Franchise terms glossary: your disclosure document explained

Franchise documents use words with specific meanings. This glossary explains them in plain English, in A to Z order within each group, drawing on the Franchising Code of Conduct itself.

The short version. The "franchise code" is the Franchising Code of Conduct, the mandatory rules for franchising in Australia. The current Code started on 1 April 2025. It covers the documents you get, the 14-day waiting and cooling-off periods, and disputes.

This is general information, not legal or financial advice.

What does "franchise code" mean?

The Franchising Code of Conduct is a mandatory industry code under the Competition and Consumer Act 2010. The current Code is Chapter 2 of the Competition and Consumer (Industry Codes—Franchising) Regulations 2024, on the Federal Register of Legislation. The ACCC enforces it.

It applies to franchise agreements entered into, transferred, renewed or extended from 1 April 2025. Older agreements stay under the old Code until they end or are transferred, renewed or extended. Our Franchising Code guide walks through it in order.

Who and what does the Franchising Code cover?

Franchise agreement. The contract. Under the Code, it gives you the right to run a business under the franchisor's system and brand, in return for payments to the franchisor, whatever they're called. See the franchise agreement explained.
Franchisor, franchisee and prospective franchisee. The franchisor grants the right and runs the system, and the franchisee buys it. A prospective franchisee is anyone dealing with a franchisor to get a franchise, or buying an existing one.
Good faith. Each party, including someone negotiating to join, must act in good faith. A court may ask whether they acted honestly, not arbitrarily, and cooperated to achieve the agreement's purposes.

Which documents and time limits apply before you sign?

Cooling-off period. You usually have 14 days after signing a new franchise agreement to end it. The franchisor must repay your payments within 14 days, keeping only reasonable expenses the agreement sets out. It doesn't end other agreements, such as a lease or loan.
Disclosure document. The franchisor's signed document, in the form and order set by Schedule 1 of the Code, covering its background, legal cases, territory, supply, costs, funds, financing, ending the agreement and finances. Franchisors taking on new franchisees must update it each year.
Franchise Disclosure Register. A free public online register of franchisors, kept by the ACCC, where they must list basic details such as their name, ABN, address and industry. Since 1 April 2025 it no longer shows disclosure documents.
Independent advice statements. The franchisor must hold, before signing, for each of an independent lawyer, business adviser and accountant, that adviser's signed statement that they advised you, or your own signed statement that you had the advice or chose not to.
Information statement. The ACCC's guide to the risks and rewards of franchising and the questions to ask. The franchisor must give it to you within 7 days of you applying or showing interest, before the agreement and disclosure document.
Key facts sheet. A separate document the old Code made franchisors create, maintain and provide. It was removed on 1 April 2025, and its information now sits in the disclosure document.
Waiting period. Also called the consideration period. The franchisor can't sign until 14 days after it gives you the final documents. The 14 days restart if it changes the agreement, other than at your request or for routine updates, corrections and minor clarifications, or gives you performance figures later. They're calendar days, not business days.

What do the money terms mean?

Establishment costs. The range of costs to start the business that the disclosure document must list: property, fit-out and equipment, opening stock, deposits, licences, insurance and working capital before opening. At National Floors, the estimated total investment is $318,200 to $606,750 + GST, depending on your site and fit-out. See what a flooring franchise costs.
Financing. If the franchisor, its agent or an associate offers you finance, the disclosure document must set out the material conditions, such as any minimum unborrowed working capital. National Floors doesn't offer financing, but you can talk to third-party lenders.
Gross sales. What percentage fees are worked out on. The Code doesn't define it, so check how your agreement does.
Performance figures. Figures a franchisor gives you about how a franchise has performed or might perform (item 20). They must be in the disclosure document or an attachment, with the facts and assumptions behind any forecast. If none are given, the document must say results vary and can't be estimated.
Prepayment. A payment a franchisor asks for before you sign. The disclosure document must say why, how it will be used and when it's refundable. If you pay during the waiting period, you can ask for it back in writing, and it must be repaid within 14 days.
Rebate. Money a franchisor or its associate gets from a supplier you buy from. The disclosure document must say whether it gets any, from whom, usually how much as a percentage of purchases, and whether it's shared with franchisees.
Royalty. An ongoing fee, usually a percentage of sales, paid to the franchisor for the brand, system and support. At National Floors, the royalty is 6% of gross sales, and it isn't charged on jobs Head Office refers to you.
Significant capital expenditure. A big spend the franchisor may require during the term, such as a refit. From 1 November 2025 the disclosure document must say whether you'll face one and, where it can, why, how much, when and the risks. The franchisor can only require spending that was disclosed, that most franchisees approve, that the law requires or that you agree to.
Specific purpose fund. A fund the franchisor or an associate controls, that you must pay into and that must be used for a specified common purpose, such as marketing or technology. The administrator must keep a separate account and give contributors an annual financial statement, usually audited. At National Floors, the national marketing levy is 1% of gross sales and is paid into a Specific Purpose Fund. Local marketing is at least $2,500 a month, which you spend yourself.

What do territory and supply terms mean?

Supply arrangements. What you must buy and from whom: stock levels, limits on using other suppliers and any franchisor interest in a supplier.
Territory. The area or site you're licensed to trade in. The disclosure document must say whether it's exclusive, whether the franchisor or others can run the same kind of business there, whether the franchisor can change it, and whether unrelated businesses could compete. At National Floors, it's a non-exclusive Local Marketing Area set in your franchise agreement. See the open territories.
Unilateral variation. A change the franchisor makes to the agreement without your agreement. The disclosure document must describe when it has done so in the past three financial years and when it may. It can't do so retrospectively without your written consent.

What do renewal, selling and ending terms mean?

Compensation for early termination. For agreements entered into, renewed, extended or transferred from 1 November 2025, the agreement must provide compensation, and say how it's worked out, if the franchisor ends it early because it leaves Australia, rationalises its network or changes how it distributes.
Goodwill. The value in a business's customers, name and reputation. The disclosure document must say what rights you have to goodwill you build, and whether you'd be compensated if the agreement isn't renewed.
Renewal and extension. The term is how long the agreement runs. Renewal is using an option in the agreement. Extension is any other lengthening of the term, or a material change to its scope. The franchisor must say at least six months before the term ends whether it will extend, sign a new agreement or do neither.
Restraint of trade. A clause stopping you running a similar business for a time or in an area after the agreement ends. The disclosure document must say if there is one, and the Code limits it after a refused renewal in some circumstances.
Termination. Ending the agreement early. The disclosure document summarises each side's rights, and the Code sets notice rules: for most breaches, written notice and reasonable time to fix it.
Transfer. Selling your franchise to a buyer. The franchisor mustn't unreasonably withhold consent, and is taken to consent if it hasn't refused in writing within 42 days. It may reasonably refuse a buyer who doesn't meet its selection criteria. See buying an existing business.

How are franchise disputes settled?

ADR (alternative dispute resolution). Mediation or conciliation led by a practitioner. Both sides must attend and try to resolve the dispute, and share the costs equally unless they agree otherwise. The Australian Small Business and Family Enterprise Ombudsman can appoint the practitioner, and can publicise a franchisor that refuses to take part.
Notice of dispute. A written notice setting out the problem, the outcome you want and what would fix it. The parties then try to agree, and after 21 days either side can refer the dispute to ADR.

What changed from the old Code?

Treasury and the government's explanatory statement list these main changes:

Term or rule	Old Code	Current Code
Key facts sheet	Franchisors had to create, maintain and provide one	Removed
Marketing funds	"Marketing or other cooperative funds"	One term, specific purpose fund, covering marketing, technology and other funds
Payments in the waiting period	No repayment rule	Repayable on written request within 14 days
Early termination compensation	Rules for new vehicle dealerships only	Apply to all franchise types, for agreements made, renewed, extended or transferred from 1 November 2025

Questions

What is a disclosure document in franchising?

It's the franchisor's signed document that helps you make a reasonably informed decision. You must get it at least 14 days before the franchisor can sign.

What's the difference between the waiting period and cooling off?

The waiting period is the 14 days before the franchisor can sign. Cooling off is usually the 14 days after you sign a new agreement, when you can end it.

Where can I read the Franchising Code itself?

On the Federal Register of Legislation, as the 2024 Franchising Regulations. At National Floors, you receive the Disclosure Document, the franchise agreement, a copy of the Code, leasing information and related agreements at least 14 days before you sign, and a 14-day cooling-off period applies after you do. Check whether your area is open.