Franchising can seem like an easy way of starting or expanding your business, but it's not something you should rush into without the proper knowledge.
Complying with the Franchising Code of Conduct
As a franchisor, you are required by law to comply with the Franchising Code of Conduct. The Code sets out your rights, obligations, what information you must disclose to franchisees, what your franchise agreement must contain, and what procedure you must follow for resolving disputes.
Understanding your tax obligations
You will also need to understand your tax obligations and how franchising fees are treated for tax purposes. Payments received from your franchisees can be treated as assessable income, and you will also need to review your income tax and Goods and Services Tax (GST) reporting requirements.
Franchising agreement & manual
As part of starting your franchise, you will need to create a franchising agreement and manual. These documents will set out the rights and obligations of you (the franchisor) and the franchisee, including how your intellectual property will be covered and what your Occupational Health and Safety (OH&S) obligations are to your franchisee.
Resolving franchising disputes
If a dispute occurs and it cannot be resolved between you (the franchisor) and the franchisee, the Office of the Franchising Mediation Adviser (OFMA) may be able to help you resolve it without going to court.
