Missed the 2025 Franchising Code Deadline? What Franchisors Must Do Now!
- Whelan Lawyers
- Jul 7
- 6 min read
Updated: 2 hours ago
The Australian franchising industry has been transformed by the new Competition and Consumer (Industry Codes—Franchising) Regulations 2024, which came into effect on 1 April 2025. As franchise regulations in Australia tighten, franchisors face significant penalties of up to 600 penalty units for non-compliance. If you haven't updated your franchise agreements and operations yet, immediate action is critical. This franchising compliance guide provides everything Australian franchisors need to know about the new franchise laws 2025 and how to avoid costly penalties.
Understanding the New Franchising Code of Conduct 2025: Key Changes for Franchisors
The new Franchising Code of Conduct has revolutionised franchise regulations in Australia since 1 April 2025. This represents the most comprehensive update to franchise laws in over a decade.
Franchise Compliance Deadlines Australia
1 April 2025: New franchise laws are now in effect for all franchise agreements entered into, renewed, extended, or transferred since this date.
1 November 2025: Final deadline for franchise agreement requirements, including franchisor compensation obligations and franchise disclosure updates (only 4 months remaining).
Immediate Franchise Compliance Requirements for Franchisors
1. Enhanced Civil Penalty Framework for Franchisors
All franchisor obligations under the new Franchising Code of Conduct now carry civil penalty provisions with maximum penalties of 600 penalty units. This represents a significant increase in potential financial consequences for franchise compliance failures, making it essential to review your current practices and ensure full adherence to franchise regulations.
2. Removal of Franchise Key Facts Sheet Requirements
Already in effect: Franchisors are no longer mandated to create, maintain, or provide Key Facts Sheets to prospective franchisees under the new franchise laws. If you're still using Key Facts Sheets, you can immediately stop this practice. Key Facts Sheets uploaded to the Franchise Disclosure Register are no longer viewable to the public.
3. Franchisor Compensation Requirements for Early Termination
Critical Deadline: Starting 1 November 2025, all franchise agreements (except new vehicle dealership agreements) must include provisions for franchisee compensation in cases of early termination under certain circumstances. This franchisor obligation gives you less than 4 months to prepare for compliance.
Immediate Action Required: If you haven't started updating your franchise agreements, work with franchise lawyers immediately to incorporate appropriate compensation clauses before the November deadline.
4. Franchise Return on Investment Requirements
Critical Deadline: The new franchise laws mandate that franchise agreements entered into after 1 November 2025 must provide franchisees with a reasonable opportunity to make a return on their investment during the agreement term. This obligation, previously limited to vehicle dealerships, now applies across all Australian franchise sectors.
Urgent Franchise Compliance Considerations:
Review your franchise fee structures and investment requirements immediately.
Ensure your franchise business model provides realistic profit potential for franchisees.
Document the rationale behind all investment requirements.
Seek franchise legal advice if you haven't already done so.
5. Opt-Out Provisions for Experienced Franchisees
Now Available: Franchisees entering into new or additional franchise agreements with the same franchisor can now opt out of receiving Disclosure Documents and the mandatory 14-day cooling-off period, provided they have a substantially similar existing agreement.
Current Benefits for Franchisors:
Streamlined process for multi-unit developments.
Faster expansion with existing franchisees.
Reduced administrative burden for repeat agreements.
Enhanced Franchise Disclosure Requirements
Franchise Specific Purpose Funds
Marketing and cooperative funds are now consolidated under "specific purpose funds" in the new franchise regulations, which also encompasses conference and IT funds. New franchise disclosure requirements include providing information about the percentage of total income spent on fund administration and auditing costs.
Significant Capital Expenditure Disclosure for Franchises
Franchisors must now disclose whether franchisees will be required to undertake significant capital expenditure during the franchise term. This compliance requirement includes:
Rationale for the expenditure.
Amount and timing requirements.
Expected outcomes and benefits for the franchise business.
Potential risks.
Franchise Litigation Disclosures
Franchise Disclosure Documents must now include information about current proceedings under the Fair Work Act 2009, Independent Contractors Act 2006, or Australian workplace relations laws.
Franchise Restraint of Trade Provisions
The new franchise laws strengthen restrictions on restraint of trade clauses. Instead of making such clauses "have no effect" in specified circumstances, the regulations now prohibit franchisors from entering into agreements containing restraint clauses that would apply in those circumstances.
Important for Franchisors: Violations of this compliance requirement carry civil penalties of 600 penalty units under the new franchise laws 2025.
ASBFEO Powers and Public Disclosure
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) can now publicly identify franchisors who refuse to engage or withdraw from alternative dispute resolution processes. This "name and shame" provision emphasises the importance of maintaining positive relationships with franchisees and engaging constructively in dispute resolution.
Franchise Disclosure Register Changes
Already in Effect: Since 1 April 2025, franchisors can no longer upload Key Facts Sheets or Disclosure Documents to the Franchise Disclosure Register. However, franchisors must now include additional information on their Register profile about:
Serious offences, civil judgments, or insolvency matters involving the franchisor or directors.
Whether franchise agreements provide for arbitration of disputes.
Immediate Action Required: If you haven't updated your Franchise Disclosure Register profile with this additional information, you must do so immediately to ensure franchise compliance.
Critical Franchise Compliance Checklist: What Franchisors Must Do Now
Immediate Actions for Franchisors (If Not Already Completed)
Review Current Franchise Agreements: Assess your standard franchise agreements against new franchise regulations that have been in effect since 1 April 2025.
Update Franchise Disclosure Register Profile: Ensure your profile includes all required additional information.
Train Your Franchise Team: Ensure staff understand the new civil penalty framework and franchising compliance requirements.
Franchise Legal Review: Urgently engage franchise lawyers to review your agreements and practices.
Before 1 November 2025 (Less Than 4 Months Remaining for Franchise Compliance)
Update Franchise Agreements: Incorporate compensation for early termination and reasonable return on investment provisions.
Review Franchise Disclosure Documents: Update to include specific purpose fund and capital expenditure requirements.
Franchise Fund Administration: Ensure specific purpose funds meet new reporting requirements under franchise laws.
Investment Documentation: Prepare supporting materials for franchise investment return calculations.
Warning for Franchisors: Any franchise agreements entered into after 1 November 2025, without the required compensation and return on investment provisions will breach franchise laws and expose you to significant penalties.
Benefits of the New Franchise Laws for Franchisors
While the new franchise regulations introduce additional obligations, they also offer several advantages, including:
Streamlined Franchise Processes: Opt-out provisions for experienced franchisees reduce administrative burden for franchisors.
Eliminated Franchise Requirements: No more Key Facts Sheets reduce compliance costs.
Clearer Franchise Framework: Updated structure and numbering make compliance easier to understand.
Level Playing Field: Enhanced penalties create consistent standards across the franchising industry.
Urgent Need for Franchise Legal Support
Given the complexity of the new franchise laws and the significant penalties for compliance failures, it's essential for franchisors to work with experienced franchise lawyers and advisors immediately. Consider urgently engaging legal professionals who can:
Review and update your franchise agreements before 1 November.
Assess your current practices against regulations already in effect.
Develop compliance procedures and training programs.
Provide ongoing support for franchise operations.
Help you avoid substantial penalties for non-compliance with franchise laws 2025.
Conclusion: Franchise Compliance is Critical
The new Franchising Code of Conduct has been in effect since 1 April 2025, with critical additional regulations coming into force on 1 November 2025. If you haven't already updated your franchise operations, urgent action is required to avoid significant penalties of up to 600 penalty units for each breach (that’s over $198,000 per breach as of July 2025).
With less than 4 months remaining until the November deadline, franchisors must prioritise updating their agreements and disclosure documents. The key to avoiding compliance issues lies in immediate action, professional guidance, and a commitment to fair dealing principles that underpin the franchise relationship.
Don't wait: Every day of delay increases your risk of non-compliance and potential penalties. Start your review immediately if you haven't already done so.
Disclaimer: This compliance guide provides general information only. Always seek professional legal advice specific to your circumstances.
At Whelan Lawyers, we’re helping franchisors across Australia:
Audit and update their Disclosure Documents.
Revise franchise agreements in line with the 2025 Code.
Ensure they meet their obligations under Australian franchising law.
Update your franchisor disclosure register profile.
We combine practical legal advice with deep franchising knowledge, whether you're running a food franchise, professional service brand, retail franchise brand, home services, or emerging franchise network.
If you’ve missed the deadline, don’t panic - but don’t wait either.
Get in touch with Whelan Lawyers to book a fast, fixed-fee compliance review and avoid regulatory headaches.