By Magnolia Legal – Your Go-To Franchise Lawyer
It’s that time of year again. The inboxes are pinging, calendars are filling, and across the country, franchisors are turning their attention to their annual disclosure document (DD) update.
At Magnolia Legal, many of our franchisor clients engage us each year to update their DD — and that’s a smart move. But some franchisors prefer to handle it themselves. If you’re going the DIY route, we’re happy to help point you in the right direction. Below is a guide to help you prepare a compliant, accurate and up-to-date disclosure document in line with your obligations under the Franchising Code of Conduct (the Code).
1. Make Sure You’re Using the Right Template
Let’s start with the basics. You must use a current form. The Code was updated in April 2025, and those changes introduced new requirements for disclosure documents. If you’re working off a copy from last year, or the year before, it’s likely out of date — and that could expose you to compliance risks.
Key changes in the April 2025 update relate to dispute disclosures, supplier rebates, and clearer presentation of marketing fund information. If your template doesn’t reflect these changes, stop and speak to a franchise lawyer. Similarly, if you updated your franchise agreement to comply with the New Code, those updates need to be reflected in the DD (and if you have updated your franchise agreement – don’t use it! call us!).
2. Review and Verify All Factual Content
The disclosure document must be factually accurate as at its date. This means the details must be reviewed carefully each time the document is updated.
Here are some key items to check:
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Item 6 – Franchisee Details
Make sure the list of existing and former franchisees is complete and accurate. Don’t forget those who have left the network in the last three financial years. -
Item 14 – Costs and Expenses
Review all upfront and ongoing fees. Be clear about how they’re calculated. Our earlier article on franchise fees and disclosure gives a detailed breakdown [insert link if needed]. -
Item 8 – Intellectual Property
Cross-check all IP registrations with IP Australia’s database. Make sure trademarks are current, correctly registered and in the franchisor entity’s name. Don’t rely on memory or old notes — check the official register.
3. Update All References to Financial Years
It sounds simple, but it’s often missed. Make sure all references to the relevant financial year are updated throughout the document. The disclosure document must reflect the most recent completed financial year, not the one before it.
This includes both financial performance representations (if any), franchisee numbers, and expenditure on marketing and other funds.
4. Financial Disclosure – Start Early
If you provide financial information in the disclosure document (i.e. profit projections or past performance figures), make sure it’s supported by accounting or business records and prepared in line with the Code.
Financial reports (such as statements of solvency and directors’ statements) also need to be prepared and signed. These can take time to finalise, especially if you’re waiting on accountants or external advisors. So don’t leave this until the last minute.
For more detail on the financial disclosure requirements, see our previous article on financial disclosure obligations for franchisors here.
5. Marketing and Other Specific Purpose Funds
If your franchise system operates a marketing fund or any other specific purpose fund, you’re required to:
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Prepare and provide a marketing fund statement
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Disclose expenditure in sufficient detail
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Have the fund statement audited, unless 75% of franchisees agree otherwise
This is an area the ACCC has been increasingly focused on, so don’t treat it as an afterthought. If you haven’t yet prepared the fund report, now is the time.
A Few Final Tips
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Keep your disclosure document concise and clear. Don’t pad it with unnecessary language.
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Double-check that all contact details are current,
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If you’re updating the document mid-year (for example, due to a material change), make sure to include the appropriate statement and clearly mark the update.
Still Not Sure?
Updating your disclosure document isn’t just a compliance obligation — it’s a key part of managing risk and maintaining franchisee trust. If you’re ever unsure, get advice early. A franchise lawyer can help you navigate the process and avoid common pitfalls.
At Magnolia Legal, we’re always happy to support franchisors, whether you’re updating your DD with our help, or going the DIY route and just want a second set of eyes. Because when it comes to franchise compliance, it pays to get it right the first time.