Understanding Your Marketing Fund Disclosure Obligations as a Franchisor

Updated: November 2025

Category: Franchising Compliance & Disclosure

Running a successful franchise network in Australia means more than just maintaining brand consistency and supporting your franchisees. It also means keeping up with your legal disclosure obligations under the Franchising Code of Conduct.

Franchisors must disclose how marketing funds are managed under the Franchising Code of Conduct, transparency builds trust across your network.

If your franchise system includes a marketing or advertising fund, you have additional responsibilities under the Code. Let’s break down what franchisors need to disclose, when, and why transparency matters for both compliance and trust across your network.

What Is a Disclosure Document?

A disclosure document is a standardised form required by the Franchising Code of Conduct (the Code). Every franchisor in Australia must maintain this document and provide it to:

• Prospective franchisees before they sign a franchise agreement; and

• Existing franchisees, if they request it.

This document outlines essential details about your business, including:

• Your background as the franchisor;

• Information about the franchise network; and

• The initial and ongoing costs of operating the franchise.

Under the Code, franchisors must update their disclosure document by 31 October each year, reflecting any changes from the financial year ending 30 June.

This annual update isn’t optional, it’s a core part of your compliance obligations. And if you operate a marketing fund, the Code requires even more detail.

What Is a Marketing Fund?

A marketing fund is a dedicated account controlled by the franchisor, into which franchisees contribute regularly. The purpose of this fund is to support brand-wide marketing and promotional activities, such as advertising campaigns, digital marketing, and public relations efforts that benefit the network as a whole.

To stay compliant, franchisors must:

• Maintain a separate bank account for the marketing fund;

• Deposit all franchisee contributions into that account; and

• Use the funds only for permitted purposes for example:

  • Marketing and advertising costs;

  • Activities disclosed in the disclosure document;

  • Expenditure agreed upon by franchisees; and

  • Reasonable administration costs associated with managing the fund.

Your Key Disclosure Obligations

If you manage a marketing fund, you must provide clear, detailed disclosure about:

• How the fund is controlled and administered;

• How franchisees’ contributions are calculated; and

• How the funds have been used throughout the financial year.

You’re also required to:

• Prepare an annual financial statement for the fund;

• Have it audited (unless 75% of franchisees vote not to); and

• Distribute a copy to all franchisees within 30 days of preparation.

These requirements are designed to ensure transparency and accountability, giving franchisees confidence that their contributions are being used fairly and effectively.

Why Compliance Matters

Failing to comply with the marketing fund provisions of the Franchising Code can lead to substantial financial penalties and reputational damage.

Recent cases, such as Ultra Tune and Domino’s, highlight how seriously regulators like the ACCC take non-compliance. Both companies faced significant fines for failing to properly disclose or report on their marketing fund activities.

In short, transparency isn’t just a best practice, it’s a legal requirement.

Tips for Franchisors

To stay compliant and build trust with your network:

• Update your disclosure document annually before 31 October.

• Prepare and distribute your marketing fund statement within 30 days of completion.

• Keep records of all fund-related transactions and approvals.

• Communicate clearly with franchisees about how funds are used.

Taking these steps will not only help you meet your obligations but also strengthen franchisee confidence in your brand’s management and integrity.

Final Thoughts

The marketing fund is one of the most scrutinised areas in franchising compliance. Maintaining clear disclosure and financial transparency protects your business and your franchisees.

If you’re unsure about your disclosure obligations or need guidance on how to prepare compliant documents, Franchising Made Easy™ can connect you with trusted legal professionals who specialise in franchise compliance and disclosure.