Document ID: chunk:federal_register_of_legislation:F2022C01111:clause:1_46a
Version: federal_register_of_legislation:F2022C01111
Segment Type: clause
Provision Reference: sch 1 cl 46A
Character Range: 98324–100446

46A  Franchise agreement must provide for compensation for early termination
 (1) A franchisor must not enter into a franchise agreement unless the agreement:
 (a) provides for the franchisee to be compensated if the franchise agreement is terminated before it expires because the franchisor:
 (i) withdraws from the Australian market; or
 (ii) rationalises its networks in Australia; or
 (iii) changes its distribution models in Australia; and
 (b) specifies how the compensation is to be determined, with specific reference to the following:
 (i) lost profit from direct and indirect revenue;
 (ii) unamortised capital expenditure requested by the franchisor;
 (iii) loss of opportunity in selling established goodwill;
 (iv) costs of winding up the franchised business.
Civil penalty:
 (a) for a contravention by a body corporate—the amount under clause 5A; or
 (b) for a contravention by a person who is not a body corporate—$500,000.
 (2) A franchisor must not enter into a franchise agreement unless the agreement contains provision for the franchisor to buy back or compensate the franchisee for new road vehicles, spare parts and special tools if:
 (a) the franchise agreement is not renewed and a new agreement is not entered into; or
 (b) the franchise agreement is terminated before it expires because the franchisor:
 (i) withdraws from the Australian market; or
 (ii) rationalises its networks in Australia; or
 (iii) changes its distribution models in Australia.
Civil penalty:
 (a) for a contravention by a body corporate—the amount under clause 5A; or
 (b) for a contravention by a person who is not a body corporate—$500,000.
 (3) A franchisor must not enter into a franchise agreement that contains a provision that purports to exclude any compensation to which the franchisee may be entitled, other than under the agreement, if the agreement is terminated before it expires other than because the franchisee has breached the agreement.
Civil penalty:
 (a) for a contravention by a body corporate—the amount under clause 5A; or
 (b) for a contravention by a person who is not a body corporate—$500,000.