Under the Franchising Code, franchisors must provide a copy of the ‘Information Statement for Prospective Franchisees’ document which is published on the Australian Competition and Consumer Commission’s website.
This document must be provided:
- No more than seven days after a prospective franchisee formally applies or expresses an interest in purchasing a franchised business; and
- Before the franchisor provides any pre-entry disclosure documents to the prospective franchisee, namely the Franchise Agreement, Disclosure Document, Key Facts Sheet and ancillary documents.
This requirement does not apply to a renewal of a Franchise Agreement, or the extension of the term or scope of a Franchise Agreement.
The ACCC recently uploaded the 2023 version of the Information Statement. The Information Statement now advises prospective franchisees to access the Franchise Disclosure Register to compare different franchise systems. Link to updated Information Statement can be found here
Non-compliance with the requirement to provide the Information Statement attracts a penalty of 600 penalty units (currently $165,000).
Reminder
This is a timely reminder for Franchisors to update their processes and provide the 2023 Information Statement to prospective franchisees.
If you have any further questions about the above, please contact a member of our Franchising Team on +613 8540 0200 or as follows:
Raynia Theodore: raynia.theodore@mst.com.au
Esther Gutnick: esther.gutnick@mst.com.au
Carmen Wu: carmen.wu@mst.com.au
