- Under the Franchising Code, the franchisor must give you an end-of-term notice at least 6 months before your agreement ends. For terms under 6 months, it’s 1 month.
- If the franchisor intends to extend, the notice must tell you that you can ask for a current disclosure document.
- A franchisor doesn’t have to renew unless your agreement gives you a right to renew.
- If you keep trading after expiry on a holding-over or month-to-month basis, the Code still applies.
- Renewal is a fresh investment decision. Check the new terms, the refurbishment requirement, the lease and the numbers before you commit.
A franchise agreement typically runs five to ten years. The months before it ends are when you have the most leverage and the most to lose. Here’s what the Code requires, and what to check commercially before you sign up for another term.
What the Code requires
The ACCC explains that a franchisor must give the franchisee written notice of whether it intends to extend the agreement, or enter into a new one, at least 6 months before the end of the term. If the term is less than 6 months, the notice period is 1 month before the end.
If the franchisor intends to extend, the notice must tell you that you’re entitled to request a disclosure document. If it doesn’t intend to extend, the notice should explain the reasons where the agreement or the Code requires it. You still have the usual Code protections throughout.
No automatic right. The Code doesn’t oblige a franchisor to renew. Whether you can renew, and on what terms, depends on the option clause in your agreement. Read it well before the notice date.
Holding over and month-to-month
Some franchisees keep trading after the term ends without signing a new agreement. The ACCC notes that the Code still applies to these holding-over or periodic arrangements. Holding over can be useful while terms are negotiated, but it leaves you exposed if the franchisor or landlord decides to end the arrangement.
Commercial checks before you renew
- The new agreement. Is it the current standard form? Compare royalty, marketing levy, technology fees and territory with your existing terms.
- Renewal fee. How much is it, and what does it cover? See how franchise fees are taxed.
- Refurbishment. Many franchisors require a refit on renewal. Get a written scope and quote before agreeing.
- The lease. Does the lease term line up with the new franchise term? Is the landlord willing to renew, and at what rent?
- Your numbers. Review three years of profit and loss, current labour costs and the cash needed for the refit. Will the next term pay back the reinvestment?
- Exit value. A fresh term usually makes a store easier to sell. Consider whether renewing and then selling beats selling now.
- Disclosure. Request the current disclosure document and read the franchisor’s financial position and litigation history.
Renewal timeline
| When | What to do |
|---|---|
| 12 to 18 months before expiry | Read your option clause. Check lease expiry. Start reviewing financials. |
| 6 months before expiry | Franchisor’s end-of-term notice due. Request disclosure if extending. |
| 3 to 6 months before | Negotiate terms, refit scope and lease. Get legal and accounting advice. |
| Before expiry | Sign the new agreement and lease, or plan an exit or sale. |
Frequently asked questions
Does a franchisor have to renew my franchise agreement?
No, unless your agreement gives you a right to renew. The Code requires the franchisor to tell you its intention at least 6 months before the term ends.
How much notice does a franchisor have to give before the agreement ends?
At least 6 months before the end of the term, or 1 month if the term is less than 6 months.
Does the Franchising Code apply if I’m holding over?
Yes. The ACCC says the Code still applies when you keep operating after the term ends on a holding-over or periodic basis.
Should I renew or sell my franchise?
Compare the cash needed to renew (fees, refit, lease costs) with the profit you expect over the new term and the sale value now. Our guide to selling a franchise can help.
Coming up to renewal? We can model the reinvestment and compare renewing with selling. Book a 15-minute call or see our business advisory service.
This article is general information only and does not take into account your personal circumstances. It is not legal, tax or financial advice. Get advice from a franchise lawyer and accountant 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.
