ACCC puts franchisors on high alert for Franchising Code breaches

There has been a flurry of enforcement activity in recent months in the franchising sector with HN Macgregor Franchisor Pty Ltd (a Harvey Norman franchisor), Cash Converters and Mobile Travel Agents each being fined for failing to include mandatory information on the Franchise Disclosure Register as required by the Franchising Code.

This follows the Federal Government's announcement in March 2025 that it would provide funding of $7.1 million over two years from 2025-2026 to strengthen the ACCC's enforcement of the Franchising Code. It also reflects the ACCC's current priorities to ensure small businesses are adequately protected by competition and consumer laws, including the Franchising Code.

Recent ACCC enforcement activity

The Franchise Disclosure Register is not new – it was introduced in 2022 and requires franchisors to upload key disclosure information to a publicly accessible online register managed by the Australian Government. The Register aims to improve transparency for prospective franchisees, and franchisors have long been required to ensure their published information is accurate and up to date. More recently, it appears that the ACCC is actively pursuing enforcement action against franchisors for failure to comply with these obligations.

Earlier this month, HN Macgregor Franchisor Pty Ltd, a Harvey Norman franchisor, paid a $15,650 penalty for allegedly 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. This is contrary to Section 92 of the Franchising Code, which sets out a franchisor's "initial obligation to provide information for inclusion in Register". This includes critical details such as the franchisor's name, ABN, address, telephone number and email address.

In its media release, ACCC Deputy Chair Catriona Lowe warned that:

“Entering a franchise agreement is a significant financial decision and the register contains important information to inform this decision. Franchisees should be able to rely on the fact that all relevant information has been disclosed on the register.”

“The franchising sector should be on notice that failure to comply with the Franchising Code of Conduct may result in enforcement action by the ACCC.” [emphasis added]

This comes after Cash Converters Pty Ltd and Mobile Travel Agents Pty Ltd each paid $16,500 in penalties in June 2025 for allegedly failing to annually update or confirm franchisor information on the Franchise Disclosure Register, as required by Section 93 of the Franchising Code.

Recently, there have also been instances where significantly higher penalties have been imposed on franchisors for failing to meet their disclosure obligations under the Franchising Code. For example, earlier this year, the Full Federal Court dismissed an appeal by Ultra Tune Australia regarding $1.5 million in fines imposed on it for "contempt of court" charges for four specific breaches of compliance orders issued by the Federal Court of Australia on 4 March 2019. Those compliance orders related to Ultra Tune's prior violations of the Australian Consumer Law and Franchising Code, which resulted in $2.604 million in penalties. These penalties were imposed for Ultra Tune's late production and distribution of marketing fund statements and disclosure documents, misleading conduct toward a prospective franchisee, and failure to implement a compliance program.

The new Franchising Code

The ACCC's increased enforcement activity in this space coincides with the new Franchising Code introduced earlier this year. The new Franchising Code applies to franchise agreements and conduct related to franchise agreements, entered, extended, renewed or transferred from 1 April 2025.

As a reminder, under the new Franchising Code, franchisors must provide additional information on the Franchise Disclosure Register, including 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, within a certain time period.

• A franchise agreement provides for the arbitration of disputes.

Additional requirements relating to disclosure are also imminent. From 1 November 2025, franchisors must:

• Include details in their disclosure document about whether the franchisee will be required to undertake significant capital expenditure during the term of the franchise agreement. If there is a requirement, the disclosure document must include information on the rationale, amount, timing and nature of expenditure, along with the anticipated benefits, outcomes and risks.

• Prepare and distribute an annual financial statement for each specific purpose fund (eg. marketing or cooperative funds used to operate the franchise business) and hold these funds in a separate bank account.

The requirements referred to above are those that relate specifically to disclosure, but there are a number of changes more broadly including civil penalties which now apply to all provisions, and compensation for early termination extended beyond motor vehicle dealer agreements to all agreements. More information on these changes are here.