Competition Minister Andrew Leigh wants franchisors to publish their standard form contracts online to encourage more sign-ups.
Competition Minister Andrew Leigh is calling on franchisors to publish their standard form contracts online, saying better transparency would encourage small business entrepreneurs to sign up.
In an address to the Franchise Council of Australia, Assistant Minister Leigh will today urge representatives of Australia’s most recognisable consumer brands to better utilise the Franchise Disclosure Register.
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Thousands of franchisors, representing brands spanning Anytime Fitness through to Zambrero, already list information on the disclosure register, including about setup costs, ongoing payments, and contract lengths.
But relatively few list their standard form franchise agreements, which are the key contracts between a franchisor and the small businesses looking to represent the brand.
Making it easier to access these standard form contracts through the register would benefit franchisors, and the entrepreneurs considering which brand to buy into, Leigh will say.
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“I would encourage every Australian franchisor to publish theirs,” the Assistant Minister is expected to say, according to an excerpt seen by SmartCompany.
“Prospective franchisees should be able to compare contracts while they are still comparing businesses, before they have spent months pursuing one opportunity.”
Better transparency would naturally expose shoddy deals, “giving franchisors a reason to compete on the fairness of their contracts,” he will add.
“You’ve put a lot of work into those contracts,” he added.
“It seems a shame for the franchisee’s lawyer to be the only person who gets to admire them.”
Prospective franchisees in the US states of California, Wisconsin, and Minnesota can search and read proposed franchise agreements online, giving entrepreneurs in those states the chance to understand the deal before signing.
His speech follows the introduction of a new Franchising Code of Conduct in 2025.
That beefed-up document already calls for franchisors to better disclose the costs associated with any franchise deal, while giving franchisees a chance to earn a return on their investment, among other reforms designed to give small business operators a better deal.
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The Assistant Minister for Productivity, Competition, Charities and Treasury will also push the view that unfair contract term protections for small businesses should cover all franchisees under the Franchising Code of Conduct — including those that grow into large operations in their own right.
“A franchisee that grows beyond the small business thresholds may still be offered the same take-it-or-leave-it contract,” he will say.
“It should retain protection against unfair terms.”
As with the transparency offered by the register, Assistant Minister Leigh will say franchisors offering fair terms will earn a competitive advantage.
“They compete for prospective owners with businesses whose contracts may be much less attractive.”