The Information Statement is a standard document set out in annexure 2 to the Code. It is a generic statement designed to inform prospective franchisees of a number of key matters before they make the commitment to enter into a franchise agreement. It includes an explanation of what franchising is and what the franchising relationship involves, the risks of franchising, information on where to obtain more information and online education courses on franchising.
When should it be provided?
The timing for providing an Information Statement is not fixed, however, a franchisor should not allow delays once a formal application or an expression of interest has been received.
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- A Franchisor receives an unsolicited phone call from Shirley asking general questions about its franchise system. After the Franchisor, has answered those questions, Shirley says that she would like to think about it. In this situation, the Franchisor would not be expected to provide Shirley with an Information Statement.
- A Franchisor receives an unsolicited phone call from Chloe who asks questions about its franchise system, including about competing businesses, qualifications she might need to run the franchise and financing. In this situation, the Franchisor would not be expected to provide Chloe with an Information Statement, though it might be advisable.
- A Franchisor receives a phone call from Angela, who she previously met at a trade fair. Julia asks detailed questions about the Jim’s Cleaning franchise system, the price of a franchise and the next steps in obtaining more information on the system. The Franchisor provides Julia an information package. In this situation, a Franchisor must provide Julia with an Information Statement as soon as practicable either with the information package.
How should the information statement be provided?
We suggest you provide it to prospective franchisees in one of two ways:
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When submitting an instruction sheet with the documents team to raise franchise documents you will be asked to supply receipt of the information statement being a copy of the above.
Can the information statement be amended?
We do not recommend adding any logos or customization as it deflects from the information statement being a standard issue ACCC document.
Some Franchisors will add a simple execution section to the end so they have receipt of it being provided (as mentioned above).
What happens if you don't provide the information statement?
You will be in breach of the Franchising Code of Conduct and penalties could be issued by the ACCC.
Your submission for documents will also be rejected by the documents team until the information statement is provided and receipt can be provided.
Related ACCC links:
https://www.accc.gov.au/system/files/Information%20statement_0.pdf
Copy of Information Statement:
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