Document ID: chunk:federal_register_of_legislation:F2022C01111:clause:1_29:p1
Version: federal_register_of_legislation:F2022C01111
Segment Type: clause
Provision Reference: sch 1 cl 29 (pt 1/2)
Character Range: 76867–79777

29  Notice of termination by franchisor on particular grounds
 (1) This clause applies if a franchise agreement gives the franchisor power to terminate the agreement on any of the following grounds:
 (a) the franchisee no longer holds a licence that the franchisee must hold to carry on the franchised business;
 (b) the franchisee becomes bankrupt, an insolvent under administration or a Chapter 5 body corporate;
 (c) the franchisee is a company that is deregistered by the Australian Securities and Investments Commission;
 (d) the franchisee voluntarily abandons the franchised business or the franchise relationship;
 (e) the franchisee is convicted of a serious offence;
 (f) the franchisee operates the franchised business in a way that endangers public health or safety;
 (g) the franchisee acts fraudulently in connection with the operation of the franchised business.

Franchisor must give 7 days' notice of proposed termination
 (2) The franchisor must not terminate the agreement because of a ground mentioned in subclause (1) unless the franchisor has given the franchisee 7 days' written notice of the proposed termination and the ground for it.
Civil penalty: 600 penalty units.
 (3) However, clauses 27 and 28 do not prevent the franchisor from exercising the power under the agreement to terminate the agreement if the franchisor has not met the requirements of subclause 27(2) or subclause 28(3).
Note: Those requirements include giving reasonable written notice of the termination to the franchisee.

Rapid appointment of ADR practitioner or arbitrator for dispute over proposed termination
 (4) If the franchisor gives the franchisee written notice of the proposed termination and the franchisee tells the franchisor, in writing under subclause 40A(1) or a corresponding provision of the franchise agreement, about a dispute relating to the proposed termination then:
 (a) despite subclause (2), the franchisor must not terminate the agreement until after the end of 28 days after the notice was given; and
 (b) despite subclauses 40A(3), (4) and (5) or corresponding provisions of the franchise agreement:
 (i) the franchisee may refer the matter to an ADR practitioner for an ADR process if the franchisee and franchisor do not agree promptly how to resolve the dispute; and
 (ii) either the franchisee or the franchisor may request the Ombudsman to appoint an ADR practitioner for the ADR process relating to the dispute if the franchisee and franchisor do not agree promptly on who should be the ADR practitioner; and
 (iii) if requested, the Ombudsman must appoint an ADR practitioner as soon as practicable; and
 (c) despite paragraph 43B(4)(a), the Ombudsman must appoint an arbitrator for the dispute as soon as practicable after receiving a request from the parties to the franchise agreement to do so.

Requiring franchisee to cease operating franchised business because of ground