2025 Franchising Code Changes Explained – Awelle

The Franchising Code of Conduct changed on 1 April 2025, with further obligations phasing in by 1 November 2025 — the most significant rewrite of Australian…

Lisa Muscatello's avatar

Lisa Muscatello

By the Awelle Legal Team — practising Australian lawyers.

The Franchising Code of Conduct changed on 1 April 2025, with further obligations phasing in by 1 November 2025 — the most significant rewrite of Australian franchising regulation in years. It applies to every franchise agreement entered into, renewed, extended or transferred from 1 April 2025, and touches disclosure, termination, capital expenditure and civil penalties.

Key Facts

What changed on 1 April 2025

From 1 April 2025, the new Code applies to any franchise agreement entered into, renewed, extended or transferred on or after that date, and to related conduct. Post-expiry restraint of trade clauses are now restricted in specific circumstances, and a wider set of Code obligations carry civil penalties. Key Facts Sheets also stopped being required from this date — franchisors can no longer create, maintain or upload them to the Franchise Disclosure Register, and previously uploaded Key Facts Sheets are no longer publicly viewable. In their place, the Register’s franchisor profile now requires disclosure of matters such as relevant conviction history and whether the agreement contains an arbitration clause.

What changed on 1 November 2025

A second tranche of obligations phased in from 1 November 2025, aimed at capital-intensive and long-term arrangements. Franchisors must disclose and discuss significant capital expenditure with franchisees before it’s required, rather than after the fact. Specific-purpose funds — marketing funds and similar arrangements — carry additional reporting duties. Franchisees must be given a reasonable opportunity to make a return on their investment, and in certain circumstances the agreement must include compensation for early termination that isn’t the franchisee’s fault.

Termination for serious breach: the new 7-day rule

One of the more consequential changes for franchisors: where a franchisee commits a serious breach, the franchisor can now terminate on 7 days’ written notice stating the breach and the franchisor’s intention to terminate — without first being required to progress the dispute through the Code’s alternative dispute resolution process. That’s a materially faster path to termination than under the old Code. It doesn’t remove a franchisee’s right to challenge the termination in court; it removes the mandatory mediation detour beforehand.

What a breach costs now

Civil penalties of up to 600 penalty units now attach to breaches of most substantive obligations in the Code — disclosure failures, marketing fund misuse, unreasonably withholding consent to transfer and terminating without proper notice among them. The dollar value of a penalty unit is indexed and changes periodically, so check the current Commonwealth penalty unit value rather than relying on a figure from an older article — but the exposure is real, and higher than most franchise agreements drafted before 2025 were built to reflect.

If you’re a franchisor

If your standard-form agreement, disclosure document or onboarding process was last reviewed before 2025, treat this Code as a trigger for a review — not just of the documents, but of the Register profile information you now maintain instead of a Key Facts Sheet. Awelle’s franchisor tools help networks keep franchisee-facing documents consistent with current obligations.

If you’re a franchisee

Before signing, renewing, extending or accepting a transfer of a franchise agreement, check what your disclosure document says about capital expenditure, marketing fund reporting and your return-on-investment protections — these are new, and older template disclosure documents may not cover them properly yet. Awelle’s franchisee tools help you review what you’re being asked to sign against current Australian franchising law.

The bottom line: if your franchise agreement was entered into, renewed, extended or transferred on or after 1 April 2025, assume the new disclosure, termination and penalty rules already apply to you — and get your disclosure document and Register profile checked before your next renewal cycle.

Frequently asked questions

When did the new Franchising Code come into effect?

The new Code commenced on 1 April 2025 for most obligations, with further obligations — significant capital expenditure disclosure, specific-purpose fund reporting and return-on-investment protections — applying from 1 November 2025. It applies to agreements entered into, renewed, extended or transferred from 1 April 2025.

Do I still need to provide a Key Facts Sheet?

No. Key Facts Sheets are no longer required, and franchisors can no longer upload them to the Franchise Disclosure Register. Instead, the Register requires franchisor profile information such as relevant conviction history and whether the agreement contains an arbitration clause.

Can a franchisor terminate for a serious breach without going to mediation first?

Yes. With 7 days’ written notice stating the breach and the intention to terminate, a franchisor can now terminate for a serious breach without first being required to progress the matter through the Code’s alternative dispute resolution process. The franchisee can still challenge the termination in court.

What are the penalties for breaching the Code now?

Civil penalties of up to 600 penalty units apply to breaches of most substantive obligations in the Code, including disclosure failures, marketing fund misuse and terminating without proper notice. The dollar value of a penalty unit is indexed and changes periodically — check the current Commonwealth figure rather than an older published amount.

Does my existing franchise agreement need to be updated?

The new Code applies to agreements entered into, renewed, extended or transferred on or after 1 April 2025, and to related conduct. Agreements that have not been renewed, extended or transferred since that date continue under transitional arrangements — get advice specific to your agreement before assuming either way.

This article is general information, not legal advice — the transitional rules for agreements entered into before 1 April 2025 can change how and when these obligations apply to you. Awelle can help franchisors and franchisees review agreements and disclosure documents against the current Code, grounded in current Australian law.