With the proposed changes to the Franchising Code of Conduct due to commence on 1 January, 2015, is there any benefit for franchisees to wait to sign a franchise agreement? If there is no urgency to sign the franchise agreement or to start the franchised business then the answer may be "yes". The changes oblige franchisors to disclose more information in their disclosure documents.  This information may be invaluable for a potential franchisee in deciding to enter in...

Some of the changes you can expect to the Franchising Code of Conduct from 1 January, 2015: 1. Online Sales If a franchisor, its associates, any of its franchisees or any third parties can sell some or all of its products online then the franchisor may need to disclose this.  The franchisor needs to disclose the extent to which the goods or services can be supplied into the territory of a franchisee. If the goods or services are made available through a third party website...

The case of SPAR Licensing Pty Ltd v MIS QLD Pty Ltd [2014] FCAFC 50 has considered the franchisor's obligation to provide updated solvency statements in disclosure documents given after the end of a financial year but before the disclosure document has been updated in accordance with the Franchising Code of Conduct (which currently allows franchisors until 31 October, 2014 to update it disclosure document for the previous financial year). It was held the franchisor needed to provi...