Franchise Disclosure Register – Deadline to Register Fast Approaching
On 15 April 2022 changes to the Franchising Code of Conduct (‘Code’) came into effect mandating a Franchise Disclosure Register (‘Register’) for all Franchisors operating in Australia, with the exception of master franchisors with only one Australian master franchisee who do not intend to grant further franchises in Australia.
The Register is a public database of franchisor profiles in Australia. Its intended purpose is to assist prospective franchisees in conducting due diligence before entering into a franchise agreement by allowing them to search the Register for relevant information and documents relating to franchise systems by industry.
Information to be Published
The Code requires Franchisors to create a public profile and publish certain information about their franchise system on the Register. This information includes the Franchisor’s name, trading name and ABN, addresses, business telephone number and business email address. Franchisors will also need to ascertain the ANZSIC division and subdivision codes for the industry the franchise operates in and also disclose these codes.
In addition to the required information, clause 53A(3) of the Code allows franchisors to voluntarily upload certain documents namely, their Disclosure Documents, Key Facts Sheets and standard form Franchise Agreements, noting that before a document is provided for inclusion in the Register, certain information must be redacted from the document. This includes any personal information that relates to an individual other than the franchisor or information that relates to a particular franchisee or a particular site being occupied by a franchisee. In addition, franchisors may choose to redact from the document information that is of a commercial nature and is commercially sensitive.
Deadline for Creating Profile
Franchisors must create their profile on the Register by 14 November 2022 and the information will be publicly available from 15 November 2022. The Register will need to be updated annually before the 14th day of the fifth month following the end of the Franchisor’s financial year.
Failure to provide initial information required by the Code, as well as failing to confirm or update information included in the Register by the applicable deadlines each carry a maximum civil penalty of 600 penalty units which currently equates to $133,200 per offence. So, it is important that Franchisors make note of the respective deadlines and comply with these new obligations.
Creating Franchisor Profile
To commence the registration process, Franchisors must create a corporate MyGovID linked to the Franchisor’s ABN. The link to log into the Register and commence this process can be found here. We recommend Franchisors start creating their profile as soon s possible as it takes some time. As a starting point, Franchisors will need to nominate and authorise a person to complete the registration in Relationship Authorisation Manager (RAM). The person nominated will be authorised to act on behalf of the Franchisor in respect of a number of government departments and can set up authorisations for others to act on behalf of the business. Accordingly, careful consideration should be given as to whom is to be authorised by the Franchisor. The authority will be valid for 12 months.
Overseas franchisors who do not have an ABN to register through MyGov will have a workaround on the Register.