Recent Developments in Marketing Fund Disclosure Obligations

Megan Jongebloed, Director, Cowell Clarke

Marketing funds and associated disclosure have come under increased Government and industry scrutiny in recent times.

Now with a Federal Task Force releasing its findings, there’s a lot more for Franchisees and Franchisors to digest in terms of their responsibilities and rights.

Marketing funds allow a Franchisor to obtain financial resources for promotional or marketing activity, usually coming from contributions within the Franchisee network.

Proper disclosure can be a contentious area, with Franchisors balancing the burden of complying with disclosure obligations while running their businesses, and Franchisees having to rely on information provided by the Franchisor to make informed decisions about their business.

A Franchisor who maintains a marketing fund is required to provide Franchisees with an audited financial statement, separate to annual disclosure documents.

The recent developments in disclosure obligations for Franchisors under Australian law make it clear that there is a requirement for greater information and clarity around the