We have acted for and against several established nationwide franchises for many years.
We have a thorough understanding of the laws directly relevant to franchising, leasing and licensing matters, trademark and copyright issues, commercial law and contract law.
We act for both Franchisors and Franchisees on a range of issues including:
We have represented several large Franchisor companies as well as Franchisees in Perth and Western Australia for the last 25 years in contract preparation, commercial litigation and franchise dispute matters. We have handled litigation in the Supreme, District and Magistrates Court in Western Australia and worked jointly with Eastern States Lawyers on a High Court appeal on a very high profile case.
We also regularly review Franchise Agreements and Disclosure Documents which have been given to potential franchisees by the Franchisor and give advice on the rights and obligations under the Franchise Agreement before it is signed.
It is important for a Franchisee to fully understand the risks and their obligations under a Franchise Agreement before they enter into a Franchise Agreement. If you already have a signed Franchise Agreement, we can give you practical and commercial legal advice on the clauses of the Franchise Agreement.
See further information regarding legal advice on Franchise Agreements.
Franchises are a special species of business, and both current and future franchisees, as well as franchisors, must heed the Franchising Code of conduct. Moreover, franchising agreements often contain terms that are not found in other business-related contracts.
As such, selling a franchise encounters additional considerations when compared to the sale of an ordinary business.
If a dispute has arisen, we can give you legal advice on your rights and obligations under the Franchise Agreement and advice on the dispute resolution clauses. For more information, see Franchise Disputes and Dispute Resolution.
For Franchisors we can help you in disputes with Franchisees and help you recover outstanding franchise fees.
We provide top tier services and top tier experience at substantially better rates to those of our competitors and we provide fixed fee costs wherever possible for all of our matters.
The greatest growth industry in Australia in recent years has been the franchise industry. There has unfortunately been a growth in the number of franchise disputes ending up in the court system.
The first stage of the Franchising Code of Conduct came into effect on July 1 1998 and is now mandatory. It includes provisions requiring franchisers to provide a copy of any lease to franchisees (clause 14), ensure franchisees have the right to associate (clause 15) and prepare financial statements for marketing and promotional funds (clause 17).
The second stage, which includes disclosure, conditions of franchise agreements and dispute resolution provisions, came into effect on 1 October 1998.
The code defines franchise agreements very broadly as an agreement in any form:
Although the Code’s broad definition will inevitably encompass relationships the traditional have fallen outside the usual concept of franchise, the definition expressly excludes all employer and employee relationships, partnership relationships, landlord and tenant relationships, mortgagor and mortgagee relationships, lender and borrower relationships, and the relationship between the members of a co-operative.
The code requires franchisors to give a disclosure document containing the information set out in Annexure 1 to the Code to a prospective franchisee or a franchisee proposing to enter into, renew or extend a franchise agreement. A person who proposes to transfer a franchise or franchised business is required to give a disclosure document under Annexure 2 to the Code.
The Code imposes an obligation on franchisors to update the disclosure document annually. Franchisors are also subject to a continuous obligation under the Trade Practices Act 1974 to correct any information contained in a disclosure document that becomes incorrect.
In addition, a franchisor must not enter into a franchise agreement or receive non – refundable money unless it has received a written statement from the (prospective) franchisee confirming that the franchisee has received, read and had a reasonable opportunity to understand the disclosure document and the Code.
A new franchisee must also provide a signed statement that it has received independent legal, business and accounting advice about the proposed franchisee agreement or business.
In addition to the disclosure document, the Code requires franchise agreements to contain certain clauses including:
In addition, a general release of the franchisor from all liability is prohibited. Penalties The Australian Competition and Consumer Commission will monitor and enforce the Code and will investigate and deal with breaches of it. The sanctions for breaching the provisions of the Code include injunctions, damages and corrective advertising.
At the beginning of 2015, the old Franchising Code of Conduct was repealed and replaced with the new Franchising Code of Conduct (Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth)) (the Code). This new code is applicable to conduct that took place from the 1 January 2015 that relates to a franchise agreement that was: entered into, renewed, extended or transferred on or after 1 October 1998.
The Code is a mandatory industry code that is prescribed under the Competition and Consumer Act 2010 (Cth) and is applicable to all of the parties to a franchise agreement. The Australian Competition and Consumer Commission (ACCC) are in charge of administrating and enforcing the code.
The Code outlines a range of circumstances relating to the rights and obligations of a franchisor and franchisee under a franchise agreement. The purpose of the Code is to regulate the behaviour between parties to a franchise agreement towards each other. The main aspects of the Code serve to; require franchisors to disclose certain information to franchisees, prescribe minimum standards in franchise agreements and to provide dispute resolution processes.
Under the new code:
Non-compliance with the code may result in a party facing action by the ACCC whom will issue an infringement notice or enforce a financial penalty under the Code.
If a franchise agreement was entered into between 1 July 1998 and 29 February 2008 the following provisions do not apply:
If an agreement was entered into between 1 March 2008 and 31 December 2014 the following provisions don not apply:
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