Franchise Agreements in Australia: Key Clauses & Obligations

Franchising allows brands to expand quickly—but the franchise agreement must clearly set out rights and responsibilities on both sides. Here are the five critical elements every Australian franchise contract should cover.

1. Franchise Model & Grant of Rights

Define the business format, trademarks and systems the franchisor licenses to the franchisee. Specify whether it’s an exclusive or non-exclusive territory and any rights to sub-franchise.

2. Fees, Royalties & Marketing Contributions

Detail initial franchise fees, ongoing royalties (percentage or fixed amount), and any marketing fund contributions. Include payment schedule, audit rights and consequences of non-payment.

3. Training, Support & Operations Manual

Outline initial training programs, ongoing support services and the requirement to follow the franchisor’s operations manual. Specify update procedures and quality-control obligations.

4. Term, Renewal & Transfer

State the initial term (often 5–10 years), renewal conditions (notice periods, performance criteria) and rules for selling or transferring the franchise interest.

5. Termination & Post-Term Obligations

List grounds for termination (breach of agreement, insolvency, failure to meet standards) and post-termination duties: de-branding, confidentiality, non-compete and handover protocols.

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