General information about the Franchising Code of Conduct, not legal or financial advice. Dotto is not a franchisor, a franchise broker or a lawyer. The Code and the ACCC’s pages on extending an agreement and on significant capital expenditure are the places to check. The ACCC regulates the Code.
Read from the Code as compiled on 21 October 2025 (Compilation No. 1, the version in force when it was read on 10 October 2026).
Sections 97 and 98Which rule applies from when
Each rule applies to agreements entered into, transferred, renewed or extended on or after the date shown.
| Rule | Section | Applies from |
|---|---|---|
| End-of-term notice | 36 | 1 April 2025 |
| Restraint of trade after a refused renewal | 42 | 1 April 2025 |
| Compensation for early termination | 43 | 1 November 2025 (s 97(3)) |
| Reasonable opportunity to make a return | 44 | 1 November 2025 (s 97(3)) |
| Discussing disclosed capital expenditure | 47 | 1 April 2025 |
| Capital expenditure a franchisor may require | 60 | 1 April 2025 |
| Capital expenditure in the disclosure document | 20(4); Schedule 1, items 14(1A) and (1B) | Not required in a document created before 1 November 2025 (s 97(7)) |
An agreement that already existed before 1 April 2025 stays under the old 2014 regulations until it ends or is transferred, renewed or extended (s 98).
Section 36The end-of-term notice
The notice must say whether the franchisor intends to extend the agreement, enter into a new franchise agreement with the franchisee, or do neither. For a term under 6 months, it is due at least 1 month before the end. If the franchisor intends to extend, the notice must also say that the franchisee may ask for a disclosure document under s 32, which allows one request every 12 months (civil penalty: 600 penalty units each). These notice rules do not apply to a new vehicle dealership agreement, which Part 6 of the Code covers instead.
The ACCC is plain that franchisees are not automatically entitled to a further term. Where the franchisee has no option to renew, the disclosure document must already say so in bold 12 point type: “The franchisee does not have the option to renew the franchise agreement. At the end of the franchise agreement, the franchisor may, but does not have to, extend the term of the agreement. If the franchisor does not extend the term of the agreement, the franchise agreement ends and the franchisee no longer has a right to carry on the franchised business.”
Section 42Restraint of trade after a refused renewal
A franchisor must not enter into an agreement that includes a restraint of trade clause, whether in the agreement itself, in a document physically attached to it, or in a document it incorporates by reference, that would apply if all of these happen (civil penalty: 600 penalty units):
- the agreement expires;
- it gave the franchisee an option to renew or extend;
- before expiry, the franchisee gave written notice seeking renewal or extension on substantially the same terms as the franchisor’s current agreement and those that apply to other franchisees or would apply to a prospective one;
- before expiry, the franchisee met the agreement’s conditions for renewal or extension;
- just before expiry, the franchisee was not in serious breach of the agreement or a related agreement;
- during the term, the franchisee did not infringe the franchisor’s intellectual property or a confidentiality agreement with it;
- the franchisor did not renew or extend;
- either the franchisee claimed compensation for goodwill and received only a nominal amount that was not genuine compensation, or the agreement did not allow a goodwill claim at all.
A clause is caught if it would apply where all eight have happened.
Sections 43 and 44If the franchisor withdraws
An agreement entered into, transferred, renewed or extended on or after 1 November 2025, other than a new vehicle dealership agreement, must provide compensation if it is ended before it expires because the franchisor withdraws from the Australian market, rationalises its networks in Australia, or changes its distribution models in Australia. It must say how that compensation is worked out, referring specifically to lost profit, unamortised capital expenditure the franchisor asked for, the lost chance to sell established goodwill, and winding-up costs. For the same three reasons, it must also provide for the franchisor to take back, and buy back or compensate for, stock the franchisor specified, and essential specialty equipment, branded product or merchandise that “cannot be repurposed for a similar business”. And it must not exclude compensation the franchisee may be owed outside the agreement when it ends early other than for the franchisee’s breach.
The agreement must also give the franchisee “a reasonable opportunity to make a return, during the term of the agreement, on any investment required by the franchisor” (s 44). The ACCC says this does not mean the franchisor guarantees the profitability or success of the business. Both sections carry civil penalties of 600 penalty units.
Sections 20(4), 47 and 60Significant capital expenditure
The ACCC’s likely examples: major store refurbishments and fit outs, relocations, rebranding, and equipment, software or technology upgrades. The disclosure document must state whether the franchisor will require any during the term, with as much information as practicable about its rationale; its amount, timing and nature; its anticipated outcomes and benefits; and its expected risks. Before entering into, renewing or extending an agreement, the two sides must have discussed that expenditure and how the franchisor considers it is likely to be recouped, “having regard to the geographical area of operations” of the franchisee (s 47).
During the term, a franchisor may require significant capital expenditure only if it is one of these (s 60, civil penalty: 600 penalty units):
- expenditure disclosed under s 20(4) in a disclosure document given before the latest entry into, renewal of, or extension of the term or scope of, the agreement;
- expenditure to be incurred by all or a majority of franchisees and approved by a majority of them;
- expenditure the franchisee incurs to comply with legislative obligations;
- expenditure the franchisee agrees to.
Ending before the term is up: when a franchisor may end the agreement early. Item 14 among the others: the disclosure document and its 25 items.