Franchise Disclosure Document Update 2026: Key Deadlines and New Code Requirements

Updated August 2026
By Raynia Theodore, Principal, MST Lawyers

Franchisors must complete their annual franchise disclosure document update each year in accordance with the Franchising Code of Conduct. For franchisors with a financial year ending 30 June, the disclosure document update for the financial year ending 30 June 2026 must be completed by 31 October 2026.

Importantly, this is the first annual update cycle to fall wholly under the new Franchising Code of Conduct (the New Code), which commenced on 1 April 2025.  This year’s update is more than a routine update with more disclosure required especially in respect of specific purpose funds.

Now that the 2026 financial year is behind us, franchisors should start the process of completing the annual update of their disclosure document, as required by the New Code.

Franchisors should carefully review their current documents and compile all relevant updates and statistical information (including details of current franchisees, key events and former franchisee details, unilateral variations made, and the like).

Franchisors should also instruct their accountant or auditor to commence preparation of the 2026 financial reports and/or audit report and, where relevant, an annual statement of any specific purpose fund (see below) and an audit of the statement, if required, as soon as possible, so these are ready by the deadline.

What franchisors should review in this year’s update

What has changed under the New Code

The most significant developments franchisors need to factor into this year’s update are:

• Renumbering: disclosure requirements are now set out in Schedule 1 of the New Code and the operative provisions are expressed as “sections” rather than “clauses”. The obligation to create a compliant disclosure document (former clause 8(1)) is now section 20, and the obligation to update it annually (former clause 8(6)) is now section 21.
• Timing clarified: for franchise agreements entered into, renewed, extended or transferred on or after 1 April 2025, section 21 requires the disclosure document to be updated within four months of the first day of the current financial year. For a 30 June year end / 1 July year start this remains 31 October. For agreements pre‑dating 1 April 2025, the familiar “four months after the end of the financial year” rule continues to apply — again, 31 October for a 30 June year end. The document must also reflect the current position of the franchise and franchisor as at the date of update.
• Expanded penalties: nearly all substantive obligations are now civil penalty provisions, most carrying a maximum of 600 penalty units (see below).
• Specific purpose funds: the former “marketing fund” and “co‑operative fund” concepts have been consolidated and expanded into “specific purpose funds”, capturing marketing, cooperative, IT, conference and similar funds, with broader reporting and disclosure obligations.
• Significant capital expenditure: from 1 November 2025, enhanced disclosure is required about significant capital expenditure expected of franchisees, including its timing, rationale, risks and anticipated benefits, and the reasonable likelihood of a return on the required investment.

For a broader overview, see our guide to the 2025 Franchising Code of Conduct and the changes introduced under the New Code.

Increasing importance of a current disclosure document

Non‑compliance with the Code by franchisors continues to be firmly on the radar of the Australian Competition and Consumer Commission (ACCC). Franchising remains an ongoing ACCC compliance and enforcement focus, and the ACCC has significant audit and investigative powers and can issue infringement notices.  The ACCC has been active in 2025/2026 issuing a number of infringement notices to franchisors for non-compliance, including:

• In August 2026 franchise operator Venue Smart Pty Ltd, trading as Venue Smart, paid $59,400 in penalties after the ACCC issued it with 3 infringement notices for the following separate alleged contraventions of the Franchising Code of Conduct 2024
  • failing to prepare an annual financial statement as required by the Code for its marketing fund for the 2024-25 financial year
  • failing to keep a separate account with a financial institution for franchisee payments into its marketing fund for the 2024-25 financial year
  • failing to provide the required information for inclusion on the Franchisor Disclosure Register at least 14 days before entering into a franchise agreement with a prospective franchisee.
• In March 2026 Luxottica Franchising Australia, which trades as eyewear retailers OPSM and Laubman & Pank, was issued with an infringement notice and paid a penalty of $19,800 for allegedly breaching the Franchising Code of Conduct by failing to maintain an up-to-date profile on the Franchise Disclosure Register.
• In June 2025 Franchisors Cash Converters Pty Ltd and MTA – Mobile Travel Agents Pty Ltd (MTA) paid a $16,500 penalty after the ACCC issued both companies with an infringement notice after they each allegedly breached the Franchising Code of Conduct in failing to meet their obligation to annually update or confirm franchisor information on the Franchise Disclosure Register.

Under the New Code, infringement notice amounts are set by reference to penalty units, and court‑imposed civil penalties for substantive breaches are materially higher than under the former Code. Because penalties are expressed in penalty units, the dollar figures move with the Commonwealth penalty unit value, which increased to $364 on 1 July 2026. On that value, 600 penalty units equates to approximately $218,400.

See ACCC guidance on the Franchising Code

Provisions of the New Code which attract a penalty for non‑compliance include the obligations on franchisors to:

• create a compliant disclosure document (s 20);
• update the disclosure document within four months of the first day of each financial year (s 21);
• give each prospective franchisee a copy of the Code, the disclosure document, the franchise agreement in the form in which it is to be executed and other ancillary documents:
  • at least 14 days before the prospective franchisee enters into a franchise agreement or makes a non‑refundable payment in connection with the proposed agreement;
  • at least 14 days before renewal or extension of the franchise agreement; and
  • before the franchisor consents to a transfer of the franchise;
• prepare, for each specific purpose fund, an annual statement of receipts and expenses for the last financial year within four months of the end of that year, and provide it to each contributing franchisee within 30 days of preparation;
• have that statement audited by a registered company auditor within four months of the end of the financial year (subject to the franchisee vote to dispense with an audit) and provide the auditor’s report to contributing franchisees within 30 days of receipt; and
• notify franchisees, in writing, whether the franchisor intends to extend or enter into a new franchise agreement at the end of the term.

The two‑tiered maximum civil penalty regime introduced by the 2021 reforms has been carried into and expanded by the New Code. For the most serious contraventions — such as a failure to disclose materially relevant facts — the maximum penalty for a body corporate is the greater of:

1. $10 million;
2. if the Court can determine the value of the benefit obtained (directly or indirectly) by the body corporate, and any related body corporate, that is reasonably attributable to the contravention — three times the value of that benefit; or
3. if the Court cannot determine the value of that benefit — 10% of the annual turnover of the body corporate during the 12 months ending at the end of the month in which the contravention occurred.

For an individual, the maximum penalty for these most serious contraventions is $500,000.

Critically, under the New Code the range of obligations that attract civil penalties has widened significantly, with most substantive obligations — including the good faith obligation — now carrying a maximum of 600 penalty units. Accordingly, it is more important than ever for franchisors to comply with their obligations under the Code, and in particular their disclosure obligations.

Updates you can make yourself

Many of the changes required for the annual update are factual in nature. Franchisors can update these sections themselves, including the following:

• details of associates and officers, and their business experience;
• details of any litigation;
• details of the number of existing franchisees and franchised businesses, including their addresses, telephone numbers and the year each franchisee commenced operation;
• details of the following key events for each of the last three completed financial years (2024, 2025 and 2026):
  • franchises transferred;
  • franchised businesses that ceased operating;
  • franchise agreements that either the franchisor or the franchisee terminated;
  • franchise agreements that were not extended (as defined in the Code);
  • franchised businesses that the franchisor bought back; and
  • franchise agreements that ended when the franchisor acquired the franchised business;
• the name, location and contact details for franchisees involved in any of the above key events, unless the franchisee has specifically asked that its details remain undisclosed;
• changes to intellectual property;
• payments, including payments to third parties and significant capital expenditure, where relevant;
• specific purpose fund receipts and expenditure for the 2026 financial year;
• details of any unilateral variations made to existing franchise agreements in the last three financial years; and
• details of whether, in the last three financial years, the franchisor has considered any significant capital expenditure undertaken by franchisees in deciding what arrangements will apply at the end of a franchise agreement.

MST Lawyers’ role in your update

MST Lawyers can assist with preparing and updating franchise disclosure documents. We conduct trade mark searches and company searches of the franchisor and its related entities to ensure that all trade mark information, and information about the franchisor and its associates and officers, is correct.

A number of sections of the disclosure document involve legal rather than purely factual updates. Because franchise networks evolve over time, we recommend you review the disclosure document as a whole. If any of your policies or practices have changed, we recommend we amend the disclosure document and check your franchise agreement to determine whether corresponding changes are required.

The key areas to consider are:

• franchise sites or territories;
• supply of goods and services to franchisees, including details of rebates and/or financial benefits received from suppliers to franchisees;
• the franchisee’s supply of goods or services;
• supply of goods or services — online sales;
• significant capital expenditure — now subject to the enhanced disclosure obligations that commenced on 1 November 2025 (timing, rationale, risks, anticipated benefits and the reasonable likelihood of a return on the required investment);
• specific purpose funds disclosures – in particular whether expenses accord with the franchise agreement and New Code;
• financing;
• arrangements to apply at the end of the franchise agreement; and
• disclosure of any earnings information provided to franchisees. If earnings information is provided, it must be included in the disclosure document or an attachment to it. It is critical to have a lawyer assist with this section and draft appropriate qualifications and disclaimers, as it can expose franchisors to claims of misleading or deceptive conduct and misrepresentation if it is not accurate.

Unfair contract terms

Franchise agreements that are entered into, renewed or varied are subject to significant penalties if they contain unfair contract terms under the unfair contract terms regime in the Australian Consumer Law. If you have not already done so, we strongly recommend that franchisors review their franchise agreements for unfair contract terms and ensure compliance with the regime .

Final reminders

Franchisors must include in their disclosure document a solvency statement signed by at least one franchisor director, together with the franchisor’s financial reports for the last two financial years or an independent audit report prepared by a registered company auditor in respect of the 2026 financial year. The audit report must be completed within four months of the end of the franchisor’s financial year.

If the franchisor operates a specific purpose fund, a statement showing each fund’s receipts and expenses for the 2026 financial year must be prepared by 31 October and provided to each contributing franchisee within 30 days of preparation. The statement must also be audited by 31 October, unless the requisite majority of contributing Australian franchisees vote that an audit is not required. Franchisors should confirm the current voting threshold and timing requirements applicable to their fund under the New Code and hold any such vote in good time – by no later than 30 September 2026 for franchisors with a financial year ending 30 June (and note the vote is required to be conducted annually). The auditor’s report must also be provided to franchisees within 30 days of receipt.  “My auditor did not do it on time” will not be a defence.

More than an annual update

Franchisors should treat the requirement that the disclosure document be updated annually as an absolute minimum. Before a disclosure document is given to a prospective franchisee, franchisors should review it to ensure it remains up to date and does not create a false impression about the franchisor or the system.

For example, a disclosure document created on 31 October 2025 might state that there were no franchise terminations in the past three financial years. If, after that date and before the next update, a significant number of franchisees exit the network, the failure to disclose that development — even though the historical statement remains literally correct — could give a prospective franchisee the wrong impression and be potentially misleading and deceptive, exposing the franchisor to claims. The New Code’s express requirement to reflect the current position as at the date of update, and to notify materially relevant facts as they arise, reinforces this. It is therefore critical that franchisors regularly check the contents of their disclosure document.

Key deadlines

For franchisors with a financial year ending 30 June, a summary of the relevant key deadlines is as follows:

1. If the franchisor maintains a specific purpose fund (a Fund), then:

• any franchisee vote as to whether to audit the Fund must occur before 30 September;
• an annual Fund statement, detailing all income and expenses of the Fund, must be prepared by 31 October;
• the annual Fund statement must be audited by 31 October (unless the requisite majority of contributing franchisees have voted not to audit the Fund); and
• a copy of the annual Fund statement must be provided to franchisees within 30 days of its preparation, and a copy of the auditor’s report (if required) within 30 days of the franchisor receiving it;

1. If the franchisor wishes to provide an audit report (instead of its financial reports for the last two financial years) the independent audit must be provided by a registered company auditor by 31 October;
2. the disclosure document update must be fully completed by 31 October; and
3. the franchisor’s profile on the Franchise Disclosure Register must be updated by 14 November.

Although it seems straightforward, annual updates are often more involved than anticipated, and compliance with the New Code’s many stringent requirements can be complex — particularly in this first full cycle under the renumbered and expanded regime. Any non‑compliance, even inadvertently missing one of the above deadlines, can leave a franchisor liable to significant penalties. So start early, and reach out to our Franchising Lawyers if you require assistance.

If you have any queries about the above, please contact Raynia Theodore, Louise Wolf or Esther Gutnick in our Franchising team by email franchise@mst.com.au or by telephone +613 8540 0200.

Disclaimer: This article is general information only and is not legal advice. It reflects the position as at August 2026, including the Commonwealth penalty unit value of $364 in force from 1 July 2026. Penalty unit values and Code requirements may change; specific advice should be obtained for your circumstances.