New mandatory Franchise Disclosure Registry unveiled


A new mandatory Franchise Disclosure Registry is set to be introduced, with the aim of providing prospective franchisees with vital information needed prior to entering into a binding franchise agreement.

This national registry will require franchisors to lodge disclosure documentation about their franchise annually and shall be made publicly available so that prospective franchisees will be able to do vital due diligence before entering into a franchise agreement.

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson has welcomed the move, saying that there is a longstanding need for greater awareness among franchisees about the agreements they’re entering into, and that the registry will help improve confidence in the sector.

“My office has advocated strongly for the implementation of this registry to improve transparency of franchise operations, so prospective franchisees are properly informed before signing a franchise agreement,” Billson said. “Over the past six months, my office has fielded over 240 calls from franchisees seeking information regarding disputes under the Franchising Code of Conduct. This demonstrates just how critically important it is for prospective franchisees to know what they are getting into before signing a franchise agreement.”

The ASBFEO noted that the cost of purchasing and setting up a franchise can be very significant, so verifying with the registry, along with getting independent legal and business advice is necessary before making a substantial investment.

“Prospective franchisees need to ensure they are aware of a range of key ongoing costs associated with running the business such as wages, rent and inventory,” Billson said.

The Franchise Disclosure Registry is scheduled for release in early 2022. There will be a transition period to allow franchising businesses to understand the new requirements before the registry is mandated.

The ASBFEO stressed that assistance is available to anyone involved in a franchise dispute through calling his office on 1300 650 460 or emailing them at [email protected].