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If you’ve set up a franchise, you’ll know that there are a number of requirements you need to comply with. Laws around franchising can get quite complex, so it’s important to stay on top of your obligations.
One of your main obligations involves your Disclosure Document – this is provided to a person who wants to enter into a franchise agreement, and discloses all the relevant details about your franchise system.
It’s basically your way of being 100% transparent with potential franchisees before they go through with any decisions.
What Is In A Franchise Disclosure Document?
A Franchise Disclosure Document will generally outline key points regarding the franchise system, such as:
- Costs involved in operating the franchise
- Details of current and former franchisees
- Details on any legal proceedings against the franchise
This makes things a lot easier for potential franchisees before they finalise any decisions.
However, as a franchise, you need to update your Disclosure Document every financial year before 31 October. It’s worth getting a lawyer to help you with this as they can assess your current situation and ensure your document accurately represents any recent changes and all the relevant details to the potential buyer.
What Are My Other Obligations?
When it comes to franchises, both the franchisor and the franchisee have a number of obligations dedicated to keeping the business thriving. Some of these include:
- Acting in good faith
- Complying with your Franchise Agreement
- Meeting financial obligations
- Following the appropriate dispute resolution process
So, you want to make sure you are acting in the best interests of the franchise. For example, if you are selling a franchise, you want to get the best price for the business and choose a suitable buyer. You also want to ensure that all the relevant documents are up to date (this includes your Disclosure Document).
The franchisor will provide lots of guidance as to how they expect the business to be run, so franchisees need to ensure they follow this model. A franchise works best where everyone cooperates and works towards the same goals, which are usually made clear by the franchisor at the beginning of the business relationship.
Other obligations for franchises are set out in the Franchising Code of Conduct.
Who Can Update My Disclosure Document?
It’s good business practice to consult a lawyer before making changes to your franchise documents. At Sprintlaw, our lawyers work closely with you to ensure that we tailor our services to your business’ specific needs.
Our Franchise Disclosure Document Update package includes:
- Updating your Franchise Disclosure Document
- Phone consultations with a Sprintlaw lawyer who will advise you on the legal issues that apply to you and your documents
- A complimentary amendment to the final draft we provide you
Need Help?
Updating your Disclosure Document is quick and stress-free with the right legal help. Our lawyers can work closely with you and guide you through the process to ensure you don’t miss any key steps or details.
If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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