- Franchisors that hold a marketing or other cooperative fund must prepare an annual financial statement for it within 4 months of the end of the financial year.
- The statement must be audited within 4 months of year end, unless 75% of contributing franchisees vote not to audit. That vote must happen within 3 months of year end.
- The statement has to show meaningful detail on where the money went, not a one-line total. The ACCC has issued penalties for statements that fell short.
- Since 1 November 2025, prospective franchisees must receive a copy of the most recent marketing fund statement with the disclosure documents.
- The Code now calls these “specific purpose funds”. The same discipline applies to any fund franchisees pay into for a shared purpose.
For many franchise systems the marketing fund is the biggest pool of franchisee money the franchisor controls. It is also one of the most common sources of franchisee complaints. The Franchising Code of Conduct sets out clear rules for how the fund is reported. If you run a franchise system, getting these rules right protects you from penalties. It also protects your relationship with the network.
What counts as a marketing fund
Under the Code, a marketing or other cooperative fund is any fund that franchisees contribute to and the franchisor controls or administers, for a shared purpose such as advertising, promotion, technology or training. The ACCC now uses the term “specific purpose funds”. If franchisees pay into it and you decide how it’s spent, assume the rules apply.
The annual financial statement
- Prepare a financial statement for each fund within 4 months of the end of the financial year.
- Give franchisees access to it within 30 days of preparing it.
- Show meaningful detail of receipts and expenses, such as media buying, creative, agency fees, digital spend, sponsorship and administration. Don’t lump them together.
- Include a note on the franchisor’s own contributions, including those of company-owned outlets, where the agreement requires them.
- Keep the fund’s money separately identifiable from the franchisor’s own operating funds.
Enforcement is real. In 2023 the ACCC issued a franchisor an $11,100 infringement notice for allegedly failing to give enough detail in its marketing fund statement. The ACCC also checks statements during its Code compliance checks.
The audit
The statement must be audited by a registered company auditor within 4 months of the end of the financial year. You can skip the audit only if 75% of the franchisees who contributed to the fund vote not to audit it, and the vote takes place within 3 months of year end. The vote covers one year only. The reasonable cost of the audit can be paid from the fund.
Disclosure to new franchisees
Since the updated Code began on 1 November 2025, a prospective franchisee must receive the most recent financial statement for each specific purpose fund. A clean, well-itemised statement can help you sell franchises. A vague one tends to put off buyers who are paying attention.
Practical setup for franchisors
- Run the fund through a separate bank account or a separate ledger with its own chart of accounts.
- Code every expense to a meaningful category when you enter it, not at year end.
- Set a calendar: vote window closes 30 September, statement and audit by 31 October (for a June year end).
- Reconcile contributions received against contributions due from each franchisee every month.
- Agree a written allocation method for any shared staff or overhead charged to the fund.
- Report fund spending to franchisees during the year, not just in the annual statement.
Key dates for a 30 June year end
| Step | Deadline |
|---|---|
| Franchisee vote not to audit (if any) | 30 September |
| Annual fund financial statement prepared | 31 October |
| Audit completed (unless voted out) | 31 October |
| Statement and audit report available to franchisees | Within 30 days of preparation |
Dates assume a 30 June financial year. Check the current Code and your agreement for your own obligations.
Frequently asked questions
Does a franchise marketing fund need to be audited?
Yes, within 4 months of the end of the financial year, unless 75% of contributing franchisees vote within 3 months of year end not to audit it.
Can the franchisor use the marketing fund to pay for the audit?
Yes. The Code allows the reasonable costs of the audit to be paid from the fund.
What detail must a marketing fund statement include?
Enough meaningful detail for franchisees to understand where their money went, broken down into categories of receipts and expenses. A single total for “marketing” isn’t enough.
What is a specific purpose fund?
It’s the ACCC’s term for a marketing or cooperative fund that franchisees pay into and the franchisor controls for a shared purpose, such as advertising, technology or training.
We help franchisors set up fund accounting, prepare the annual statement and get audit-ready. See our franchisor services or book a 15-minute call.
This article is general information only and does not take into account your personal circumstances. It is not legal, tax or financial advice. Check the current Franchising Code of Conduct and get advice before acting.
Sources
Sources checked November 2026. Rules change. Confirm current guidance before acting.
Talk it through
Every franchise is different. Ask us how this applies to yours.
