Franchise Disclosure Threshold Check
This is a threshold check for whether an arrangement is a franchise under the Franchising Code of Conduct (Schedule 1 to the Competition and Consumer Regulations 2010 (Cth)). Answer the four definition elements and it indicates whether the Code applies, whether disclosure is required, and whether the 14-day cooling-off and 7-day disclosure rules bite. This is a threshold check — not legal advice.
What this calculator does
The Franchising Code of Conduct captures many commercial arrangements that people do not think of as franchises — license deals, dealership agreements, and distributor arrangements can all fall within the statutory definition. This tool walks through the four-element test and flags the disclosure, cooling-off, and good faith obligations that follow.
Legal basis
The Franchising Code of Conduct is a prescribed industry code under s 51AE of the Competition and Consumer Act 2010 (Cth). It sits in Schedule 1 to the Competition and Consumer (Industry Codes—Franchising) Regulations 2014. The 2024 rewrite (effective 1 April 2025) consolidated the Code. Breach is enforceable by the ACCC with civil penalties up to $10m per contravention.
How the calculation works
If all four elements are "Yes" — (1) right to carry on a business, (2) under a system substantially determined by the franchisor, (3) under a franchisor trade mark, (4) for a fee — the arrangement is a franchise under cl 5 of the Code. The franchisor must provide a disclosure document, key facts sheet, and the Code at least 14 days before the franchisee signs or pays (cl 16). A 14-day cooling-off period applies (cl 26). Motor vehicle dealerships attract additional obligations in Part 5 of the Code.
Interactive calculator coming soon
A café licence that grants the right to use a branded system, under the licensor’s operations manual, for an annual fee of $15,000 — all four elements are likely met, and the Franchising Code applies. The licensor must provide a disclosure document 14 days before signing, and the franchisee has a 14-day cooling-off right.
In the meantime, use the worked example above to validate your figures and confirm the final amount with the relevant revenue office or authority before relying on it in a matter.
Start free trialWhat you fill in
- Grants a right to carry on a business? (select): Required
- Supply under a system/marketing plan substantially determined or controlled by the franchisor? (select): Required
- Business conducted substantially under a trade mark / brand owned by the franchisor? (select): Required
- Franchisee required to pay (or agree to pay) a fee? (select): Required
- Motor vehicle dealership arrangement? (select): Required
Limitations
- This is a threshold check, not a legal opinion — borderline cases need a franchise lawyer
- Does not model the exclusions in cl 5 (arrangements under a security, single-supplier, or genuine agent arrangements)
- Does not calculate damages or civil penalty exposure for breach
- Does not generate the disclosure document, key facts sheet, or franchise agreement
- Does not model international master franchise or sub-franchise disclosure interactions
What to do next
If the Code applies, the franchisor must prepare: (1) a disclosure document in the form required by the Code, (2) a key facts sheet, (3) the Code itself, and (4) the franchise agreement. All four must be provided at least 14 days before signing or payment. Quillio drafts franchise disclosure packs and reviews incoming franchise offers for prospective franchisees — see /practice-areas/commercial-lawyers.
Calculator FAQs
What is the four-element test?
Under cl 5 of the Franchising Code, an arrangement is a franchise if: (1) the franchisor grants the franchisee a right to carry on a business, (2) supplying goods/services under a system substantially determined or controlled by the franchisor, (3) substantially associated with the franchisor’s trade mark, and (4) for a fee.
What counts as a system?
A system includes an operations manual, branding guidelines, marketing requirements, pricing rules, or territory restrictions — anything where the franchisor substantially determines how the business is run.
What is the 14-day rule?
Under cl 16 of the Code, the franchisor must provide the disclosure document, key facts sheet, the Code, and the proposed franchise agreement at least 14 days before the franchisee signs or pays any non-refundable amount.
What is the cooling-off period?
Under cl 26 of the Code, a franchisee has 14 days after signing or making a non-refundable payment to terminate the franchise agreement. Motor vehicle dealerships have longer cooling-off in Part 5.
What are the penalties for breach?
Since the 2024 rewrite, key provisions carry civil penalties of up to $10m (or 10% of annual turnover, or 3× benefit obtained) per contravention, enforceable by the ACCC under the Competition and Consumer Act 2010 (Cth).
Does the good faith obligation apply?
Yes — cl 11 of the Code imposes a statutory good faith obligation on both parties, which overrides contrary contract terms and cannot be excluded.
Is this legal advice?
No — it is a threshold check. Franchise disclosure is technical and breach is penalty-exposed. Always engage a franchise lawyer before drafting or signing.
Get help with the matter
For commercial lawyers advising franchisors or prospective franchisees, Quillio drafts disclosure documents, key facts sheets, and franchise review memos — mapping the agreement against the Code’s requirements in minutes. See /practice-areas/commercial-lawyers.
This tool is a threshold check, not a legal opinion. The Franchising Code of Conduct carries civil penalties of up to $10m per contravention. Always engage a franchise lawyer before signing or offering a franchise agreement.
Quillio handles the next steps.
The calculator gives you the number. Quillio handles the rest of the matter — drafting, review, research, and correspondence. The free trial requires no credit card.
Start your free trial