Why you need to read the disclosure document

Sarah Stowe
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The disclosure document contains vital information you’ll need to make a considered decision about whether or not to buy a franchise.

As you get close to buying a franchise it might seem daunting to be faced with lots of documentation. But it’s sensible to take your time to understand what’s included and what this means for you as a franchisee.

Key points highlighted

In this podcast we highlight some of the key aspects that can be found in the disclosure document. The franchisor’s financial reports and the number of franchisees who have left the network are some of the facts available.

There is also information about who owns the intellectual property, and details of payments to be made.

These are just some of the important information contained in this essential document, which is one of several the franchisor has to provide.

This podcast also reveals how much time you need to review these documents, and where to go to get help.

Show notes

The disclosure document is different from the franchise agreement, which is referenced here. That’s another of the important documents handed to a franchise buyer, and this prescribes the rules and regulations of operating the business. It essentially outlines the business contract between the franchisee and the franchisor.

Would-be franchisees will also get a copy of the Key Facts Sheet, which is a tool that can help readers navigate the disclosure document. It has to conform to a standard format.

You can find out more about this on the ACCC website

Both the disclosure document and the key facts sheet must be updated annually by the franchisor. 

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We recommend obtaining professional advice from an accredited advisor before relying on information in this podcast. The publisher, the authors, the editors, as well as all their respective employees and agents, shall not accept responsibility for loss or damage arising from reliance on information in this publication.