Last Updated on 29/10/2025 by Damin Murdock
The Australian franchising landscape has undergone significant reform, with a revised Franchising Code of Conduct now in effect as of 1 April 2025. These updates introduce strengthened obligations for franchisors and broadened protections for franchisees. If you’re a party to a franchise agreement, or planning to be, you need to understand how these changes affect your rights, responsibilities, and documentation requirements.
Application of the New Code of Conduct
According to the Australian Competition and Consumer Commission (ACCC) the new franchising code applies to:
- Franchise agreements that are executed, renewed, extended, or assigned on or after 1 April 2025; and
- All conduct associated with those agreements, including the drafting and provision of disclosure documentation to both existing and potential franchisees.
If your business operates under franchise arrangements that fall into this scope, the new rules are already in force and require urgent attention.
Key Changes from 1 April 2025
From the 1st of April 2025, the following changes become mandatory:
- Franchise agreements are now prohibited from containing restraint of trade provisions that take effect after the agreement’s expiration where a franchisee has requested an extension or renewal. The inclusion of such terms may expose franchisors to civil penalties.
- Franchisors can now face significant civil penalties for:
- Incorporating terms within franchise agreements that are expressly prohibited under the new Code; and
- Failing to fulfil the obligations relating to the provision or receipt of prescribed information.
These changes reinforce the need for franchisors to ensure every term in the agreement complies with the new code, and that disclosure practices meet updated standards.
Transition Period: 1 April 2025 – 31 October 2025
The government has introduced a transition period for certain obligations, which must be met by 1 November 2025. During this transition period, franchisors must begin preparing for new requirements but are not yet mandated to comply fully with all the updated rules.
Agreements entered, renewed, extended, or transferred between 1 April and 31 October 2025 must comply with some, but not all of the new provisions. Specifically, agreements must:
- Franchise agreements must ensure that franchisees are afforded a fair and reasonable opportunity to realise a return on their initial investment; and
- Contain express provisions for compensating franchisees in the event of early termination, where specified conditions are met.
Full Compliance Required by 1 November 2025
From 1 November 2025, franchisors must meet the full suite of new obligations, including:
Enhanced Disclosure Requirements
- Comprehensive disclosure of any anticipated significant capital outlays required of franchisees; and
- The obligation to provide supplementary information where franchisees are required to contribute to designated purpose funds.
Fairness and Transparency in Agreements
- Franchise agreements must contain express provisions that afford franchisees a reasonable opportunity to achieve a return on their investment; and
- They must also include clauses providing for compensation in circumstances involving early termination.
These updates in ACCC reflect a broader push for fairness, transparency, and financial viability in franchising relationships.
Managing Disclosure Documents
A key challenge for franchisors under the new code is managing disclosure obligations across two regulatory regimes:
- For agreements before 1 April 2025: Existing disclosure documents still apply.
- For agreements from 1 April 2025 onward: Disclosure documents must comply with the new code.
Although technically required to maintain two versions of disclosure documents, franchisors may opt to use a single, updated disclosure document that complies with the new code. This option is acceptable provided it reflects all the updated requirements, even when issued to franchisees under older agreements.
Final Thoughts
The 2025 changes to the Franchising Code of Conduct represent one of the most significant overhauls in recent years. They aim to create a fairer playing field, enhance financial transparency, and protect the rights of franchisees.
Whether you’re starting a new franchise relationship or reviewing an existing one, now is the time to seek legal guidance. At Leo Lawyers, we are ready to assist you in understanding and navigating these complex changes. Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
