End of Financial Year Checklist for Franchisors
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Calling all Franchisors – you need to review and update your Disclosure Document by 31 October including the following:
1) Clause 21.1 of the Disclosure Document
Statement of Solvency;
2) Clause 21.2 of the Disclosure Document
Financial Reports for last 2 completed years;
3) Clause 21.4 of the Disclosure Document
Statement of Solvency by a registered Company Auditor by 31 October 2017– provide a copy;
4) Clause 15 of Code
Prepare financial statements for your Marketing Fund by 31 October 2017.These will need to be audited unless 75% of franchisees that contribute to fund vote not to audit the statement and that vote took place within 3 months of end of financial year, eg by end of September;
5) Distribute the financial statements of the Marketing Fund to franchisees within 30 days of preparing the Marketing Statement.
NOTE: Dominos missed these deadlines and were fined $18,000 by the ACCC. The maximum find is $54,000;
6) Review and update clause 4 of the Disclosure Document re any litigation;
7) Review clause 6 of Disclosure Document regarding existing Franchises and update 6.4 for years ending 30 June 2015, 2016 and 2017;
8) If there are master franchisees – update clause 7.4 of the Disclosure Document;
9) Review clause 8 of the Disclosure Document re any intellectual property details that may need to be updated, eg new trade marks;
10) Review and ensure you consider clause 13.2 of the Disclosure Document for any territories or sites that have been the subject of a previous franchise in the last 10 years;
11) Review and ensure all establishment costs are up-to-date at clause 14 of the Disclosure Document;
12) Review and update clause 15.1 of the Disclosure Document re Marketing Fund and especially 15.1(g) – fund’s expenses for the last financial year;
13) Review clause 17 of the Disclosure Document for any unilateral variations in the last year.
Note the ACCC are being proactive in ensuring Franchisors are complying with their obligations under the Code.
If you need any advice about your obligations please contact Christine Matsinger at McColm Matsinger Lawyers on 07 5443 1800 or email@example.com.
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The content published in this Blog is in the form of academic papers and the opinions expressed herein are generalised. The information provided is for educational purposes, not specific legal advice.
The application of any principles referred to can alter from case to case and accordingly you should seek independent legal advice in respect of your individual circumstances.