Friendly Reminder to Provide Information Statement to Prospective Franchisees
With the Franchising & Business Opportunities Expos held in Melbourne in May and future Expo’s being held around Australia, it is important for Franchisors to provide the Information Statement required by the Franchising Code of Conduct to prospective franchisees.
The Information Statement is a five-page document that must be provided to franchisees and prospective franchisees as soon as possible, but no later than 7 days after a prospective franchisee:
- formally applies to acquire a business; or
- expresses an interest in acquiring a business; and
- before the Franchise Agreement, Key Facts Sheet and Disclosure Document are provided.
This means that the Information Statement must be provided in response to any enquiries about purchasing a franchise, including inquiries that may be made at an Expo or trade show.
Franchisors must provide the latest Information Statement that is published on the ACCC’s website. The Information Statement was updated recently (refer to our previous article). Non-compliance attracts a penalty of 600 penalty units (currently $165,000).
Engaging with prospective franchisees and growing your franchise is always exciting. However, Franchisors should not forget to provide a copy of the Information Statement as part of the franchise recruitment process.
If you have any further questions about the above, please contact a member of our Franchising Team on +613 8540 0200 or as follows:
Carmen Wu: email@example.com