- 1300 267 711
- Australia Wide
Franchising is a cornerstone of the Australian economy, but the franchisor-franchisee relationship is inherently complex — and disputes are common. Whether you are a franchisee facing unfair treatment or a franchisor dealing with a non-compliant operator, the legal framework governing franchise relationships is detailed and heavily regulated. At Boss Lawyers, we have extensive experience in franchise disputes and regularly act for both franchisors and franchisees in Brisbane and throughout Queensland.
Last updated: April 2026
If you are involved in a franchise dispute, early legal advice is essential. The Franchising Code of Conduct imposes strict obligations and timeframes that can significantly affect your rights. Contact us on 1300 267 711 to discuss your matter.
A franchise dispute is any disagreement between a franchisor and franchisee (or between franchisees) concerning the franchise relationship, the franchise agreement, or the operation of the franchise system. Franchise disputes in Australia are governed by a combination of:
The Franchising Code creates a regulated framework that imposes obligations beyond the terms of the franchise agreement itself. Understanding these obligations is critical to resolving any franchise dispute effectively.
At Boss Lawyers, we regularly act in the following types of franchise disputes:
One of the most common sources of franchise disputes is misrepresentation — where a franchisor (or its representatives) makes false or misleading statements about the franchise opportunity prior to the franchisee entering the agreement. This may include overstated earnings projections, understated costs, misleading claims about territory exclusivity, or failure to disclose material information. Under section 18 of the ACL, such conduct is prohibited regardless of whether it was intentional.
Disputes about breach of the franchise agreement are common and may arise from either side. Franchisee breaches may include failure to pay royalties, failure to comply with operational standards, or unauthorised use of the franchisor’s intellectual property. Franchisor breaches may include failure to provide promised support, failure to protect the franchisee’s territory, or unilateral changes to the franchise system.
Territory disputes arise when a franchisee’s exclusive or non-exclusive territory is encroached upon — whether by the franchisor establishing a competing outlet, granting a new franchise in the same area, or allowing online sales to erode the franchisee’s customer base. The extent of territorial protection depends on the terms of the franchise agreement and any representations made prior to entry.
The Franchising Code imposes specific obligations regarding renewal and termination. Clause 23 of the Code requires a franchisor to provide written notice if it proposes not to renew a franchise agreement, and clause 29 restricts the circumstances in which a franchisor may terminate. Disputes frequently arise about whether proper notice has been given, whether grounds for termination exist, and what compensation (if any) is payable upon non-renewal.
Franchise agreements typically contain non-compete and restraint of trade clauses that restrict the franchisee’s ability to operate a competing business during and after the franchise term. Disputes arise about the enforceability and scope of these restraints. Courts assess the reasonableness of restraints by reference to the legitimate interests of the franchisor, the scope of the restraint (in terms of duration, geography, and activity), and whether the restraint goes further than is reasonably necessary.
Disagreements about royalty calculations, marketing fund contributions, and financial reporting obligations are common. Franchisees may dispute the amount of royalties payable, the transparency of marketing fund expenditure, or the accuracy of the franchisor’s financial reporting. Franchisors may pursue franchisees for unpaid royalties or breach of financial obligations.
The Franchising Code of Conduct is the primary regulatory framework governing franchise relationships in Australia. Key provisions include:
A franchisor must provide a prospective franchisee with a disclosure document at least 14 days before the franchisee enters the agreement or pays any non-refundable money. The disclosure document must contain prescribed information about the franchise system, the franchisor’s financial position, any litigation history, and the details of existing and former franchisees. Failure to provide adequate disclosure may give rise to claims under the Code and the ACL.
Clause 6 of the Franchising Code imposes an obligation of good faith on each party to a franchise agreement. This obligation requires the parties to act honestly, not arbitrarily, and to cooperate to achieve the purposes of the agreement. While the obligation does not require a party to act in the other’s interests to its own detriment, it does prohibit conduct that is dishonest, capricious, or designed to undermine the franchise relationship.
The Code mandates a structured dispute resolution process (Part 4). Before commencing litigation, the parties must attempt to resolve the dispute through internal resolution procedures, and if that fails, through mediation administered by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) or another agreed mediator. This process is a prerequisite to court proceedings in most circumstances.
The resolution of franchise disputes typically follows a structured pathway:
The first step is to raise the dispute formally with the other party through the internal complaint resolution process required by the franchise agreement and the Code. This involves putting the dispute in writing, identifying the issues, and attempting to resolve them directly.
If internal resolution is unsuccessful, either party may refer the dispute to the ASBFEO for mediation. The ASBFEO provides a low-cost mediation service specifically designed for franchise disputes. Mediation is confidential, voluntary (once commenced), and often effective in resolving disputes without the cost and delay of litigation. The mediator does not make a binding decision — the parties retain control of the outcome.
Where mediation fails to resolve the dispute, court proceedings may be commenced. Depending on the nature of the claim, proceedings may be brought in the Federal Court (for claims under the CCA/ACL) or the Queensland courts (for contractual and equitable claims). The Federal Court has established a specialist franchise list for the efficient management of franchise disputes.
The remedies available in franchise disputes depend on the nature of the claim and the applicable legal framework:
Many franchise disputes can be avoided through proper due diligence before entering the franchise relationship. At Boss Lawyers, we assist prospective franchisees and franchisors with:
Engaging a lawyer experienced in franchise law before you sign is significantly cheaper than litigating a dispute after things go wrong.
At Boss Lawyers, we bring a pragmatic, commercially focused approach to franchise disputes. We understand that franchise disputes are not just legal problems — they affect livelihoods, business relationships, and reputations.
In most cases, yes. The Franchising Code of Conduct requires the parties to attempt to resolve the dispute through the Code’s dispute resolution process (including mediation) before commencing litigation. Failure to do so may affect the court’s willingness to hear the matter and may have costs consequences. However, in urgent cases (such as applications for injunctive relief), the court may hear the matter without prior mediation.
The Franchising Code restricts the circumstances in which a franchisor can terminate. Clause 29 requires the franchisor to give reasonable written notice (generally not less than 28 days) and to provide the franchisee with an opportunity to remedy any breach. However, the Code permits termination without notice in limited circumstances, including where the franchisee has been convicted of a serious offence, has acted fraudulently, or the franchise agreement is frustrated.
Clause 6 of the Franchising Code imposes an obligation on each party to act in good faith in their dealings with each other. This means acting honestly, not acting arbitrarily or capriciously, and cooperating to achieve the purposes of the franchise agreement. The obligation does not require altruism — a party can still pursue its own commercial interests — but it prohibits dishonest, exploitative, or bad faith conduct.
The limitation period depends on the nature of the claim. For breach of contract, the limitation period is generally 6 years from the date of the breach under the Limitation of Actions Act 1974 (Qld). For claims under the ACL (such as misleading or deceptive conduct), the limitation period is 6 years from the date of the contravention. For claims under the Franchising Code, the period may vary — early advice is recommended.
Most franchise agreements contain provisions governing assignment (transfer). Typically, the franchisor’s consent is required, and the franchisor may impose conditions (such as requiring the incoming franchisee to meet certain criteria). The Franchising Code requires the franchisor to act reasonably in deciding whether to consent to a transfer. If consent is unreasonably withheld, this may constitute a breach of the good faith obligation.
Before signing a franchise agreement, you should: obtain independent legal advice from a lawyer experienced in franchise law; obtain independent financial advice; carefully review the disclosure document; speak to existing and former franchisees; and allow the mandatory 14-day cooling-off period to pass before making a final decision. The relatively modest cost of pre-entry advice is dwarfed by the potential cost of a franchise dispute.
If you are involved in a franchise dispute or considering entering a franchise relationship and need independent legal advice, contact Boss Lawyers today.
Call us on 1300 267 711 or contact us online to arrange a consultation with Mark Harley, Principal Solicitor.
Boss Lawyers Pty Ltd
Level 27, Santos Place, 32 Turbot Street
Brisbane QLD 4000
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
