Checklist · Franchising & Distribution
Marketing and other specific purpose fund: annual statement, audit and franchisee vote (Franchising Code ss 31 and 61)
Year-end pack for a marketing, technology or other specific purpose fund: the statement format the Code requires, the 4-month and 30-day deadlines, the audit or the 75% franchisee opt-out vote, the separate account and spending limits, and a covering letter to franchisees.
- Kind
- Checklist. Steps or checks to work through and tick off.
- Where it applies
- Australia
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 18 October 2026
- Status
- Maintained. Checked on 18 October 2026 against the 4 authorities it cites, for Australia.
- Version
- 1
- Source
- Written for this library
When to use it
Use at each financial year end by a franchisor or fund administrator, and by a franchisee lawyer testing a fund statement or the use of fund money. It covers any fund franchisees must pay into for a common purpose, not only marketing funds.
How AI may be used
AI may map the fund ledger to the statement headings and compute the percentages; the fund administrator’s accountant prepares the statement, a registered company auditor audits it, and the lawyer checks the uses of fund money against s 61 and the disclosure document.
AI may
- Classify ledger entries into income sources and expense items under the headings in Part B, and flag entries with no clear purpose
- Calculate the percentage of total income spent on fund expenses and on administration and audit costs
- Compare the expense categories against the kinds disclosed in the disclosure document and list any not disclosed
AI must not
- Must not prepare or sign the financial statement or the audit report; those are for the fund administrator’s accountant and a registered company auditor
- Must not decide whether an expense is a legitimate expense for the fund’s specified purpose
- Must not record a franchisee vote as passed without the vote records showing 75% of contributing franchisees in Australia agreed within 3 months
The lawyer checks
- The statement details all receipts and expenses with enough detail to show sources of income and items of expenditure, and gives the two percentages s 31(3)(b) requires
- The statement was prepared, and audited (unless a valid 75% vote dispensed with the audit), within 4 months after year end
- Copies of the statement and the auditor’s report go to every franchisee within 30 days of preparing or receiving them
- Every use of fund money falls within s 61(4), the separate account is in place and corporate units contributed on the same basis
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- 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
- Franchise disclosure document: Schedule 1 build sheet and verification register
- 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
- Prospective franchisee due diligence checklist and letter of advice
- Franchisor notice of breach and opportunity to remedy (s 55 Franchising Code)
- Request for franchisor consent to transfer, and the franchisor’s response within 42 days (Franchising Code ss 24, 48 and 49)
- Notice of dispute under the Franchising Code, with ADR referral and Ombudsman request
- 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