Franchising guides

The 14 day rules, and why both of them matter

Two separate 14 day periods sit at the centre of the Code, and they are frequently confused.

The first is the disclosure period. Before you sign or pay any non-refundable money, the franchisor must have given you the disclosure document, the proposed franchise agreement in the form in which it will be executed, and a copy of the Code, at least 14 days earlier. A franchisor who hands you documents and asks you to sign that week has not complied.

The second is cooling off. After entering a new franchise agreement, a franchisee can terminate within 14 days. Any site still describing a seven day cooling off period is describing the old Code, which was replaced on 1 April 2025.

Use the disclosure period properly. It exists so that you can have the documents reviewed, speak to current and former franchisees from the list you must be given, and check the financial assumptions before you are committed.

What to actually read in a disclosure document

The disclosure document is long and most buyers skim it. Four parts repay careful attention.

1. The list of current and former franchisees, with contact details. Call the former ones. That single step tells you more than the rest of the document combined.
2. Details of current, recent and threatened litigation involving the franchisor. A pattern of disputes with franchisees is a business model signal, not a coincidence.
3. The financial information, including the franchisor's solvency statement and audited accounts where required. A franchisor in financial trouble is your problem too.
4. What happens at the end of the term. Whether there is any right of renewal, what happens to goodwill, what restraint applies afterwards, and what you can sell if you want out.

Earnings information deserves particular care. A franchisor is not obliged to give you earnings projections at all, and where information is provided it must have a reasonable basis. Verify the assumptions against real trading figures before you rely on any of it.

Disputes, and the process the Code imposes

The Code imposes its own dispute process, and it applies whatever your agreement says.

There is an obligation on both parties to act in good faith, which is enforceable. Where a dispute arises, the Code requires written notice setting out the nature of the dispute, what outcome is sought and what is required to resolve it, followed by a genuine attempt to resolve it. Mediation and conciliation are available, and the Australian Small Business and Family Enterprise Ombudsman can assist in arranging it.

For franchisors, the practical exposure sits in process failures rather than in commercial terms: late or incomplete disclosure, an agreement that differs from the version provided, marketing fund accounting that does not comply, and terminations that skip the required steps. Those failures are what turn a commercial disagreement into a regulatory problem.