The Franchising Code explained: what franchise buyers should know

If you're thinking about buying a franchise in Australia, one set of rules sits behind every conversation you'll have with a franchisor: the Franchising Code of Conduct. It decides which documents you get and when, how long you have to think, what happens to a marketing fund, and what must happen when the agreement ends.

A new version of the Code started on 1 April 2025, and its last changes became mandatory on 1 November 2025. This guide walks through it in the order you'll meet it: before you sign, while you run the business, at the end of the term, and if something goes wrong.

The short version. The Code is a mandatory industry code under the Competition and Consumer Act 2010, enforced by the ACCC. You get an information statement within 7 days of showing interest, then the disclosure document, the franchise agreement and a copy of the Code at least 14 days before you sign. After you sign, there's a 14-day cooling-off period. Both sides must act in good faith throughout, and there's a set process for disputes.

This is general information, not legal or financial advice.

What is the Franchising Code of Conduct?

The Code is a mandatory industry code made under the Competition and Consumer Act 2010. It applies to everyone involved in franchising in Australia, and the ACCC enforces it.

According to the ACCC, the Code exists to improve standards of conduct in franchising, address the power imbalance between franchisors and franchisees, give buyers better information for their decisions, and provide a fair way to resolve disputes.

An arrangement counts as a franchise when you run a business under someone else's system and brand and pay them for the right, whatever the contract is called.

Which documents do you get before you sign a franchise agreement?

The Code sets out what a franchisor must hand over, and when. Here's the order:

When	What the franchisor must give you
Within 7 days of you showing interest	The ACCC's information statement, before any other document
At least 14 days before you sign	The disclosure document, the franchise agreement in its final form, and a copy of the Code
At least 14 days before you sign, if relevant	Any lease or occupancy details, and any other agreement you must sign as a condition of the franchise
Before you sign, if something changes	Updated documents reflecting any materially relevant change, such as a change of owner or new legal proceedings

The information statement is a short ACCC guide to franchising, its risks and the questions to ask.

The disclosure document is the big one. It sets out the franchisor's background, its finances, the costs of starting and running the franchise, the territory, supply arrangements and what happens at the end of the term. Since 1 November 2025, it must also disclose as much as practicable about any significant capital expenditure you may be asked to make during the agreement, such as a refit, and the franchisor must discuss it with you.

The 14-day disclosure period is a mandatory wait. Once you have the documents in their final form, neither side can enter the agreement for 14 days. Use that time to read everything and take it to a franchise lawyer and an accountant. The franchisor must tell you to get independent advice.

One more check costs nothing: the franchise disclosure register, a free government-hosted register where franchisors must publish their details. The ACCC warns that if a franchisor isn't on it, you should be careful before handing over money or signing anything.

How does the 14-day cooling-off period work?

After you sign a new franchise agreement, you have 14 days to change your mind. If you end the agreement in that window, you must do it in writing, and the franchisor must return your money within 14 days of being told.

The franchisor can keep some of it, but only for reasonable expenses connected with ending the agreement, and only if those expenses, or how they're worked out, are set out in the franchise agreement.

A few details are worth knowing:

Opting out is limited. Since 1 November 2025, you can give up the cooling-off period only if you have, or recently had, a substantially similar agreement with the same franchisor for substantially the same business. A first-time buyer keeps it.
Buying an existing franchise is different. If an agreement is transferred to you, the cooling-off period ends after 14 days or on the day you take control of the business, whichever comes first.
Renewals have no cooling-off period, so read a renewal as carefully as you read the first agreement.

At National Floors, you receive our Disclosure Document and franchise agreement before you sign, and a 14-day cooling-off period applies after you do. Our guide to what a flooring franchise costs explains what the documents will show you about the investment and fees.

What must a franchise agreement include, and what can't it include?

The agreement should cover the fees, the term, use of the brand, required supplies, marketing, selling the business, disputes and how it can end. For agreements made from 1 November 2025, the Code adds two protections:

Compensation for early termination. The agreement must provide for compensation if the franchisor ends it early because it withdraws from Australia, rationalises its network (for example, taking territories back to run as company stores) or changes its distribution model.
A fair chance to recover what you put in. The agreement must give you a reasonable opportunity, during the term, to make back any investment the franchisor requires.

The Code also lists terms a franchise agreement must not contain, including:

Making you pay the franchisor's costs of settling a dispute
Letting the franchisor change the agreement retrospectively without your written consent
A general release of the franchisor from liability
A waiver of statements the franchisor made to you before you signed
Since 1 April 2025, a restraint of trade that applies when the agreement expires and you've sought to renew or extend it

What does the Code say about marketing funds?

Many franchises collect a marketing levy into a shared fund. The 2025 Code calls these specific purpose funds and applies the same rules to funds for technology, training, refurbishment and other shared purposes.

If you must contribute to a fund, the franchisor must:

Keep the money in a separate account and spend it only on the fund's stated purpose
Prepare a financial statement for the fund each year, within 4 months of the end of the financial year, and give it to contributing franchisees within 30 days after that
Give prospective franchisees the most recent statement before they sign
Contribute on the same basis for any company-owned outlets

Paying into a fund doesn't mean your own business must be advertised with that money, so ask how it's spent. At National Floors, the national marketing levy is 2% of gross sales, and the network spends $500K a year on national marketing that sends customers to every showroom.

What happens at the end of a franchise agreement?

Look at the end before you begin. The disclosure document and agreement should tell you the term, whether either side can end it early, whether and how you can sell, and your rights at the end, including any right to renew.

The Code sets out a process for renewal:

End of term notice. At least 6 months before the term ends, the franchisor must tell you whether it will renew or extend the agreement.
Fresh documents. If it will, you get the same documents a new buyer gets, followed by the same 14-day wait.

Good faith doesn't oblige a franchisor to renew, so understand the renewal terms before you invest.

What if there's a dispute with the franchisor?

Every party must act in good faith at all times: in negotiations, while the agreement runs, in disputes and at the end. The ACCC describes good faith as acting honestly and not arbitrarily, and cooperating to achieve the purpose of the agreement. A contract can't exclude it.

If a dispute comes up, the Code sets two steps:

Put it in writing. Send the other party a notice of dispute setting out the problem, the outcome you want and what would settle it.
Follow the process. If you can't agree within 21 days, either side can use the process in the Code or in the agreement, which can include mediation or conciliation.

The Australian Small Business and Family Enterprise Ombudsman can help both sides reach alternative dispute resolution, and in Victoria the Victorian Small Business Commission also helps. The ACCC doesn't act for individual franchisees, but it can take enforcement action against franchisors.

How to use the Code when you're comparing franchises

The Code gives you the right to information. Use it:

Check the franchise disclosure register before any money changes hands.
Ask about significant capital expenditure you may face during the term.
Ask for the latest marketing fund statement.
Read the end-of-term and renewal clauses as closely as the fees.
Talk to current franchisees, and visit trading outlets. Our own process includes due diligence where you visit our stores and meet the leadership team.

If you're weighing up how to start, our guide to a showroom or a van compares the two. If you're looking at regional Victoria, see the open territories, from Geelong to Mildura.

Questions

Is the Franchising Code of Conduct mandatory?

Yes. It's a mandatory industry code under the Competition and Consumer Act 2010, and it applies to everyone involved in franchising in Australia. The ACCC enforces it.

How long before signing must I get the disclosure document?

At least 14 days. The franchisor must give you the disclosure document, the franchise agreement and a copy of the Code at least 14 days before you sign, and neither side can enter the agreement during that period.

Can I get my money back during the cooling-off period?

You can end a new agreement in writing within 14 days of signing, and the franchisor must return your money within 14 days. It can keep reasonable expenses only if the agreement sets them out.

What changed in the 2025 Franchising Code?

The new Code started on 1 April 2025, and further rules applied from 1 November 2025. They include disclosing significant capital expenditure, wider rules for specific purpose funds, compensation for some early terminations, limits on opting out of cooling-off, and more civil penalties.

Does National Floors follow the Code?

Yes. You receive our Disclosure Document and franchise agreement before you sign, and a 14-day cooling-off period applies after you do. Check whether your area is open to start with a discovery call.