Preparing a disclosure document is an important part of your responsibility as a franchisor. Our legal team will work with you to create your original disclosure document when you commence franchising. You are also required to update your disclosure document with revised information each year ensuring your compliance with the Franchising Code of Conduct and we can assist with this as well.
A disclosure document provides information about the franchisor and the franchise system to potential franchisees. It is designed to give them basic information about your business and your past experience. Under the Franchising Code of Conduct (the Code), a disclosure document must be issued to all prospective franchises, so that that they can make an informed decision about purchasing a franchise.
The Code is quite specific about the information that must be included in the disclosure document as well as the format in which it is presented. Information such as your business experience and the contact details of existing and past franchisees need to be disclosed, as well as financial information about your business. It will also detail establishment costs, the use of intellectual property, and any litigation history.
The disclosure document must be issued to any prospective franchisees at least 14 days before the franchise agreement is signed or any payments are made. This provides franchisees a chance to review the documents and seek independent advice.
This information must be prepared and updated each year in accordance with the requirements of the Code. The disclosure document must be formatted correctly with accurate, up-to-date information, as it is may be reviewed by the Courts in any legal dispute between the franchisor and franchisees. Our franchise lawyers will work closely with you to ensure this sensitive information is conveyed appropriately and in compliance with all the regulations.
Contact our franchise lawyers to see how they can assist in creating or updating your disclosure document.
Haven’t updated your Disclosure Document since 2017?
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