franchise Disputes

The Franchising Code of Conduct, provided at Schedule One of the Competition and Consumer (Industry Codes-Franchising) Regulation 2014 (Cth) (“the Code”), requires franchisors to develop an internal dispute resolution procedure for dealing with disputes arising from the franchise agreement or relationship.

The procedure must comply with minimum standards provided by the Code and be set out in the franchise agreement.

If a dispute arises between the parties then either one of them may initiate the dispute resolution procedure provided in the franchise agreement or the procedure provided by the Code.

In the event a party wishes to proceed with dispute resolution pursuant to the Code then they must write to the other party and outline:

  • What is disputed.
  • Their desired outcome.
  • What they require the other party to do to settle the dispute.

If the parties are unable to resolve the dispute without third-party assistance either of them can refer the dispute to mediation by an accredited mediator agreed to by the parties or one selected by the Franchising Mediation Adviser.

Either party may terminate mediation after 30 days in the event the dispute remains unresolved and commence proceedings. Of note, a dispute does not need to be referred to mediation prior to commencing proceedings.

Franchise disputes can be varied in nature. Often enough such disputes involve, amongst other things, allegations of misrepresentation by the franchisor. A paramount consideration in franchise disputes is the obligation to act in good faith as required by the Code.

Breach of contract

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