Flynn Restaurant Group To Bring Wendy’s Company to Australia
According to numerous sources such as Daily Mail Australia, The Wendy’s Company (Wendy’s) is one of the most successful fast-food franchises in the United States of America, where it was founded. The logo of the girl with red hair in pigtails has become recognisable worldwide, even in Australia, where the franchise does not exist – yet. Wendy’s is now looking to grow their success with what their President, and International and Chief Development Officer, calls a move to a strategic growth market with the help of Flynn Restaurant Group.
In light of this recent news of Wendy’s partnership with Flynn Restaurant Group to roll out 200 restaurants across Australia from 2025 to 2034, this process requires an Australian presence and franchisees.
So, what is a franchise? A franchise is a business structure where the buyer (the franchisee) pays a licensing fee to trade using the branding, trademarks, products, suppliers and systems of an established business (the franchisor). In return, you must strictly follow the franchisor’s systems and procedures, which they may change over time. If you are looking to start a business, the franchise model may be a good option for you. It allows you to use a proven business model that you know is successful and that is easy to replicate. Your franchise will be an addition to a striving business network that has established connections, consumer-base and support.
How can I bring my international franchise to Australia?
If you are based overseas and want to bring your business to Australia as a franchise, you may have a couple options:
- Your first option is to find and engage a local master franchisee by signing a Master Franchise Agreement. This method would have the master franchisee essentially act as the Australian franchisor, and sell and deal with the smaller single sub-franchise owners or operators. The Master Franchise Agreement would grant the master franchisee the ability to issue franchises in Australia. This allows them to step into what your role would be as the franchisor, whilst you still maintain an element of control from overseas.
- The other option to bring your franchise to Australia is to remain as the franchisor yourself. To do this, you must comply with the Franchising Code of Conduct (the Code), which is the governing legislation for all things franchising across Australia. You must also comply with the requirements of the Australian Competition and Consumer Commission (ACCC) who act as the regulators of the Code, and are the authority regarding Australian consumer and commercial issues.
What are the preliminary steps before the Franchise Agreement?
One of the most important requirements as a franchisor when bringing your franchise to Australia is ensuring you have a robust Franchise Agreement and suite of documents that comply with the Code.
As per the Code, a Franchise Agreement is a written, oral or implied agreement where the franchisor grants the franchisee the right to carry on business of offering, supplying, or distributing goods or services in Australia under the system or marketing plan determined by the franchisor.
At least 14 days before a franchisee signs a Franchise Agreement, the franchisor must first give the prospective franchisee a Disclosure Document in the form prescribed by the Code. Again, this is a document which must be robustly drafted. A Disclosure Document includes information to help the franchisee make an informed decision about the franchise and information that is important to help run the franchise. The prospective franchisee must agree and consent that they understand their rights and responsibilities before moving forward.
Another mandatory requirement of being an Australian franchisor is maintaining a Key Facts Sheet. A Key Facts Sheet is a document that is essentially a summary which highlights some of the vital points of the Disclosure Document. It includes anything and everything necessary to better understand the Disclosure Document. It must also be in the format prescribed by the ACCC. A template Key Facts Sheet can be found on the ACCC’s website. It must be given to the prospective franchisee in conjunction with the Disclosure Document at least 14 days before the franchisee signs the Franchise Agreement.
There are various other documents which must be issued in order to comply with the Code, together with optional documents depending on the nature of your franchise system. This is again where a specialist franchise lawyer can assist.
What do I do when things go wrong in a franchise?
Starting up and operating a franchise is no easy task and can come with its challenges. As with any business relationship, disputes can arise. The Code sets out mandatory procedures for resolution of disputes, and how this must be reflected in the Franchise Agreement and Disclosure Document. A dispute that cannot be resolved between the parties can be referred to mediation by either party to the dispute. Alternatively, if both parties agree, the dispute can be referred to arbitration.
Having a well drafted Franchise Agreement will often place you in a better position if a dispute arises.
The team at Salerno Law can help both franchisors and franchisees with all your legal franchising needs, whether it’s the process of setting up your new franchising venture or if you need our experts to review your Franchise Agreement. Our experience and professionalism enables us to be of the utmost assistance while tailoring our expertise and delivering it with a human element.
This article only contains a brief summary of franchising in Australia and the considerations to be taken into account. For more information, please contact us to talk to one of our specialist solicitors.
Author George Singarayer & Luke McKavanagh
Luke is part of Salerno Law’s franchise and commercial law team. His days involve providing advice on a wide variety of commercial issues that arise in operating small to medium businesses, where he assists clients who are growing their business or wanting to protect what they’ve established. Luke has specialised in franchising law since his admission into practice and has acted for a diverse range of franchisors and franchisees of a variety of franchise systems. He is also an active member of the Queensland Law Society Franchising Law Committee where he keeps on the forefront of the latest developments in laws affecting franchising, and contributes towards submissions to government on topical issues facing the franchising industry.
DISCLAIMER: This article is only meant to give you general information and should not be relied on as legal advice. Speak to one of our lawyers for more information.