
  • A Franchisee felt compelled to extend themselves financially to purchase a second Franchise store in order to prevent the Franchisor from selling a Franchise in a nearby area that would impact on their business. The profit margin on each store was very low and they were forced to work weekends to keep wages expenses to a minimum.
  • Indicative turnover projections are too often relied on by Franchisees despite comprehensive written disclaimers.

Highly recommended.

I needed a franchise agreement translated into layman’s terms for me and they put me straight onto Hamish who sent me an accurate and legible report highlighting risks, costs and notable points. The price was made clear at the start, no hidden costs and it was all very professional and easy.

Mark Ainsworth

I would strongly recommend (and have) for any friends or colleagues to use Roberts Crosbie Mortensen Lawyers.

“Being a business owner we have used Roberts Crosbie Mortensen Lawyers for several issues including setting up our business, Franchise agreements and even commercial leases. On all occasions the information has been prompt, accurate, reliable and understandable. On the back of this we have also used Sam and his team to do our wills and property purchases for all of our personal work. Again always reliable, contactable, professional and above reproach.”

Luke Stevens
Amber Tiles

The service was excellent.

“We used Roberts Crosbie Mortensen for advice in relation to the renewal of our Franchise Agreement. In the past our renewals have been daunting. We were very confident in their ability to handle our matters. We have already recommended Roberts Crosbie Mortensen to other Franchisees with respect to their thoroughness and handling of our franchise renewal.”

Allan & Lorraine Beeby
Donut King Glendale

I was absolutely satisfied with the level of service and communication.

“I was referred to Sam Roberts for advice due to the dire financial situation my wife and I found ourselves in as a result of the failure of our business and pressure from our Franchisor. I was very happy with the advice regarding insolvency issues for my company and options for my wife and I in relation to bankruptcy and alternatives. Sam was very professional and his advice was practical, clear and easy to understand.”

As a direct result of Samuel’s advice my businesses have performed at a higher than expected level.

“I have undertaken 3 separate franchise ventures and on each occasion I asked Samuel Roberts to provide his expert legal opinion and advice regarding the franchise documentation, the business being conducted and various leasing arrangements and finance options.

Samuel displayed a great depth of knowledge in all of these areas and has been instrumental in securing favorable agreements in negotiations with both franchisors and landlords.

Samuel also maintains a high level of communication which has been of particular benefit to me and I would have absolutely no reservation in recommending the services of Roberts Crosbie Mortensen to anyone considering entering into any form of Franchise operation.”

Darren MacClure
Director, Dazmak Pty Limited
More Accredited Specialists in Commercial Litigation than 99% of all law firms in NSW.

Our Franchising Lawyers

Frequently Asked Questions

What legal due diligence should I undertake before becoming a Franchisor?

Whether you are buying an existing Franchise or seeking to start a new Franchise it is important to obtain legal advice in relation to the obligations of a Franchisor as dictated by relevant legislation and regulations, including the Franchising Code of Conduct, from an experienced Franchise Lawyer.

Conducting legal due diligence on your business can also maximise the franchise potential by making the franchise business more attractive to prospective Franchisees. This includes making sure:

  • your intellectual property is properly protected,
  • you have comprehensive procedures and training models in place, and
  • all key supplier or other important agreements are documented in clear and comprehensive written contracts to guarantee availability of required supplies etc.
What is a Disclosure Document?

A Disclosure Document is a document that all Franchisors must prepare and maintain to allow them to operate a Franchise, as required by the Franchising Code of Conduct.

A Franchisor must provide this document to anyone proposing to enter into, renew or extend a Franchise Agreement.

The purpose of a Disclosure Document is to give a prospective or current Franchisee information about the franchise systems. This information includes details of legal proceedings against the franchisor or its directors, contact details of current and former franchisees and movement of other Franchise businesses in the franchise system (such as sales of business and opening and closing of territories). It is a handy tool for your lawyer to review in carrying out their legal due diligence.

What is a Key Fact Sheet (in franchise terms)?

A Key Fact Sheet is one of 5 disclosure documents that a Franchisor must provide to a Franchisee.

The 5 documents being:

  • Franchise Agreement;
  • Disclosure Document;
  • Key Facts Sheet;
  • Franchising Code of Conduct; and
  • Lease documents (if applicable).

Disclosure Documents are often long and complex documents (think 80+ pages) and a Key Fact Sheet is intended to help guide a Franchisee in understanding the Disclosure Document.

A Key Fact Sheet is usually no more than 10 pages long and contains key information about the franchise including details about:

  • The Franchisor;
  • Any major disputes the Franchisor has been involved in;
  • Numbers of current and past Franchisees;
  • What the Franchisee has to pay to operate the franchise business;
  • What happens at the end of the franchise agreement.

Franchisors: you must keep your Key Fact Sheet updated as you must provide it within 14 days, to a Franchisee if they request a new Disclosure Document (which they can do once every 12 month period).

Franchisees: you must be provided with a Key Fact Sheet (and the other 4 documents) at least 14 days before you sign a Franchise Agreement.

What is a New Vehicle Dealership Agreement?

The Franchising Code of Conduct was updated with effect from 1 June 2020 to add Parts 5 and 6 which deal specifically with new vehicle dealership agreements.

Franchised new car dealerships now:

  • Have obligations on both Franchisors and Franchisees to notify each other of their intentions regarding the expiry of a new vehicle dealership agreement;
  • Must plan for the wind down of a dealership (vehicle stock and management of spare parts) if the vehicle dealership agreement is not being renewed or extended;
  • Abide by rules around significant capital expenditure with a Franchisor having to disclose any significant capital expenditure required of a Franchisee, prior to a new vehicle dealership agreement being entered into; and
  • A Franchisee has the ability to combine disputes of the same nature against a Franchisor, where the Franchisee has more than one new vehicle dealership agreement with a Franchisor.