A new Australian law designed to protect small businesses from onerous contractual terms is expected to affect franchise agreements from 2016 forward. The new law is aimed at all “small” business standard form contracts and is not specifically directed at franchising. Nevertheless, franchise agreements are expected to be impacted more than most. The Australian Competition and Consumer Commission (ACCC) has already announced that the franchising sector will be a priority for its compliance and enforcement activities under this new law.
In contrast with the existing law on good faith, this new law targets the terms of the agreement itself, not the manner of their exercise.