Franchising is now an accepted way of doing business in Australia and there have been some notable success stories, such as McDonalds, and some notorious failures.

Franchising offers inexperienced business people the opportunity to become involved in a structured business with management and marketing support to minimise the risk of failure.

It is crucial that clients ensure that they have an appropriate business structure and get advice from their accountant and solicitor prior to entering into any franchising agreement.

Clients with a successful business which they desire to franchise need to ensure that their intellectual property rights in their business system are protected and held by an appropriate entity to minimise taxation and threats from external forces.

On 1 July 1998 the Franchising Code of Conduct came into effect. The Code protects the rights of franchisees and sets out the obligations of franchisors. All franchised businesses are required by law to comply with the Code.

The Code has been prescribed under the Trade Practices Act 1974 and has the force of law. The Australian Competition and Consumer Commission ('ACCC') has responsibility for enforcing the Franchising Code of Conduct.

The Franchising Code of Conduct sets out requirements for franchisors with respect to disclosure, cooling off periods, copy of lease, association of franchisees, general releases from liability, marketing and cooperative funds and transfer and termination of franchise agreements. The Code also provides mediation procedures where disputes cannot be resolved within the franchise system.

The disclosure requirements of the Code are comprehensive for franchisors and must be complied with.

McLaughlins is able to offer comprehensive advice to franchisors and franchisees about franchising and the various franchise systems and protection of the interests of both parties.