11　 　Advice before entering into franchise agreement

(1) The franchisor must not:

(a) enter into, renew or extend a franchise agreement; or

(b) enter into an agreement to enter into, renew or extend a franchise agreement; or

(c) receive a non-refundable payment (whether of money or of other valuable consideration) under a franchise agreement or an agreement to enter into a franchise agreement; unless the franchisor has received from the franchisee or prospective franchisee a written statement that the franchisee or prospective franchisee has received, read and had a reasonable

opportunity to understand the disclosure document and this code.

(2) Before a franchise agreement is entered into, the franchisor must have received from the prospective franchisee:

(a) signed statements, that the prospective franchisee has been given advice about the proposed franchise agreement or franchised business, by any of:

(i) an independent legal adviser;

(ii) an independent business adviser:

(iii) an independent accountant; or

(b) for each kind of statement not received under paragraph

(a), a signed statement by the prospective franchisee that the prospective franchisee:

(i) has been given that kind of advice about the proposed franchise agreement or franchised business; or

(ii) has been told that that kind of advice should be sought but has decided not to seek it.

(3) Subclause (2):

(a) does not apply to the renewal or extension of a franchise agreement with a franchisor; and

(b) does not prevent the franchisor from requiring any or all of the statements mentioned in paragraph (2) (a).

Part 3　 　Conditions of franchise agreement

13 　Cooling off period

(1) A franchisee may terminate an agreement (being either a franchise agreement or an agreement to enter into a franchise agreement) within 7 days after the earlier of:

(a) entering into the agreement; or

(b) making any payment (whether of money or of other valuable consideration) under the agreement.

(2) Subclause (1) does not apply to the renewal, extension or transfer of an existing franchise agreement.

(3) If the franchisee terminates an agreement under subclause (1), the franchisor must, within 14 days, return all payments (whether of money or of other valuable consideration) made by the franchisee to the franchisor under the agreement.

(4) However, the franchisor may deduct from the amount paid under subclause (3) the franchisor’s reasonable expenses if the expenses or their method of calculation have been set out in the agreement.

14　 　Copy of lease

(1) If a franchisee leases premises from the franchisor or an associate of the franchisor for the purposes of a franchised business, the franchisor or the associate from which the premises are leased must give to the franchisee 1 of the documents mentioned in subclause (2) within 1 month after the

lease or agreement to lease is signed by the parties.

(2) For subclause (1), the documents are:

(a) a copy of the agreement to lease;

(b) a copy of the lease.

(3) If the franchisee occupies, without a lease, premises leased by the franchisor or an associate of the franchisor, the franchisor or the associate who leases the premises must give to the franchisee 1 of the documents mentioned in subclause (4) within 1 month after:

(a) the occupation commences; or

(b) for the documents mentioned in paragraph (4) (b) — the documents are signed by the parties.

(4) For subclause (3), the documents are:

(a) a copy of the franchisor’s or associate’s lease or agreement to lease;

(b) a copy of the documents that give the franchisee rights to occupy the premises;

(c) written details of the conditions of occupation.

15 　Association of franchisees

A franchisor must not induce a franchisee not to form an association or not to associate with other franchisees for a lawful purpose.

16　 　Prohibition on general release from liability

(1) A franchise agreement entered into on or after 1 October 1998 must not contain, or require a franchisee to sign, a general release of the franchisor from liability towards the franchisee.

(2) However, subclause (1) does not prevent a franchisee from settling a claim against the franchisor after entering into a franchise agreement.

17　 　Marketing and other cooperative funds

(1) If a franchise agreement provides that a franchisee must pay money to a marketing or other cooperative fund, the franchisor must:

(a) within 3 months after the end of the last financial year, prepare an annual financial statement of the fund’s receipts and expenses for the last financial year, including the amount spent on production, advertising, administration, goods or services supplied by the franchisor or an

associate of the franchisor and other stated expenses; and

(b) have the statement audited by a registered company auditor within 3 months after the end of the financial year to which it relates; and

(c) if the franchisee asks, in writing, for a copy of the statement — give a copy of the statement to the franchisee within 30 days after the request.

(2) However, a franchisor does not have to comply with paragraph (1) (b) for the financial year if 75% of the franchisor’s franchisees in Australia, who contribute to the fund, agree.

(3) A franchisor is taken to have complied with paragraph 12.1 (h)

of Annexure 1 if, to the extent to which the franchisor is aware of the details, the franchisor supplies the following information for the period before 1 July 1998 to the franchisee:

(a) the amounts of expenditure on production, advertising, administration and any other category of expenditure stated in the disclosure document for each marketing or other cooperative fund controlled or administered by or for the franchisor to which the franchisee may be required to contribute;

　　 (b) the percentage that each amount disclosed in accordance with paragraph (a) constitutes of the total expenditure disclosed in accordance with that paragraph.

(4) If a franchise agreement provides that a franchisee must pay money to a marketing or other cooperative fund, the reasonable costs of administering and auditing the fund must be paid from the fund.

18 　Disclosure of materially relevant facts

(1) If a disclosure document does not mention a matter mentioned in subclause (2), the franchisor must tell a franchisee or prospective franchisee about the matter, in writing, within a reasonable time (but not more than 60 days) after the franchisor becomes aware of it.

(2) For subclause (1), the matters are:

(a) change in majority ownership or control of the franchisor;

(b) proceedings by a public agency, a judgment in criminal or civil proceedings or an award in an arbitration against the franchisor in Australia alleging:

(i) breach of a franchise agreement; or

(ii) contravention of trade practices law; or

(iii) contravention of the Corporations Law; or

(iv) unconscionable conduct; or

(v) misconduct; or

(vi) an offence of dishonesty;

(c) a judgment against the franchisor, other than for unfair dismissal of an employee, under:

(i) section 127A or 127B of the Workplace Relations Act 1996; or

(ii) section 106 of the Industrial Relations Act 1996 of New South Wales; or

(iii) section 276 of the Industrial Relations Act 1999 of Queensland;

(d) civil proceedings in Australia against the franchisor by at least 10%, or 10, of the franchisees in Australia of the franchisor (whichever is the lower);

(e) any judgment that is entered against the franchisor in Australia, and is not discharged within 28 days, for at least:

(i) for a small proprietary company — $100,000; or

(ii) for any other company — $1,000,000;

(f) any judgment that is entered against the franchisor in a matter mentioned in item 4.2 of Annexure 1 or item 3.2 of Annexure 2;

(g) the franchisor becoming an externally-administered body corporate;

(h) a change in the intellectual property, or ownership or control of the intellectual property, that is material to the franchise system.

(3) For paragraphs (2) (b), (c), (d), (e) and (f), the franchisor must tell the franchisee:

(a) the names of the parties to the proceedings; and

(b) the name of the court or tribunal; and

(c) the case number; and

(d) the general nature of the proceedings.

(4) For paragraph (2) (g), the franchisor must tell the franchisee the name

and address of the administrator, controller or liquidator.

19 　Current disclosure document

(1) A franchisor must give to a franchisee a current disclosure document within 14 days after a written request by the franchisee.

(2) However, a request under subclause (1) can be made only once in 12 months.

20　 　Transfer of the franchise

(1) A request for a franchisor’s consent to transfer of a franchise must be made in writing.

(2) A franchisor must not unreasonably withhold consent to the transfer.

　　 (3) For subclause (2), circumstances in which it is reasonable for a

franchisor to withhold consent include:

(a) the proposed transferee is unlikely to be able to meet the financial obligations that the proposed transferee would have under the franchise agreement; or

(b) the proposed transferee does not meet a reasonable requirement of the franchise agreement for the transfer of a franchise; or

(c) the proposed transferee has not met the selection criteria of the franchisor; or

(d) agreement to the transfer will have a significantly adverse effect on the franchise system; or

(f) the proposed transferee does not agree in writing to comply with the obligations of the franchisee under the franchise agreement; or

(g) the franchisee has not paid or made reasonable provision to pay an amount owing to the franchisor; or

(h) the franchisee has breached the franchise agreement and has not remedied the breach.

(4) The franchisor is taken to have given consent to the transfer if the franchisor does not, within 42 days after the request was made, give to the franchisee written notice:

(a) that consent is withheld; and

(b) setting out why consent is withheld.

21　 　Termination — breach by franchisee

(1) This clause applies if:

(a) a franchisee breaches a franchise agreement; and

(b) the franchisor proposes to terminate the franchise agreement; and

(c) clause 23 does not apply.

(2) The franchisor must:

(a) give to the franchisee reasonable notice that the franchisor proposes to terminate the franchise agreement because of the breach; and

(b) tell the franchisee what the franchisor requires to be done to remedy the breach; and

(c) allow the franchisee a reasonable time to remedy the breach.

(3) For paragraph (2) (c), the franchisor does not have to allow more than 30 days.

(4) If the breach is remedied in accordance with paragraphs (2) (b) and (c), the franchisor cannot terminate the franchise agreement because of that breach.

(5) Part 4 (resolving disputes) applies in relation to a dispute arising from termination under this clause.

22　 　Termination — no breach by franchisee

(1) This clause applies if:

(a) a franchisor terminates a franchise agreement:

(i) in accordance with the agreement; and

(ii) before it expires; and

(iii) without the consent of the franchisee; and

(b) the franchisee has not breached the agreement; and

(c) clause 23 does not apply.

(2) For subparagraph (1) (a) (iii), a condition of a franchise agreement that a franchisor can terminate the franchise agreement without the consent of the franchisee is not taken to be consent.

(3) Before terminating the franchise agreement, the franchisor must give reasonable written notice of the proposed termination, and reasons for it, to the franchisee.

(4) Part 4 (resolving disputes) applies in relation to a dispute arising from termination under this clause.

23　 　Termination — special circumstances

A franchisor does not have to comply with clause 21 or 22 if the franchisee:

　　 (a) no longer holds a licence that the franchisee must hold to carry on the franchised business; or

(b) becomes bankrupt, insolvent under administration or an

externally-administered body corporate; or

(c) voluntarily abandons the franchised business or the franchise relationship; or

(d) is convicted of a serious offence; or

(e) operates the franchised business in a way that endangers public health or safety; or

(f) is fraudulent in connection with operation of the franchised business; or

(g) agrees to termination of the franchise agreement.

Part 4 　Resolving disputes

24 　Definitions

In this Part:

complainant means the person who starts the procedure under clause 29.

parties means the complainant and the respondent in a dispute arising under a franchise agreement or this code.

respondent means the person with whom the complainant has a dispute.

25 　Mediation adviser

A mediation adviser is to be appointed for this Part by the Minister.

26　 　Internal complaint handling procedure

A franchise agreement entered into on or after 1 October 1998 must provide for a complaint handling procedure that complies with clauses 29 and 30.

27 　Code complaint handling procedure

A party to a franchise agreement who has a dispute with another party to the franchise agreement may start the procedure under clause 29.

28 　Choice of procedure

A party to a franchise agreement who has a dispute with another party to the franchise agreement may, at any time, choose to use the procedure under clause 26 or 27.

29 　　Procedure

(1) The complainant must tell the respondent in writing:

(a) the nature of the dispute; and

(b) what outcome the complainant wants; and

(c) what action the complainant thinks will settle the dispute.

(2) The parties should then try to agree about how to resolve the dispute.

(3) For mediation under a franchise agreement:

(a) if the parties cannot agree under subclause (2) within 3 weeks, either party may refer the matter to a mediator; and

(b) if the parties cannot agree about who should be the mediator, either party may ask the mediation adviser to appoint a mediator.

(4) For mediation under this code, either party may ask the mediation adviser to appoint a mediator.

(5) Subject to subclause (5A), the mediator may decide the time and place for mediation.

(5A) Mediation under this code must be conducted in Australia.

(6) The parties must attend the mediation and try to resolve the dispute.

(7) For subclause (6), a party is taken to attend mediation if the party is represented at the mediation by a person who has the authority to enter an agreement to settle the dispute on behalf of the party.

30　 　Mediation under the code

(1) The mediation adviser must, within 14 days after referral under

paragraph 29 (3) (b) or subclause 29 (4), appoint a mediator for the dispute.

(2) After mediation under this code has started, the mediator must tell the mediation adviser, within 28 days, that mediation has started.

30A 　Termination of mediation

(1) This clause applies if:

(a) at least 30 days have elapsed after the start of mediation of a dispute; and

(b) the dispute has not been resolved.

(2) If either party asks the mediator to terminate the mediation, the mediator must do so.

(3) Subject to subclause (2), the mediator may terminate the mediation at any time unless satisfied that a resolution of the dispute is imminent.

(4) If the mediator terminates the mediation of a dispute under this clause, the mediator must issue a certificate stating:

(a) the names of the parties; and

(b) the nature of the dispute; and

(c) that the mediation has finished; and

(d) that the dispute has not been resolved.

(5) The mediator must give a copy of the certificate to:

(a) the mediation adviser; and

(b) each of the parties to the dispute.

31　 　Conditions

(1) This Part does not affect the right of a party to a franchise agreement to take legal proceedings under the franchise agreement.

(2) The parties are equally liable for the costs of mediation under this Part unless they agree otherwise.

(3) The parties must pay for their own costs of attending the mediation.

Annexure 1

Disclosure document for franchisee or prospective franchisee （省略）　

Annexure 2

Short form disclosure document for franchisee or prospective

franchisee（省略