In the decision of Leon Cycle Pty Ltd v Hi5 Scooters Pty Ltd and Jamal Raad Raad, Her Honour Judge Burchell held that the Licensing Agreement between Leon Cycle and Hi5 Scooters was not a franchising arrangement for the purposes of the Franchising Code of Conduct.

With the implementation of an updated Franchising Code of Conduct and numerous court decisions on the obligations of franchisors and franchisees, 2025 was a big year in franchising.

We’re recapping the big changes and key takeaways from 2025 that franchisees and franchisors in this article.

The recent Federal Court decision in ASIC v Darranda Pty Ltd [2024] FCA 1015 highlights that where a franchisor designs the systems, documents or marketing used by franchisees, it may be held liable for regulatory breaches in its network, even without direct dealings with consumers.

#franchising #franchisorliability #ASIC #RegulatoryCompliance

The 28 August 2025 decision of the Court of Appeal of New South Wales in Netdeen Pty Ltd (t/as GJ Gardner Homes) v Lindfield NSW Pty Ltd[i] highlights several important considerations for franchisees and franchisors alike when changing a business structure.

Franchisors should have consideration to the impact that this may have on their existing contractual obligations. Franchisees need to be aware of whether their existing agreements allow for this possibility and consider this prior to entering into a franchise agreement.

The decision also highlights the importance of clear drafting in contracts, even where there has been ostensible agreement between the parties.

The Federal Court decision in Girchow Enterprises v Ultimate Franchising Group [2023] FCA 420 is a reminder that if you make financial claims about future profits or startup costs without a solid basis, you could be liable for misleading and deceptive conduct under the Australian Consumer Law.

The ACCC has issued penalties to Cash Converters and Mobile Travel Agents for breaching the Franchising Code of Conduct by failing to update required information on the Franchise Disclosure Register.

Post the ASIC civil penalty proceedings against RAMS Financial Group over alleged systemic misconduct in its home loan operations a class action by former franchisees is now seeking to intervene in the ASIC matter, citing overlapping factual issues and concerns over reliance on Westpac’s internal findings.  #franchising #disclosure #franchisor_liability

The Schaper report in December 2023 recommended further evaluation of the merits of replacing the Franchising Code of Conduct with a licensing regime. This recommendation arose after a submission to the review by the Australian Competition and Consumer Commission. Without detail of what a licensing regime may look like there is uncertainty about what any licensing regime may require. The recent case of ASIC v RAMS however provides an illustration of the effect a licensing regime may have on a franchisors. Click here to read more.

#franchising #licensing #franchisor_liability

The language used in a contract can significantly impact its enforceability. Reliance on the incorporation of an obligation to act in good faith will not necessarily result in an outcome sought. This was considered in the recent Supreme Court decision in Beecham Motors Pty Ltd v General Motors Holden Australia NSC Pty Ltd, which provides guidance for those with or considering a franchise agreement and the drafters of franchise agreements. #franchise_agreements #good_faith #franchisee_group_action

Withholding information whilst negotiating agreements can amount to misleading and deceptive conduct. However, the recent Supreme Court decision in Sec New Line Pty Ltd v Muffin Break Pty Ltd provides important guidance on when silence will become deceptive, specifically in the context of lease and franchising renewals.

This article will looks back on some of the key developments that occurred in the franchising sector in 2024, offering a reminder of changes and developments that occurred and foreshadowing what franchise businesses can expect in this coming year.

If you are a franchisor or a franchisee, it is important to be updated on the upcoming changes to the franchising Code of Conduct. The new Code contains a number of changes which will significantly increase the compliance burden and risk for the franchisors. The new Code is set to commence on 1 April 2025, franchisors may need to redraft the franchise agreements before that date to avoid penalties.

In November 2024, the Government introduced a consultation paper proposing the incorporation of a licensing regime for the franchising sector.

The Australian government has proposed reforms to the Competition and Consumer Act in response to the Food and Grocery Code of Conduct and Franchising Code of Conduct reviews. The consultation process closes on 4 October 2024 and welcomes submissions from interested stakeholders.

On 1 August 2024, the Magistrates Court of Queensland found Peak Physique Franchisor Group Pty Ltd (Peak Physique) engaged in misleading and deceptive conduct and was in breach of section 18 Australian Consumer Law through its conduct which induced the purchase of one of their premises through representations of ongoing support to the franchisee and the profitability of the franchise purchased.

Collective bargaining presents on its face an attractive option for franchisees. By joining forces and splitting negotiating costs, franchisees may be able to use collective power to strengthen their bargaining position and negotiate more favourable outcomes with their franchisor.

On 4 June 2024 the Federal Court of Australia handed down the decision of Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2024] FCA. This decision resulted in the Fair Work Ombudsman penalising the Australian franchisor of the 85 Degrees brand $1.44 million for its “systemic failure to ensure compliance within its franchise network” which included underpayments at several of their Sydney franchisee outlets.

The Government has released its response to the Franchising Independent Review agreeing to the majority of the recommendations. This article identifies some key changes to be made, the timing for these and explores what this may mean for franchises.

This update replicates a legal update provided to the Franchise Council of Australia’s February breakfast at Kooyong Lawn Tennis Club.

The concept of goodwill in a legal context is different to the concept of goodwill when it is used is an accounting context.