For franchisors and franchisees alike, one of the most practical timing questions under the Franchising Code of Conduct is: when does the 14-day consideration period actually start? It is a question any experienced franchise lawyer will tell you can become surprisingly nuanced in practice.
The consideration period is intended to give a prospective franchisee a proper opportunity to review the proposed deal before signing. However, the countdown does not simply begin when a franchisor sends “a draft”. It begins only once the required documents have been provided in the way the Code contemplates. That distinction matters, and it is often where disputes or misunderstandings arise.
What is the consideration period?
Under section 23 of the Code, a franchisor must not execute a franchise agreement until 14 days after the latest of three events:
- the day the franchisor gives the prospective franchisee the required disclosure documents and the franchise agreement;
- if the agreement is later changed in a material way, the day the changed agreement is provided; and
- if earnings information is later given, the day that earnings information is provided.
In simple terms, the clock can restart. So even where a franchisor has already issued documents, the 14 days may begin again if there is a meaningful change to the agreement or if earnings information is supplied later in the process. That is why a cautious franchise lawyer will usually track not only when documents were first sent, but also whether anything substantive was updated afterwards.
What documents need to be given?
The starting point is section 23(2). Relevantly, the franchisor must provide:
- a copy of the franchise agreement in the form in which it is to be executed;
- certain lease or occupancy documents where premises arrangements are involved; and
- unless validly opted out of, the disclosure document and a copy of the Code.
Where there is a lease, sublease or right to occupy premises through the franchisor or an associate, additional leasing material may also need to be provided. This is another area where a franchise lawyer will often recommend care, because the premises documents can be part of what informs whether the franchisee has truly had the required consideration period.
Breaking down “in the form in which it is to be executed”
This phrase is the real point of tension.
In everyday language, it means the franchise agreement given to the prospective franchisee should be the version that is actually intended to be signed, not merely a generic sample. But how complete does it need to be before it qualifies?
Some franchisors take the view that sending their standard template is enough. Others take the opposite view and say the clock only starts once a fully completed execution copy is issued, with every schedule, annexure and deal-specific variable inserted.
At Magnolia Legal, we generally adopt a middle-ground approach. In our view, the question is functional: has the franchisee been given a version that genuinely reflects the deal they are being asked to enter into?
If the answer is yes, the consideration period may well have started. If the answer is no, it may not have.
When a template may not be enough
A bare template will not always satisfy the Code.
For example, a document may very likely not be “in the form in which it is to be executed” where:
- the agreement includes special conditions that have not yet been inserted;
- the deal arises from a sale or transfer, and the agreement needs transaction-specific provisions;
- the fees differ from those shown in the template;
- a key commercial term, such as the territory, remains blank or uncertain; or
- the template does not yet contain other material particulars known or intended for the actual deal.
In those circumstances, the franchisee has not really been given the agreement they are being asked to sign. They have instead been given an example of what the agreement might look like. A prudent franchise lawyer would usually be slow to say that starts the statutory clock.
By contrast, if the remaining changes are truly mechanical or minor, the position may be different.
Which changes do not restart the clock?
The Code also recognises that not every amendment is significant. Section 23(7) says the 14-day period does not restart for certain limited changes, including:
- changes requested by the prospective franchisee;
- filling in required particulars;
- changes to addresses or circumstances;
- minor clarifications; and
- correcting errors or references.
That list is important. It shows Parliament expected some degree of finalisation after initial issue. But it does not mean every blank template is good enough from the outset. A franchise lawyer still needs to ask whether the missing information is merely administrative, or whether it goes to the substance of the bargain.
Practical guidance: when does the clock really start?
In practical terms, the consideration period is most safely treated as commencing when the prospective franchisee has received a version of the franchise agreement that substantially reflects the actual commercial deal, together with the other required documents.
Where the agreement still lacks material deal-specific content, there is a real argument that the prescribed period has not yet been triggered.
That is particularly so where the missing matters are central to the franchisee’s decision-making, such as fees, territory, special conditions, sale-related terms, or premises arrangements. In those scenarios, a cautious franchise lawyer will often advise against assuming the clock has started.
Magnolia’s view
At Magnolia Legal, our view is straightforward: substance matters more than labels.
Calling a document an “execution version” does not necessarily make it one. Equally, not every incompletion will prevent the consideration period from commencing. The real issue is whether the prospective franchisee has been given a fair and accurate opportunity to consider the agreement they are actually being asked to sign.
Where time permits, we generally consider it prudent to err on the side of caution. In practice, that means relying on a lawyer-reviewed, fully or near-fully populated copy wherever possible. That approach reduces the risk of non-compliance, arguments about timing, and unnecessary disputes later.
In franchising, process matters. And when it comes to the consideration period, a careful franchise lawyer will usually tell you that getting the trigger date right is just as important as meeting the 14 days themselves.