Document ID: chunk:federal_register_of_legislation:F2022C01111:clause:1_26
Version: federal_register_of_legislation:F2022C01111
Segment Type: clause
Provision Reference: sch 1 cl 26
Character Range: 67618–70380

26  Termination—cooling off after entering into new franchise agreement
 (1) A franchisee may terminate a franchise agreement within 14 days after entering into the agreement.
 (1A) Subclauses (1B) and (1C) apply if, immediately before the franchise agreement is entered into:
 (a) there is a proposal that the franchisor, or an associate of the franchisor:
 (i) lease premises for the franchised business to the franchisee; or
 (ii) allow the franchisee to occupy premises for the franchised business under a right (an occupancy right) other than a lease; and
 (b) the lease or occupancy right is not in force.
 (1B) The franchisee may terminate the franchise agreement within 14 days after receiving from the franchisor or associate:
 (a) the first document setting out the terms of the proposed lease or occupancy right; or
 (b) any later document setting out the terms of the proposed lease or occupancy if the terms are not substantially identical to the terms set out in the first document (excluding changes to the terms that were requested by the franchisee).
 (1C) The franchisee may terminate the franchise agreement within 14 days after entering into the lease or being granted the occupancy right if, before entering into the lease or being granted the occupancy right, the franchisee did not receive from the franchisor or associate a document setting out terms of the proposed lease or occupancy right that are substantially identical to the actual terms of the lease or occupancy right (excluding changes to the actual terms of the lease or occupancy right that were requested by the franchisee).
 (1D) Subclauses (1), (1B) and (1C) do not limit one another.
Note: Those subclauses do not provide for the franchisee to terminate another agreement with the franchisor (such as a lease of premises from the franchisor) or an agreement with anyone else.
 (2) Subclauses (1), (1B) and (1C) do not apply to:
 (a) the renewal of an existing franchise agreement; or
 (b) the extension of the term or scope of an existing franchise agreement; or
 (c) the transfer of a franchise agreement that does not involve entry into a new franchise agreement between the transferee and the franchisor.
Note: Clause 26A deals with cooling off after such a transfer.
 (3) If the franchisee terminates an agreement under subclause (1), (1B) or (1C), the franchisor must, within 14 days, repay all payments (whether of money or of other valuable consideration) made by the franchisee to the franchisor connected with the agreement.
Civil penalty: 600 penalty units.
 (4) However, the franchisor may deduct from the amount repaid under subclause (3) the franchisor's reasonable expenses if the expenses or their method of calculation have been set out in the agreement.