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Franchisors must disclose extra information when there is a lease or other agreement related to the franchise.
Leasing agreements
The franchisor must give the franchisee additional information if:
- the franchisee is to lease or sublease premises from the franchisor or an associate of the franchisor
- the franchisee is permitted by the franchisor or an associate of the franchisor to occupy premises without a lease agreement.
The information a franchisor must disclose depends on the specific circumstances. Franchisors should seek legal advice if they are unsure of their obligations.
The information that franchisors must disclose can include:
- a copy of the lease
- a copy of the occupancy agreement, if relevant
- information that the lessor must give a lessee under the relevant state or territory retail tenancy laws
- information about any incentive or financial benefit that the franchisor or their associate gets because of the lease or occupancy arrangement.
The franchisor must give these to:
- prospective franchisees at least 14 days before entering into a franchise agreement
- franchisees within one month after the signing of the agreement or occupation (if there is no agreement), or within 7 days after receiving the request from the franchisee.
Other agreements related to the franchise arrangement
Franchisors must give prospective franchisees extra information when there are other agreements related to the franchise arrangement.
This includes agreements for people involved in the franchise business, such as directors.
The franchisor must give copies of these agreements when:
- they become available, or
- 14 days before a franchise agreement is signed.
Examples of other agreements
- Hire purchase agreement
- Guarantee or loan agreement
- Confidentiality agreement
- Lease, other than a lease of the franchise premises
- Agreement not to compete within an area or for a time after the franchise agreement is terminated.