If you operate a franchise network in Australia, there’s one date that should already be in your diary every year.
31 October.
For franchisors with a 30 June financial year, that’s generally the deadline for updating your Disclosure Document under the Franchising Code of Conduct.
Every year we see the same pattern. July arrives with good intentions, August disappears into business as usual, September becomes “we’ll deal with it next month” and, before long, it’s the final week of October and everyone is scrambling to locate financial statements, update franchise numbers and remember which version of the Disclosure Document is actually the latest.
The good news? Annual compliance doesn’t need to be stressful if you start early and work through the process systematically.
Do all franchisors need to update their Disclosure Document?
Not necessarily.
Broadly speaking, an annual update is required where, at the start of the financial year, the franchisor is already party to a franchise agreement and either:
- entered into two or more franchise agreements during the previous financial year; or
- intends to enter into another franchise agreement during the current financial year.
For most active franchise systems, the answer is yes.
If you’re continuing to recruit franchisees or grant additional franchises, you should generally assume an annual update will be required unless you’ve obtained advice to the contrary.
Updating the date isn’t enough
One of the biggest misconceptions we encounter is that updating a Disclosure Document simply involves changing the cover page date and attaching the latest financial statements.
Unfortunately, the Code requires considerably more than that.
The Disclosure Document is intended to provide prospective franchisees with current and accurate information about your franchise system. That means every annual update should involve a thorough review of the document to ensure it reflects the current position of the network.
Among other things, franchisors should review:
- franchisee numbers;
- transfers, renewals and terminations;
- litigation and disputes;
- supplier arrangements;
- rebates and commissions;
- establishment costs;
- ongoing fees;
- intellectual property;
- related entities;
- significant capital expenditure; and
- any Specific Purpose Funds.
Every item should be reviewed—not simply assumed to remain correct because nothing obvious has changed.
Start with your accountant
One of the most common causes of last-minute panic has nothing to do with lawyers.
It’s waiting for financial information.
The Disclosure Document requires financial information prepared in accordance with the Code, including solvency information and, in some cases, audited financial statements.
Your lawyer can’t prepare those documents.
Engaging your accountant early means your legal update can proceed efficiently once the financial information becomes available, rather than everyone waiting until the final week before the deadline.
Don’t overlook significant capital expenditure
The capital expenditure section deserves much more attention than it often receives.
Many franchisors simply copy last year’s wording without considering whether it still reflects the reality of the network.
Ask yourself:
- Are franchisees likely to be required to refurbish stores?
- Will technology systems be upgraded?
- Is new equipment likely to become mandatory?
- Are signage changes anticipated?
- Are there branding changes on the horizon?
Under the current Code, properly disclosing anticipated capital expenditure before a franchisee enters into, renews or extends a Franchise Agreement can be critical to preserving the franchisor’s ability to require that expenditure later.
Treating this section as boilerplate is a missed opportunity.
Is your Disclosure Document still in the correct format?
The Franchising Code changed significantly in 2025.
If your Disclosure Document hasn’t been comprehensively reviewed since then, there is a reasonable chance that it no longer complies with the prescribed form.
One quick indicator is to search for the term “Key Facts Sheet.”
Whilst not definitive, its presence often suggests the document has not been fully updated to reflect the current Code requirements.
Don’t forget former franchisees
Many franchisors also overlook the privacy requirements relating to former franchisees.
Before disclosing a former franchisee’s personal information in the updated Disclosure Document, the Code requires a specific notification process to be followed.
Failure to comply can create unnecessary compliance issues which are easily avoided by dealing with the process early.
A practical checklist
Before signing your updated Disclosure Document, ask yourself:
✔ Are the franchisee numbers current?
✔ Are all fees and costs still accurate?
✔ Have supplier arrangements changed?
✔ Does the litigation section remain current?
✔ Have all intellectual property details been reviewed?
✔ Is the capital expenditure annexure still realistic?
✔ Have Specific Purpose Fund disclosures been updated?
✔ Are the financial statements current?
✔ Does the document comply with the current Franchising Code?
If the answer to each of those questions is yes, you’re well on your way to completing one of the most important annual compliance obligations under the Code.
How Magnolia Legal can help
At Magnolia Legal, we complete annual Disclosure Document updates for franchisors across Australia every year.
Our role isn’t simply updating dates.
We review the Disclosure Document against the current Franchising Code, identify potential compliance issues, ensure internal consistency with your Franchise Agreement and Disclosure Register profile, and prepare the document so it is ready for the year ahead.
If your annual update is approaching—or you simply want someone else to worry about it—we’d be delighted to help