Versehentliche Einstufung als Franchise mit rechtlichen Folgen

Definition

Australian guidance on licensing to operate a branded business warns that the line between licensing and franchising can become blurry and that, if not carefully structured, a deal may be classed as a franchise under Australian law, which has strict compliance requirements.[2] The mandatory Franchising Code of Conduct (a prescribed industry code under the Competition and Consumer Act 2010 (Cth)) imposes obligations such as disclosure documents, cooling‑off rights, dispute resolution processes and specific termination rules. Civil penalties for breaches of the Code can be substantial; recent reforms have increased maximum penalties for certain provisions to hundreds of thousands of dollars per contravention (LOGIC: ASIC/ACCC guidance on industry codes and penalty unit values under the Act). If a brand owner treats a relationship as a simple brand licence but exercises significant control over the licensee’s operations (training, fit‑out, marketing approvals, operational standards) and charges an upfront or ongoing fee, a court may find that a franchise exists, exposing the licensor to penalties, orders to repay fees, and damages.

Why This Matters

The Pitch: Brand‑driven businesses in Australia 🇦🇺 risk civil penalties of up to AUD 133,200+ per contravention, legal costs and back‑pay obligations when informal 'brand licences' are later found to be franchises. Standardised documentation and compliance workflows around control, fees and disclosure reduce this exposure.

Affected Stakeholders

Brand Owner / CEO, General Counsel / External Commercial Lawyer, Head of Expansion / Business Development, Franchise & Licensing Manager, Marketing Director

Related Business Risks