About Franchising

Franchising, as a method of doing business, has achieved tremendous worldwide growth in recent years. In Australia, some sources estimate that there are about 1,200 franchise systems operating*. At The Franchise Lawyer, we suspect this figure is considerably higher. The Franchise Disclosure Register, for example, contains more than 2000 profiles of franchise systems as at March 2025.

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 additional infrastructure and personnel. Because franchisees are, to some extent, independent business operators with a direct interest in the performance of the business, it also promotes better outcomes overall for the business network. For franchisees, franchising provides a ready-made business system and the benefits that can flow from the pooling of resources.

All the laws that generally apply to commerce, including 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. The Code changes regularly. The latest version was introduced in 2024 and takes effect on 1 April 2025.

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

*The Franchise Council of Australia website as at March 2025.