The disclosure document and its 25 numbered items

Section 20(2)Three readers, one document

The Code gives the document three jobs: informing a prospective franchisee deciding whether to sign; informing a franchisee deciding whether to renew an agreement or extend its term or scope; and giving a franchisee current information that matters to running the franchised business. The ACCC adds that disclosure documents must not mislead, and that a franchisor must make sure all the information is true and able to be substantiated.

Sections 20(3) to (6)A fixed shape

The Code allows two layouts. Either the whole document follows Schedule 1’s form and order, headings and numbering, with additional information, where applicable, under the heading “Updates”; or it uses the Schedule 1 headings and numbers for the items that apply, and lists the headings and numbers of the items that do not apply in an attachment.

It must be signed by the franchisor, or by a director, officer or authorised agent of the franchisor, and it must open with a table of contents that follows the Schedule 1 items, gives the page each one starts on, and lists any attached documents. Creating it is a civil penalty provision: 600 penalty units.

Schedule 1All 25 headings

These are the headings as the Code numbers and names them, quoted in full. Each item’s own content is longer; the Code, linked at the foot of this page, holds it.

1. 1“First page
2. 2Franchisor details
3. 3Business experience
4. 4Litigation
5. 5Payments to agents
6. 6Existing franchises
7. 7Master franchises
8. 8Intellectual property
9. 9Franchise site or territory
10. 10Supply of goods or services to a franchisee
11. 11Supply of goods or services by a franchisee
12. 12Supply of goods or services - online sales
13. 13Sites or territories
14. 14Significant capital expenditure, and payments other than payments to agents
15. 15Specific purpose funds
16. 16Financing
17. 17Unilateral variation of franchise agreement
18. 17AArbitration of disputes
19. 17BWays of ending the franchise agreement early
20. 18Term of agreement and arrangements to apply at the end of the franchise agreement
21. 19Amendment of franchise agreement on transfer of franchise
22. 20Earnings information
23. 21Financial details
24. 22Updates
25. 23Receipt”

A closer readSix items, among the 25

Item 1: the first page

The first page carries a set heading in bold upper case, the franchisor’s name, address, phone number and ABN, ACN or ARBN, a signature, the preparation date, and a statement the Code writes out. The statement begins: “Entering into a franchise agreement is a serious undertaking. Franchising is a business and, like any business, the franchise (or franchisor) could fail during the franchise term.”

Item 4: litigation

Among other details: current proceedings in Australia, relevant to the franchise, against the franchisor, a franchisor director, an associate or an associate’s director, alleging matters such as breach of a franchise agreement or unconscionable conduct, and certain workplace proceedings against them. Also any conviction for a serious offence, bankruptcy or insolvency in the last 10 years, any final civil judgment on those matters in the last 5, and the percentage of franchisees in a mediation, conciliation or arbitration in the previous financial year.

Item 6: existing franchises

Numbers, by state, territory or region, of existing franchised businesses, existing franchisees, and businesses in Australia that the franchisor or an associate owns or runs that are substantially the same as the franchised business; and each existing franchisee’s business address (unless it is a home address), business phone number and starting year; above 50 franchises, those details may be limited to the area where the franchise will operate. For each of the last 3 financial years come seven counts, among them franchises transferred, ended by the franchisor, and bought back, with former franchisees’ contact details where available. The ACCC suggests that anyone interested in a franchise speak to current and former franchisees.

Item 14: what it costs to start

The range of costs to start operating, based on current practice, across six matters running from real property to other payments a franchisee makes to begin operating, with working capital among them; and for each payment, what it is, the amount or formula, who receives it, when it is due and whether it is refundable and on what conditions. A document created on or after 1 November 2025 must also state whether significant capital expenditure will be required during the term (items 14(1A) and (1B)).

Item 21: financial details

A statement of the franchisor’s solvency, signed by at least one director, giving the directors’ opinion on whether there are reasonable grounds to believe the franchisor “will be able to pay its debts as and when they fall due”, and financial reports for the last 2 completed financial years, with exceptions the item sets out, such as a solvency statement “supported by an independent audit” from a registered company auditor, or a foreign equivalent for a foreign franchisor.

Item 23: receipt

The last page says the prospective franchisee may keep the document, and carries a form for acknowledging that it was received.

Section 21The yearly update

A franchisor must update the document if, on the first day of a financial year, it is a party to a franchise agreement and it either made 2 or more franchise agreements in the last financial year, or intends to make another in the current one. The update is due within 4 months starting on the first day of that financial year, and brings the document up to the position at the date of the update and into line with any relevant changes to the Code (civil penalty: 600 penalty units). For a financial year starting on 1 July, the ACCC gives 31 October as the due date.

Asking for an updated copy is covered in what the franchisor must tell a franchisee after signing; item 20 has its own guide, earnings information.

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).