The competition watchdog is moving beyond education into active enforcement of Australia's franchising sector, with several recent penalties signalling that operators who fail to meet disclosure requirements face serious financial consequences.
A Harvey Norman franchisor paid a $15,650 penalty for failing to include mandatory information on the Franchise Disclosure Register at least 14 days before entering into a new franchise agreement with a prospective franchisee in July 2024. That action followed penalties against Cash Converters and MTA, Mobile Travel Agents, who each paid $16,500 after breaching the Franchising Code of Conduct.
The pattern reflects broader regulatory change. The Federal Government provided funding of $7.1 million over two years from 2025-2026 to strengthen the ACCC's enforcement of the Franchising Code. This is not merely increased resources for compliance guidance; it represents a deliberate shift toward deterrence through penalties.
A new Franchising Code of Conduct was introduced on 1 April 2025, with some rules applying from 1 November 2025. The fresh regulatory framework has widened what franchisors must disclose publicly. Under the new code, franchisors must disclose whether a director, associate, or director of an associate has been convicted of a serious offence, been subject to final judgment in certain civil proceedings, or been bankrupt or insolvent.
The underlying tension is well understood in franchising regulation. The code addresses the imbalance of power between franchisors and potential and existing franchisees. A prospective franchisee typically makes a substantial capital investment on the strength of information provided by the franchisor. If that information is false, outdated or selectively omitted, the franchisee bears most of the financial risk.
However, the new requirements do create compliance burdens for franchisors. From 1 November 2025, franchisors must update or confirm the information on the Franchise Disclosure Register before 14 November each year. Failure to comply with these obligations can result in penalties of up to 600 penalty units, amounting to $198,000 as at 2025.
For prospective franchisees, the enforcement message is clear: find out as much as you can beforehand from legal advisers, the franchisor, and current and past franchisees. The Franchise Disclosure Register is a free online register that gives people access to some key franchising information to help them make better business decisions. Recent ACCC actions suggest the information on that register will now be scrutinised more closely for completeness and accuracy.
The regulatory shift reflects a broader principle: transparency alone does not guarantee franchisee protection if disclosure obligations are not enforced. The ACCC's recent penalties suggest Australia's competition regulator is now treating franchising disclosure as a serious compliance matter, not merely an administrative requirement.