Important reminder about end of financial year obligations for franchisors

Commercial

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DATE PUBLISHED: August 20, 2024

key takeaways

For Franchisors that follow the Australian financial year, you need to review and update your Disclosure Document on or before 31 October 2024.
All Franchisors who have issued or intend to issue Disclosure Documents should be registered with the Franchise Disclosure Register. Registered Franchisors are required to update their profile and other information supplied to the Register by the 14^th day of the 5^th month, this is on or before 14 November 2024.

Updating your Disclosure Document

Franchisors are reminded that they are under an obligation to update their Disclosure Document each year within 4 months of the end of the Franchisor’s financial year.

For Franchisors that follow the Australian financial year, this means you need to review and update your Disclosure Document on or before 31 October 2024.

The Disclosure Document needs to be updated with any changes that occurred in the prior 12 months. This includes changes to the Franchise Agreement terms, but also updates to other parts of the Disclosure Document such as:

the estimated costs of operating a franchise business to reflect current market costs;
the sections regarding litigation and disputes (if any have occurred);
the sections on dealings by franchisees including number of franchise businesses which transferred in the prior year; and
the financial statements and solvency declaration of the Franchisor for the current year.

Even if you do not intend to lodge your Disclosure Document with the Franchise Register, you are encouraged to update your Disclosure Document now to avoid delay in the issue of your next franchise agreement or responding to any franchisee’s request for a current Disclosure Document.

Updating your details on the Franchise Disclosure Register

All Franchisors who have issued or intend to issue Disclosure Documents should be registered with the Franchise Disclosure Register.

Registered Franchisors are required to update their profile and other information supplied to the Register by the 14^th day of the 5^th month after the end of the Franchisor’s financial year.

For Franchisors following the Australian financial year, this is on or before 14 November 2024.

You can update your profile on the Register by following the links provided at the Register’s website at: https://franchisedisclosure.gov.au/

Please note that providing a copy of your Disclosure Document or Franchise Agreement to the Register is not mandatory, though you may wish to do so at your discretion.

how can mcw help?

Franchising law is one of our areas of specialty. We help Franchisors with the development of franchise documentation and provide guidance in compliance with the Franchising Code of Conduct.

Call us now for advice and assistance in reviewing your franchising documentation and complying with your yearly update obligations.