Franchising FAQ - What must a potential franchisee receive?
Date: March 04, 2011
Q. What must a potential franchisee receive?
A. The Franchising Code of Conduct requires the information to be supplied by the franchisor to a prospective franchisee. Under the Code, the franchisor is required to give clients the following legal documents:
Under the Code, the client franchisee must have the disclosure document for at least 14 days before signing the franchise agreement or any preliminary agreement or making any non-refundable payments. For example, the client may be asked to pay a deposit when they lodge the application with the franchisor. This enables the franchisor to assess whether the client is a genuine prospect. Provided the deposit is fully refundable, the franchisor may ask for this deposit before the client receives the disclosure document.
