Under the Franchising Code of Conduct (the ‘Code’) franchisors are required to annually update
What do you need to do?
You regularly need to update any information in the Disclosure Document that is no longer current post 30 June of each year.
This means that you will need to provide:
- An updated list of existing franchisees and franchised businesses which are currently operating in Australia;
- The details of any franchises that were transferred or terminated, did not extend their franchise agreement or were bought back by the franchisor;
- Updates in relation to any litigation proceedings or intellectual property relating to the operation of the franchise network;
- Either financial statements for the last two completed financial years or an audit report from an independent auditor stating that the franchisor is solvent as of 30 June; and
- An annual financial statement detailing the marketing fund’s receipts and expenses for the last financial year, including payments made by corporate owned/operated outlets, and have that audited.
The marketing fund should operate out of a specific bank account designated for this fund. Such an audit can be waived however if at least 75% of your franchisees have agreed to waive the audit requirement by 30 September each year.
Evidence of such a vote should be available in case ever queried. Also note that corporate owned outlets are obliged to pay the same marketing levy/fee as your franchise agreement requires of the franchisees.
How DCS Lawyers can help?
DC Strategy Lawyers can assist you in complying with your annual requirements, including the following:
- Review and update your Disclosure Document for a fixed fee; and
- Assisting you to obtain the exemption on the audit of the marketing fund.
Don’t Hesitate to Reach Out!
If you would like to learn more about how DC Strategy Lawyers can be of assistance, we are happy to talk. We know that each business is unique and it is not a case of one size fits all. Our initial meetings are an investment on our behalf. We take the time to assess your needs and determine an action plan to move forward together.
Call 1300 993 624 or email@example.com