From 1 July 2010 Australian franchisors will have to comply with expanded disclosure requirements to prospective franchisees, meaning they must make changes to their disclosure documents and must also begin collecting new types of information reports Australian Law Firm Clayton Utz.
The old disclosure requirements will still apply to existing franchisees.
The new disclosure regime will apply to franchise agreements entered into on or after 1 July 2010, which raises a practical problem for franchisors.
They will have to handle two forms of disclosure documents – the current form must be provided annually and upon request to existing franchisees, but the new one to prospective franchisees.
Franchisors will need to give more information on:
Franchisors will now have to tell franchisees, at least six months before the franchise agreement ends, whether the franchise agreement will be renewed or not.
This period drops to one month if the franchise agreement is for less than six months.
FOR MORE INFO – read the full Clayton Utz article.