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Legal Forums » Franchising Law Discussion Forum » FRANCHISE AGREEMENTS COVERED BY THE CODE
Started Dec 22 2012, 19:34
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Dec 22 2012, 19:34
All aspects of the Code apply to a `franchise agreement' entered into, transferred, renewed or extended on or after 1 October 1998. While fully operational in relation to a post 1 October 1998 franchise agreement, some of the Code's provisions are not applicable to pre 1 October 1998 agreements. In such circumstances, a pre 1 October agreement is covered to the extent that the Code's provisions are applicable to that agreement.
A definition of franchise agreement is provided in clause 4(1) and is critical to the operation of the Code. That definition provides that:
"A franchise agreement is an agreement:
(a) that takes the form, in whole or part, of any of the following:
(i) a written agreement;
(ii) an oral agreement;
(iii) an implied agreement; and
(b) in which a person (the franchisor) grants to another person (the franchisee) the right to carry on the business of offering, supplying or distributing goods or services in Australia under a system or marketing plan substantially determined, controlled or suggested by the franchisor or an associate of the franchisor; and
(c) under which the operation of the business will be substantially or materially associated with a trade mark, advertising or a commercial symbol:
(i) owned, used or licensed by the franchisor or an associate of the franchisor; or
(ii) specified by the franchisor or an associate of the franchisor; and
(d) under which, before starting business or continuing the business, the franchisee must pay or agree to pay to the franchisor or an associate of the franchisor an amount including, for example:
(i) an initial capital investment fee; or
(ii) a payment for goods or services; or
(iii) a fee based on a percentage of gross or net income whether or not called a royalty or franchise service fee; or
(iv) a training fee or training school fee;
ID#43405
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