---
title: "Check that significant capital expenditure was disclosed and discussed before entry"
url: "https://ailawframework.com/practice/franchising-and-distribution/check-that-significant-capital-expenditure-was-disclosed-and-discussed-b"
type: "task"
site: "AI Law Framework"
id: "A34-OB20261022-8"
practice_area: "Franchising & Distribution"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Check that significant capital expenditure was disclosed and discussed before entry

> From the disclosure document and any file note of the pre-entry discussion, list each item of expenditure the agreement or the disclosure requires during the term, and whether the document states why it is needed, the…

Canonical page: https://ailawframework.com/practice/franchising-and-distribution/check-that-significant-capital-expenditure-was-disclosed-and-discussed-b  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Franchising & Distribution](https://ailawframework.com/practice/franchising-and-distribution.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | From the disclosure document and any file note of the pre-entry discussion, list each item of expenditure the agreement or the disclosure requires during the term, and whether the document states why it is needed, the amount, timing and nature, the anticipated outcomes and benefits, and the expected risks. If the amount is not known, record whether the document says the expenditure is uncertain, what would trigger it, and any range. Do not decide that the expenditure is significant. |
| What the lawyer must review | The lawyer decides whether the expenditure is significant for this franchisee and whether it was discussed, including how it is likely to be recouped, before entry. The lawyer does not treat this as an assessment of a demand made after entry. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Lawyer review required**

The responsible lawyer tests significance for this franchisee and whether the pre-entry discussion occurred.

- What the AI does: From the disclosure document and any file note of the pre-entry discussion, list each item of expenditure the agreement or the disclosure requires during the term, and whether the document states why it is needed, the amount, timing and nature, the anticipated outcomes and benefits, and the expected risks. If the amount is not known, record whether the document says the expenditure is uncertain, what would trigger it, and any range. Do not decide that the expenditure is significant.
- What the lawyer does: The lawyer decides whether the expenditure is significant for this franchisee and whether it was discussed, including how it is likely to be recouped, before entry. The lawyer does not treat this as an assessment of a demand made after entry.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. Do not apply a dollar threshold. The page says the Code states none.
2. An uncertain amount still needs a trigger and a range if that is all that is known.
3. Do not use this table for a demand made after entry. That is a separate catalogue task.
4. Confirm the agreement date against 1 November 2025 before treating the new obligation as applying.

## Notes

- These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.

## Sources

- [ACCC, disclosing significant capital expenditure](https://www.accc.gov.au/business/industry-codes/franchising-code-of-conduct/disclosing-significant-capital-expenditure-for-franchising) (checked 2026-10-22)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/franchising-and-distribution/check-that-significant-capital-expenditure-was-disclosed-and-discussed-b/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*