Checklist · Franchising & Distribution
Does this distribution agreement meet the franchise agreement test
Test of a distribution, dealer or agency agreement against the meaning of franchise agreement in section 7, and against the exclusions in section 10, of the Franchising Code regulations.
- Kind
- Checklist. Steps or checks to work through and tick off.
- Where it applies
- Commonwealth
- AI use
- Yellow You and the tool draft together, with you directing. You check every statement you rely on.
- Law stated as at
- 22 October 2026
- Status
- Maintained. Checked on 22 October 2026 against the 2 authorities it cites, for Commonwealth.
- Version
- 1
- Source
- Written for this library
When to use it
Use when reviewing a distribution, dealer or agency agreement to see whether the Franchising Code can apply, before the agreement is treated as outside the Code.
Used for these tasks
Each task page says how far AI may help with the task and what the lawyer must review.
How AI may be used
The tool places the agreement beside each element of sections 7 and 10, and the lawyer decides whether the agreement is a franchise agreement and whether an exclusion applies.
AI may
- Record the grant, the trade mark or commercial symbol, and each payment the lawyer identifies.
- Mark payments the lawyer says are genuine wholesale, a loan repayment, consignment on a genuine wholesale basis, or market value for real property, fixtures, equipment or supplies.
- Set out the section 10 exclusions that were read, without applying a percentage the lawyer has not calculated.
AI must not
- Do not conclude that the Code applies or does not apply.
- Do not treat an employment, partnership, landlord, mortgage or loan relationship as a franchise agreement merely because it exists.
- Do not draft the distribution agreement.
The lawyer checks
- All four paragraphs of section 7(1) are required. Section 7(2) deems certain transfers, renewals, extensions and a motor vehicle dealership agreement to be a franchise agreement.
- Section 10(3) uses a two-year history and a 20 per cent turnover test for the first year. The lawyer calculates the percentage. This sheet does not.
- Section 10(1) refers to section 51AE of the Act and to other prescribed codes. Those were not opened, other than the two codes named in section 10(2).
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
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- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in Franchising & Distribution
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- Pre-entry statements: receipt of the disclosure document and Code, and independent legal, business and accounting advice (Franchising Code ss 26 and 27)
- Franchisor end-of-term notice: extend, new agreement, or neither (Franchising Code s 36)
- Information statement for prospective franchisees (ACCC): when and how to give it
- Post-term restraint map under the Franchising Code
- Significant capital expenditure in a franchise disclosure document
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- Prospective franchisee due diligence checklist and letter of advice
- Marketing and other specific purpose fund: annual statement, audit and franchisee vote (Franchising Code ss 31 and 61)
- Franchisor notice of breach and opportunity to remedy (s 55 Franchising Code)
- Materially relevant facts to be told to franchisees
- Responsible franchisor exposure note for a franchisee contravention
- Request for franchisor consent to transfer, and the franchisor’s response within 42 days (Franchising Code ss 24, 48 and 49)
- Compensation for early termination of a franchise
- Notice of dispute under the Franchising Code, with ADR referral and Ombudsman request
- Unfair contract terms review of a standard-form agreement
- Franchise agreement clause: franchisor-mandated AI tools, customer data and AI-generated marketing
- Prompt template with guardrails: compare the disclosure document with the franchise agreement
All precedents for Franchising & Distribution · Tasks and AI use in this area