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Franchise Contract Template for Australia

An Australian Franchise Contract is a comprehensive legal agreement that establishes and governs the relationship between a franchisor and franchisee under Australian law, particularly the Franchising Code of Conduct. This document outlines the terms and conditions for operating a franchised business, including rights, obligations, operational requirements, fees, territory rights, intellectual property usage, and compliance requirements. It incorporates mandatory provisions required by Australian franchise law while protecting both parties' interests and establishing clear operational guidelines and performance standards.

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What is a Franchise Contract?

The Franchise Contract serves as the foundational legal document establishing a franchise relationship in Australia. This agreement is essential when a business (franchisor) grants another party (franchisee) the right to operate under their established business system and brand. The contract must comply with Australia's Franchising Code of Conduct and related legislation, including the Competition and Consumer Act 2010. It details all aspects of the franchise relationship, including initial and ongoing fees, territorial rights, operational requirements, training obligations, and termination conditions. This document is crucial for protecting both parties' interests while ensuring regulatory compliance and establishing clear performance expectations. The Franchise Contract should be customized to reflect specific business requirements while maintaining compliance with Australian franchise regulations.

What sections should be included in a Franchise Contract?

1. Parties: Identification of the franchisor and franchisee, including full legal names, ABNs, and registered addresses

2. Background: Context of the franchise system, business concept, and purpose of the agreement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules for interpretation

4. Grant of Franchise: Terms of the franchise grant, territory rights, and exclusivity provisions

5. Term and Renewal: Initial term of the agreement, conditions and process for renewal

6. Fees and Payments: Initial franchise fee, ongoing royalties, marketing contributions, and payment terms

7. Franchisor Obligations: Support, training, and services to be provided by the franchisor

8. Franchisee Obligations: Operating standards, compliance requirements, and performance obligations

9. Intellectual Property: Use of trademarks, copyright materials, and other IP rights

10. Operations Manual: Reference to and compliance with the operations manual

11. Training Requirements: Initial and ongoing training obligations

12. Marketing and Advertising: Marketing fund contributions, local marketing requirements, and advertising guidelines

13. Records and Reporting: Financial record-keeping requirements and reporting obligations

14. Insurance: Required insurance coverage and minimum limits

15. Transfer Provisions: Process and conditions for transfer of the franchise

16. Termination: Grounds for termination and termination procedures

17. Post-Termination Obligations: Obligations and restrictions after agreement ends

18. Dispute Resolution: Process for handling disputes as per Franchising Code requirements

19. Restraint of Trade: Non-compete and non-solicitation provisions

20. Governing Law: Jurisdiction and applicable law

What sections are optional to include in a Franchise Contract?

1. Multiple Unit Rights: Used when franchisee has rights to operate multiple units or first right of refusal for additional units

2. Online Operations: Include when the franchise involves e-commerce or online presence requirements

3. Supply Arrangements: Required when specific supplier relationships or exclusive supply arrangements exist

4. Premises Requirements: Include when franchise operates from specific premises with special requirements

5. Equipment Leasing: Used when franchisor provides or requires specific equipment leasing arrangements

6. Development Schedule: Include for multi-unit development agreements with specific opening timelines

7. Special Territory Rights: Used when territory includes special venues or non-standard arrangements

8. International Operations: Include for franchises operating across international borders

What schedules should be included in a Franchise Contract?

1. Schedule 1 - Franchise Details: Key commercial terms, fees, territory definition, and specific grant details

2. Schedule 2 - Initial Fee Schedule: Breakdown of initial franchise fees and establishment costs

3. Schedule 3 - Territory Map: Detailed description and/or map of the granted territory

4. Schedule 4 - Approved Products and Services: List of authorized products and services for the franchise

5. Schedule 5 - Initial Training Program: Details of required initial training and support

6. Schedule 6 - Trademark Schedule: List of registered trademarks and usage guidelines

7. Schedule 7 - Equipment and Fit-out Specifications: Required equipment, furniture, and fit-out standards

8. Schedule 8 - Key Performance Indicators: Specific performance metrics and minimum standards

9. Appendix A - Deed of Guarantee: Personal guarantees from franchisee principals

10. Appendix B - Confidentiality Agreement: Additional confidentiality provisions and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok˰ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Australia

Publisher

tiktok˰

Document Type

Agreement Contract

Cost

Free to use

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