Updating Your Franchise Disclosure Document: What You Need To Know

If you’re a franchisor in Australia, your Franchise Disclosure Document (FDD) isn’t a “set and forget” file. It must be accurate, up-to-date and complete before you present it to a prospective franchisee.

Keeping your FDD current isn’t just best practice - it’s a legal requirement under the Franchising Code of Conduct (the Code). Done well, it also builds trust with candidates and reduces the risk of disputes down the track.

In this guide, we’ll walk through when you need to update your FDD, what needs to be included, how to align it with your franchise agreement and key facts sheet, and practical steps to stay compliant throughout the year.

What Is A Franchise Disclosure Document In Australia?

An FDD is a comprehensive pack of information you must give to prospective franchisees before they sign or pay non-refundable money. In Australia, it must follow the format prescribed by the Code (Annexure 1) and come with a Franchising Information Statement and a Key Facts Sheet.

In plain terms, your FDD helps a prospective franchisee understand who you are, how the network operates, the real costs involved, the risks, and how the relationship works. It sits alongside the draft franchise agreement and any lease or license arrangements you propose.

Because franchise systems evolve, the Code requires franchisors to refresh and correct their FDD regularly so it reflects the current reality of the network - not last year’s version of it.

When Do You Need To Update Your FDD?

1) Annually (Within 4 Months Of Your Financial Year End)

The Code requires franchisors to update their FDD at least once a year, within 4 months after the end of the franchisor’s financial year. Most franchisors use 30 June as their year end, which makes 31 October the typical annual update deadline.

This annual refresh is your chance to make sure all fees, litigation disclosures, outlet numbers, supplier arrangements, rebates, marketing fund statements, and solvency declarations are correct for the new disclosure cycle.

2) Before You Offer Or Enter A New Franchise

Whenever you are engaging with a prospective franchisee, the FDD you provide must be current at the time of disclosure. If something materially relevant changes - for example, a significant fee increase or supplier change - update your FDD and Key Facts Sheet before issuing them to the candidate.

3) When A “Materially Relevant Fact” Arises

The Code requires notice to prospective franchisees if a materially relevant fact occurs before entry. Examples include serious civil proceedings, a significant change in ownership or control of the franchisor, closure of a high number of outlets, or a change to the intellectual property used in the network.

If you become aware of a materially relevant fact, update your FDD and provide written notice to any prospective franchisee to whom you’ve already disclosed, before they sign.

What Information Must Your Updated FDD Cover?

The Code’s Annexure 1 prescribes the structure and topics an FDD must include. When updating, work through each section methodically. Key areas to check include:

• Franchisor Details: Corporate details, business experience of directors and officers, and any changes to ownership or control.
• Intellectual Property: Trade marks, brand or system IP used in the network, licensing arrangements, and any changes or disputes. If you’re refreshing brand assets, it’s wise to ensure you register your trade marks in the right classes.
• Litigation: Current or recent civil or criminal proceedings relevant to the franchise system or key people.
• Costs And Fees: Initial fees, ongoing royalties, marketing fund contributions, technology fees, training costs, and any new levies or pass-through charges.
• Supply And Rebates: Approved suppliers, supply restrictions, and any rebates or financial benefits the franchisor or an associate receives (and whether they are shared with franchisees).
• Sites, Territories And Channels: Allocation or protection of territories, multi-unit rights, e-commerce channels, and any changes to how online sales are handled and attributed.
• Marketing Fund: How funds are managed and spent, auditing status, and provision of the annual financial statement to franchisees.
• Significant Capital Expenditure: Any expected major spend required of franchisees during the term (for example, refurbishments or mandated equipment).
• End‑Of‑Term And Restraints: Renewal options, exit procedures, transfer criteria, and restraints of trade that apply after the relationship ends.
• Financial Position: A current solvency statement signed by a director or, if you choose, the franchisor’s audited financial statements.

Make sure the details and figures in your FDD are consistent with the draft franchise agreement, Key Facts Sheet and any marketing fund disclosures you provide. Inconsistencies are a red flag for both regulators and savvy candidates.

How To Update Your FDD Step‑By‑Step

Step 1: Map Out The Changes

Start by listing all changes since your last update: fees, supplier lists, new training requirements, outlets opened/closed, changes to territories, and any marketing fund initiatives.

Talk to internal stakeholders - operations, marketing, finance and legal - so you capture network-wide updates. It’s also a good time to confirm whether your franchise model has shifted (for example, new online ordering processes or centralised fulfilment) and whether that changes franchisee obligations.

Step 2: Refresh Financials And Marketing Fund Statements

Prepare the marketing fund financial statement for the last financial year and arrange an audit if required. Update your solvency statement or financial reports and make sure the numbers align with any figures mentioned elsewhere in the FDD.

Step 3: Align With The Franchise Agreement And Key Facts Sheet

The Key Facts Sheet must be consistent with your FDD and franchise agreement. If you’ve changed a fee or a critical right (like renewal or transfer), update all three documents together to prevent misalignment. A targeted franchise lawyer review can help flag inconsistencies you may not notice in-house.

Step 4: Verify IP And Branding Details

Check that your trade marks, logos and brand names referenced in the FDD match your current registrations and usage. If you’ve rebranded, launched sub-brands or expanded into new product classes, consider filing new applications and reflecting those changes in your FDD.

Step 5: Reconfirm Supplier And Rebate Disclosures

Supplier arrangements evolve. Update your list of approved suppliers, any exclusive supply requirements and your rebate disclosures so they accurately describe how benefits are calculated and whether franchisees receive a share.

Step 6: Finalise, Date And Version‑Control

Insert the correct date, update annexures, and ensure all attachments (for example, sample agreements, policies or lease summaries) are the current versions. Adopt a clear version naming convention and keep a register of when each candidate received disclosure and which version they were given.

Practical Compliance Tips For Franchisors

Keep A Live “Change Log” Year‑Round

Rather than scrambling in October, maintain a simple tracker that records changes as they occur (fees, suppliers, system changes, disputes). This makes the annual update much smoother.

Use Consistent Language Across Documents

Define key fees and concepts the same way in the FDD, franchise agreement and manuals. If your agreement uses a defined term like “Technology Fee”, mirror that wording in your disclosure to avoid confusion.

Refresh Your Early-Stage Documents Too

If you collect leads online, ensure your website has an up-to-date Privacy Policy that covers how you handle franchise enquiries. When you start serious discussions with candidates, use a short Non‑Disclosure Agreement so confidential information is protected, and consider a brief Heads of Agreement where you outline key commercial terms before preparing final documents.

Check Your Franchise Disclosure Register Entry

In addition to your FDD obligations, you must keep your public listing on the Franchise Disclosure Register current with the required details. Treat this as part of your annual disclosure workflow.

Audit Your IP Portfolio

Make sure the brand assets your franchisees use are protected. If new logos or taglines have launched, update your FDD and consider filing additional trade mark classes via your trade mark registration strategy.

What Happens If You Don’t Update Properly?

Non-compliance can be costly. The ACCC can seek penalties, issue infringement notices and require corrective action if you breach the Code. Candidates may also claim they were misled if the information you provided was out-of-date or inconsistent.

Practically, outdated disclosure also slows recruitment. Serious candidates expect transparent, current information. An accurate, polished FDD signals that your system is well-run and reduces the back-and-forth at the contract stage.

How Your FDD Should Work With Your Franchise Agreement

Your FDD and franchise agreement are two sides of the same coin. The disclosure outlines the factual picture and risk profile; the agreement sets the binding terms.

To avoid disputes, make sure:

• Fees match word‑for‑word: If you disclosed a 6% royalty, the agreement shouldn’t say “5% to 7% at the franchisor’s discretion” unless the FDD clearly explains that range and how discretion is exercised.
• Timeframes align: Renewal, refurbishment and training timeframes must match across documents.
• Policies referenced actually exist: If the agreement refers to a “Supplier Approval Policy” or “Social Media Policy”, ensure they are finalised and consistent with your disclosure.

Many franchisors schedule an annual agreement review at the same time as their FDD update, so everything moves forward in sync.

Frequently Missed Items In Annual Updates

• Rebate transparency: Not fully describing how rebates are calculated, who receives them, and whether they reduce franchisee prices.
• New digital channels: Failing to explain how marketplace sales, delivery platforms or brand-level e‑commerce orders are handled and allocated for royalties and territories.
• Significant capital expenditure: Leaving out planned refurb cycles or mandated equipment changes that will hit franchisee cash flow.
• End-of-term clarity: Vague renewal criteria or transfer conditions that don’t match internal policy.
• Solvency statement: Forgetting to include a fresh director’s solvency declaration or updated financials.

Disclosure Timing And Process: What To Give And When

Timing matters under the Code. As a general guide:

• Give the Information Statement to a prospective franchisee as early as practicable.
• Provide the FDD, Key Facts Sheet, draft franchise agreement and lease/occupancy documents at least 14 days before they enter the agreement or pay non‑refundable money.
• If you change the agreement during negotiations in a significant way, provide a summary of the changes within a reasonable time before signing.
• If a materially relevant fact arises after disclosure but before signing, provide written notice and, if needed, updated disclosure.

Internally, document who received what, and when. A simple disclosure log (date sent, version, recipient) goes a long way if timing is challenged later.

An FDD Update Checklist You Can Use

• Confirm your annual update deadline (usually by 31 October if your year ends 30 June).
• Gather network data: outlets, openings/closures, fee changes, supplier updates, marketing initiatives.
• Prepare marketing fund financial statements and arrange audit if required.
• Update solvency statement or financial reports.
• Review and update all Annexure 1 sections, including litigation, IP, costs and end‑of‑term terms.
• Refresh the Key Facts Sheet and ensure it mirrors the FDD.
• Check agreement alignment and organise an agreement review if required.
• Update lead capture documents (e.g. Privacy Policy, enquiry forms) to reflect any new processes.
• Confirm your Franchise Disclosure Register details are current.
• Version, date and issue the updated pack to prospective franchisees from the cut‑over date.

Key Takeaways

• Your Franchise Disclosure Document must be updated at least annually (within 4 months of financial year end) and whenever a materially relevant fact arises.
• Ensure your FDD, Key Facts Sheet and franchise agreement are consistent - fees, timeframes and policies should match across all documents.
• Refresh disclosures on IP, fees, suppliers, rebates, territories, marketing fund and solvency each year so candidates receive an accurate picture.
• Maintain a year‑round change log and strong version control to make the update process straightforward and compliant.
• Protect your system by keeping your trade marks current and using tools like an NDA and Privacy Policy during recruitment.
• Stay on top of your obligations beyond the FDD by keeping your Franchise Disclosure Register entry up to date.

If you’d like a consultation about updating your Franchise Disclosure Document or aligning it with your agreement and Key Facts Sheet, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.