Disclosure Document – An Overview

If you are browsing through our franchise opportunities, you may be wondering how you can find out more about the entities you may be investing in. 

Of course, you are able to ask for more information from all of the franchises on FranchiseDirect.com.au. However, if you are past that stage and you think that the time is right to take this journey onto its next step, then you might be about to request or receive a franchise disclosure agreement. 

This is a document that all franchisors are legally required to provide potential franchisees. A disclosure document exists to provide potential franchisees with all the information they require of a franchise system, so they can make an educated decision whether they want to enter into a franchise agreement, based on the current and historical circumstances of the franchise. 

All franchisors are required to maintain a disclosure document and it must be provided to a potential franchisee who is considering entering, or renewing a franchise agreement. 

The disclosure must be updated annually, within four months of the end of each of the franchisor’s financial year. 

These are some of the details that franchisors are required to disclose; 

• Details of certain types of legal proceedings involving either the franchisor or its directors
• Contact details of current and former franchisees (unless a franchisee has made a request that these details are not shared) 
• Details of the expenditure involved in starting and operating the franchise business, as well as any other financial payments which are required. 
• Details of the arrangements that will be in place when the franchise agreement comes to an end. 

The ACCC has developed a model disclosure document, with tips on how to fill in the details, to assist you to fulfill your disclosure obligations under the Franchising Code of Conduct.

This model disclosure document is available for download at: Franchisor compliance manual.