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About Franchising

Franchising, as a method of doing business, has achieved tremendous worldwide growth in recent years. In Australia, survey results published in 2016 estimated that there were about 1,120 franchise systems operating in Australia*.  At The Franchise Lawyer, we suspect this figure is considerably higher.

Compared to other forms of carrying on business, franchising has many attractions.  For a franchisor, it allows the growth of its business system without the investment required for the whole of the infrastructure.  It also promotes incentive for the individual business operators to perform well.  For franchisees, franchising allows a measure of business independence but with a ready-made system and the benefits that can flow from the pooling of resources.

All the laws that generally apply to commerce, for instance contract and trade practices laws, apply to franchising in Australia, but in addition, since 1998 franchising has been specifically regulated.  The Trade Practices (Industry Codes - Franchising) Regulations 1998 came into full effect on 1 October 1998 and introduced a Franchising Code of Conduct that must be followed by franchisors and franchisees in their dealings with one another. Following a lengthy review which began in 2013, the Code was revised and a completely new Code came into effect on 1 January 2015.

It is essential to have a good grasp of the Code in its current form to operate legally in the franchising sector.

*'Franchising Australia 2016', a study conducted by Griffith University and sponsored by the Franchise Council of Australia.

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