Many people buying a franchise assume the agreement is standard and non-negotiable. It is not. A franchise agreement is a detailed commercial contract, and the disclosure documents that come with it can run to hundreds of pages covering territory rights, fees, restraint of trade clauses and what happens when the relationship ends.
Under Australia's Franchising Code of Conduct, a franchisor must give a prospective franchisee a disclosure document, the franchise agreement in final form, and a copy of the Code at least 14 days before the agreement is entered into, according to the ACCC. That mandatory period exists so the franchisee can take independent legal and financial advice before committing.
Our lawyers in Springfield help clients across Greater Springfield and Ipswich with franchise agreement reviews and business purchase matters.
Here is how franchise legal work generally operates in Queensland, and what the disclosure and cooling-off rules mean in practice.
Key takeaways
- A franchisor must give disclosure documents at least 14 days before signing.
- A new franchisee can terminate within 14 days of signing the agreement.
- Independent legal advice is required before a binding financial agreement takes effect.
This article is general information only and is not legal advice. Every situation is different, and you should speak with a solicitor about your own circumstances.
What does the Franchising Code of Conduct require in Queensland?
A franchisor operating in Queensland must comply with the Franchising Code of Conduct, a mandatory industry code enforced by the ACCC. The Code sets out minimum obligations for disclosure, the cooling-off period and dispute resolution that apply across Australia, regardless of what state a franchisee is based in.
The disclosure document must identify the franchisor, describe the franchise system and territory, set out all fees and recurring payments, and describe any specific purpose funds the franchisee contributes to, according to the ACCC. It must also state whether the territory is exclusive, non-exclusive or limited to a site, and whether the franchisor may change it.
The key pre-signing obligations the ACCC sets out include:
- › Information statement: given within 7 days of a prospective franchisee showing interest, before any other document.
- › 14-day period: the franchise agreement in final form, the disclosure document and a copy of the Code must be given at least 14 days before the agreement is entered into. No agreement can be signed during that period.
- › Independent advice: the franchisor must tell the prospective franchisee to obtain independent legal, business and accounting advice.
- › Leasing information: where the franchisee leases or occupies premises from the franchisor or an associate, that information must also be given before signing.
- › Materially relevant facts: changes of control, legal proceedings, insolvency events and intellectual property changes must be disclosed in writing to prospective franchisees before signing.
A new Franchising Code of Conduct commenced on 1 April 2025, with remaining rules becoming mandatory from 1 November 2025, according to the ACCC.
What does a franchise agreement actually cover?
A franchise agreement is a long-term commercial contract that defines the entire relationship between the franchisor and franchisee. Understanding what it covers is essential before signing, because many of its terms operate long after the business is up and running.
Key areas the ACCC says a franchise agreement addresses include:
- › Territory rights: whether the territory is exclusive, non-exclusive or site-limited, and whether the franchisor can compete online or change the territory.
- › Fees and payments: every recurring and one-off payment, who is paid, when it is due and whether it is refundable, including any contributions to specific purpose funds.
- › Changing the agreement: after signing, the franchisor generally cannot change the agreement unless the franchisee agrees or the agreement allows it. The franchisor cannot make retrospective changes without the franchisee's written agreement.
- › Capital expenditure: any significant capital expenditure required of the franchisee must be set out in the disclosure document, with its rationale, amount, timing and nature.
- › Dispute resolution: a written notice of dispute is the first step. If unresolved within 21 days, either party can refer it to mediation or conciliation, according to the ACCC.
What is the cooling-off period for a franchise agreement?
A franchisee may terminate a new franchise agreement within 14 days of entering into it, in writing, according to the ACCC. Money paid must be refunded within 14 days of termination, less any reasonable expenses set out in the agreement.
The cooling-off rules the ACCC sets out also cover:
- › Transferred agreements: a new franchisee taking over an existing agreement may terminate by the earlier of 14 days after becoming the franchisee or taking possession and control.
- › Lease information: where the franchisee also takes on a lease of premises from the franchisor or an associate, a further termination right exists within 14 days of receiving the leasing information.
- › Opting out: from 1 November 2025, a franchisee may opt out of the cooling-off period in writing, but only where they have or recently had a substantially similar agreement with the same franchisor.
- › Renewals: renewals and extensions of an existing agreement carry no cooling-off right.
How does a solicitor help with a franchise in Queensland?
Step 1: Talk to us
Get in touch and we'll explain how the franchise review process generally works and what the next steps look like.
Step 2: Review the disclosure documents
We review the franchise disclosure document, the franchise agreement in final form, and any leasing information given to you during the 14-day period, checking the terms against the Code's requirements.
Step 3: Advise on the key terms
We identify any terms that carry particular risk or that differ materially from what the disclosure document describes, and explain what the restraint of trade provisions, specific purpose fund obligations and end-of-agreement terms mean in practice.
Step 4: Support you through the transaction
If the franchise involves buying an existing business or taking on a lease, we can handle the associated legal work, including due diligence on the business assets and the commercial lease review, through our conveyancing and commercial team.
| Get in touch Need help with a franchise agreement? We're an experienced team who keep you well informed at every stage of the process. Get in touch to discuss your needs. |
What does the unique piece look like when a franchise ends?
Most prospective franchisees focus on the entry conditions. The end-of-agreement terms deserve equal attention, because they govern what a franchisee can and cannot do once the relationship is over.
Under the Franchising Code of Conduct, the ACCC sets out that a franchisor must give an end-of-term notice at least 6 months before the term ends, or at least one month if the term is under 6 months. The franchisor is not obliged to renew unless the agreement says so. A franchisee wanting to exit early generally has very limited rights: they may make a written proposal stating reasons, and the franchisor must respond substantively within 28 days, according to the ACCC.
Restraint of trade provisions are another area where the end of the agreement matters as much as the beginning. A franchisor must not include a restraint of trade clause that would apply after the agreement ends where the franchisor chose not to renew an option, the franchisee had given written notice to renew on substantially current standard terms, met the renewal conditions and was not in serious breach, and could not claim goodwill compensation or received only a nominal or inadequate amount, according to the ACCC. Any restraint must not be unfair or go beyond what is reasonably necessary to protect the franchisor's legitimate interests.
Compensation obligations also apply in some circumstances. From 1 November 2025, franchise agreements must provide compensation where the franchisor withdraws from Australia, rationalises its network or changes its distribution model, covering lost profit, unamortised capital expenditure, goodwill and winding-up costs, according to the ACCC.
What are the common misunderstandings about franchise agreements in Queensland?
One common misunderstanding is that a franchise agreement can be negotiated freely, like a standard commercial contract. The Code sets minimum protections that apply regardless of what is in the agreement, but the agreement itself may contain terms well beyond those minimums, and not all of them favour the franchisee. The Code's 14-day period exists precisely to allow independent review before the agreement becomes binding.
Another misunderstanding concerns the register. From 1 April 2025, franchisors must be on the public Franchise Disclosure Register at least 14 days before entering into any agreement and must update it annually, according to the ACCC. A prospective franchisee can check whether the franchisor is registered before the 14-day period begins.
"A franchise agreement is not a standard form document you sign on the day. The Code's 14-day period exists so a prospective franchisee can take proper legal advice before committing to a long-term commercial relationship."
Jade Kickbusch, Principal, Brookwater Legal
Frequently Asked Questions
What disclosure documents must a franchisor give in Queensland?
The franchisor must give the prospective franchisee a disclosure document, the franchise agreement in final form, and a copy of the Franchising Code of Conduct at least 14 days before the agreement is entered into, according to the ACCC. Where premises are involved, leasing information is also required.
How long is the cooling-off period for a new franchise agreement in Queensland?
Fourteen days from entering the agreement, according to the ACCC. The franchisee must give written notice to terminate, and money paid must be refunded within 14 days less the reasonable expenses stated in the agreement. Renewals carry no cooling-off right.
Can a franchisor change a franchise agreement after it is signed in Queensland?
Generally not, unless the franchisee agrees or the agreement allows it, according to the ACCC. The franchisor cannot make retrospective changes without the franchisee's written agreement.
Is independent legal advice required before signing a franchise agreement in QLD?
The franchisor must tell the prospective franchisee to obtain independent legal, business and accounting advice, according to the ACCC. For a retail lease within the franchise, the franchisee must obtain and give the franchisor both legal and financial advice reports before entering into it.
What happens if a dispute arises under a franchise agreement in Queensland?
The first step is a written notice of dispute, according to the ACCC. If the parties cannot resolve it within 21 days, either may refer it to mediation or conciliation, which the Australian Small Business and Family Enterprise Ombudsman can help access. Both must attend and act in good faith.
Do you need a solicitor to review a franchise agreement in Springfield or Ipswich?
Independent legal advice is strongly recommended before signing any franchise agreement. A solicitor can review the disclosure documents, identify terms that carry risk and explain what the end-of-agreement and restraint of trade provisions mean. The Brookwater Legal team helps clients across Greater Springfield and Ipswich with franchise and commercial legal matters.
Can a franchisee request an updated disclosure document during the agreement in QLD?
Yes. A franchisee may request an updated disclosure document once every 12 months and must receive it within 2 months, according to the ACCC. Leasing documents must be given within one month of signing or occupation, or within 7 days of a request.
Your Next Steps
Entering a franchise is a significant commercial commitment, and the obligations it creates can continue well beyond the term of the agreement itself. For clients across Greater Springfield and Ipswich, understanding what the disclosure documents and the agreement actually require, before signing, is the most important step a prospective franchisee can take.
If franchise legal advice is on your mind, the next step is a straightforward one. Get in touch with the Brookwater Legal team or call (07) 3437 8555, and we'll talk you through how the process generally works.
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External Resources
Brookwater Legal · This article contains general information only and does not constitute legal advice. It does not take into account your individual circumstances. You should obtain legal advice about your own situation before acting on anything in this article. Liability limited by a scheme approved under Professional Standards Legislation.
