A franchise agreement is a legally binding document outlining the rights and responsibilities of the franchisor and franchisee.
Before signing the franchise agreement, it's important you obtain as much information about the franchise as possible. To help you with this, the Franchising Code of Conduct (Franchising Code) requires that franchisors give you, the prospective franchisee:
- a copy of the Franchising Code
- a disclosure document
- a copy of the franchise agreement in its final form
- an information sheet outlining the risks and rewards of franchising.
These documents must be provided to you at least 14 days before you start, renew or extend a franchise agreement or pay a non-refundable deposit.
As a prospective franchisee, it's important to understand what is being offered and your rights and obligations under the Franchising Code. You should also be aware that a franchise agreement only gives you the right to operate that business for the life of the franchise agreement. There is no guarantee that the agreement will be renewed, unless specifically negotiated under the agreement.
Use the cooling-off period to check your final facts and figures to determine if you still want to proceed.