Following the Franchise Code of Conduct

For any real estate business considering joining CENTURY 21, or any other real estate franchise, it is essential to have a clear understanding of the legalities involved in the process.  Knowing that all the proper legal requirements have been followed will help you to easily get on with what you do best – selling real estate!  

When establishing a franchise relationship, it is important that both the franchisor and franchisee comply with the Franchising Code of Conduct (the code), so as to maximise the benefits for all parties involved.   

The Franchising Code of Conduct is a mandatory industry code of conduct that enforces the law under the Trade Practices Act 1974. This code aims to regulate the conduct between both participants to ensure they are sufficiently informed prior to entering a franchise agreement.

Before you can benefit from owning your own CENTURY 21 franchise, according to the code both the franchisor and the franchisee will need to comply with the following four elements:

1. There must be written, oral or implied agreement between the franchisor and the franchisee

2. The franchisor must grant the franchisee the right to carry on the business’s existing marketing plan

3. The franchisor must grant the franchisee material association with the CENTURY 21 trademark, advertising or commercial symbol

4. The franchisee must pay the franchisor an agreed amount in return for the aforementioned rights and usages.

Since 2008, the Australian Government has implemented changes to the code increasing the transparency, timelines and quality of disclosure for existing and potential franchisees. Under the revised code within 14 days of entering into the franchise agreement or non-refundable payment, the franchisor must provide the prospective franchisee with:
- A disclosure document
- A copy of the Franchising Code of Conduct, and
- A copy of the franchise agreement in the form it is to be executed.

Once you sign the franchise agreement you will be legally bound to its terms and conditions. It is therefore recommended that you seek legal, accounting and professional business planning advice before committing to the purchase of your exciting new venture. If you do decide to terminate the franchise agreement, you are entitled to so within a seven day cooling off period.

There are some distinct advantages to owning a franchise.  This type of business structure will give you a greater sense of security, open larger business networks, and grant you exclusive access to CENTURY 21’s planning, management, marketing and product skills, and external assistance.  And very importantly, your company will instantly be associated with the success of a reputable brand.

CENTURY 21 proudly upholds its responsibility to educate its franchisees to act appropriately within the guidelines outlined in the code.  For further details or inquires please contact our Franchise Development team on (02) 8295 0600. 

 

 

Posted by George Tarbey on 01/06/2010 at 10:40 AM | Categories:

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