The franchising sector will continue to adjust to the new Franchising Code of Conduct (new Code), which took effect in stages during 2025. The final transition period for franchisors to comply with the new Code ended on 1 November 2025. With a $7.1 million increase in the ACCC’s enforcement budget for the new Code, we can expect the franchising sector to face greater ACCC scrutiny in 2026 with more frequent and robust enforcement activity on the horizon.

Key enforcement activity 

The franchising sector largely evaded the attention of the ACCC over the last few years while the sector dealt with persistent regulatory changes. However, shortly after the new Code came into effect, the ACCC surprised many by taking enforcement action against multiple franchisors for failures relating to the Franchise Disclosure Register. These enforcement actions signal a shift in the ACCC’s attitude towards franchisors who, by now, have had sufficient time to ensure their systems and documents are up to date and comply with the new Code. Increased funding will mean the ACCC is better resourced to step up enforcement against franchisors into 2026, consistent with its enforcement priorities for 2025–2026.

Ultra Tune 

$1.5m contempt fine upheld on appeal 

The ACCC started 2025 with another strong win in its ongoing saga against Ultra Tune – in January, the Full Federal Court dismissed Ultra Tune's appeal. Ultra Tune unsuccessfully challenged the record $1.5 million fine imposed by an earlier Court for findings that Ultra Tune was in contempt of court for failing to comply with Court orders to update its disclosure document and provide its marketing fund statement to franchisees on time. The $1.5 million fine against Ultra Tune was upheld by the Full Federal Court.

Harvey Norman, Mobile Travel Agents Pty Ltd and Cash Converters

Franchise Disclosure Register enforcement activity

In June and July 2025, the ACCC issued infringement notices and penalties (ranging between $15,650 and $16,500) to several franchisors, including a Harvey Norman franchisor (HN Macgregor Franchisor Pty Ltd), MTA – Mobile Travel Agents Pty Ltd and Cash Converters Pty Ltd. These franchisors paid penalties for alleged failures to disclose, update or confirm franchisor information on the Franchise Disclosure Register. The ACCC commented that ‘a franchisor’s failure to publish up-to-date information on the disclosure register undermines transparency for prospective franchisees, and the reliability and integrity of the register'.

New Franchising Code of Conduct

ACCC guidance materials on the new Code

In late 2025, the ACCC released guidance materials on the new Code on its website, including the changes that came into effect on 1 April and 1 November 2025. The ACCC guidance materials include information on additional civil penalties for non-compliance with the new Code, restraint-of-trade clauses in franchise agreements, cooling-off periods, disclosure of significant capital expenditure, specific-purpose funds, a reasonable opportunity to make a return on investment, and compensation for early termination. 

In relation to the new Code obligation regarding a reasonable opportunity to make a return on investment, the ACCC has clarified its view that the obligation does not require franchisors to underwrite the success of their franchisees and that business risk will ultimately remain with franchisees. The ACCC has stated that “A reasonable opportunity doesn’t mean that the franchisor guarantees the profitability or the success of a business. It also doesn’t remove the inherent risks of running a business. However, franchisees must have a reasonable opportunity to recoup any required capital investment during the life of the agreement.” This clarification comes as a relief to many franchisors who are grappling with the scope of the new obligation, and its implications for the franchising model which has traditionally enabled businesses to expand at scale without requiring franchisors to guarantee the performance of individual franchisee units. 

Assessment against priorities 

The franchising sector largely avoided ACCC scrutiny over the last few years as it navigated persistent regulatory changes and the introduction of the new Code. However, increased funding and a shift in the ACCC’s enforcement priorities for 2025-2026 have seen an uptick in enforcement activity against franchisors. 

Looking forward 

The ACCC appears to have begun its 2025 enforcement campaign with the ‘low-hanging fruit’ – that is, pursuing franchisors for failing to disclose, update or confirm their details on the Franchise Disclosure Register. We expect that the ACCC will continue to monitor the franchising sector’s compliance with the new Code, with potentially bigger penalties on the horizon for more serious breaches of the Code in 2026. Infringement notices and penalties have been an effective way for the ACCC to address discrete areas of compliance, with this type of enforcement action having a ripple effect on the sector and encouraging other participants to revisit and sharpen their compliance frameworks. We therefore, expect that the ACCC will continue to use this targeted approach to send clear messages about its compliance expectations to franchisors.  Consistent with its enforcement policy, we also expect that the ACCC will be on the lookout for franchisors who are engaging in systemic non-compliance or whose behaviour is impacting multiple franchisees.

To date, the ACCC has offered limited educational resources to the sector on the new Code. As such, franchisors will continue to be interested in (and will hope for) further guidance from the ACCC on the new Code and, in particular, the 1 November 2025 changes concerning compensation for early termination and franchisees having a reasonable opportunity to make a return on their investment. However, until the 1 November 2025 changes are tested in Court, we recognise that the ACCC will be limited in how much guidance it can offer to franchisors about these specific new Code obligations. The real question is whether we will see heightened ACCC litigation in the sector to test the boundaries of the new laws.

Key quotes 

“One of the ACCC’s enduring compliance and enforcement priorities is to ensure that small businesses receive the protections of competition and consumer laws, including mandatory industry codes such as the Franchising Code of Conduct.” 

ACCC Deputy Chair Mick Keogh, 26 June 2025