Franchise Act 1998 · Updated to 1 Nov 2023 · Part III
20. Prohibition against discrimination
Feedback & supportIt shall be an unfair franchise and an offence under this Act for any franchisor to unreasonably and materially discriminate between franchisees operating a franchise in the charges offered or made for franchise fees, royalties, goods, services, equipment, rentals or advertising services if such discrimination will cause competitive harm to a franchisee who competes with a franchisee who receives the benefit of the discrimination, unless and to the extent that any classification of or discrimination between franchisees is—
franchise
“franchise” means a contract or an agreement, either expressed or implied, whether oral or written, between two or more persons by which— Franchise 9 (a) the franchisor grants to the franchisee the right to operate a business according to the franchise system as determined by the franchisor during a term to be determined by the franchisor; (b) the franchisor grants to the franchisee the right to use a mark, or a trade secret, or any confidential information or intellectual property, owned by the franchisor or relating to the franchisor, and includes a situation where the franchisor, who is the registered user of, or is licensed by another person to use, any intellectual property, grants such right that he possesses to permit the franchisee to use the intellectual property; (c) the franchisor possesses the right to administer continuous control during the franchise term over the franchisee’s business operations in accordance with the franchise system; and (d). (e) in return for the grant of rights, the franchisee may be required to pay a fee or other form of consideration. (f).
based on franchises granted at different times, and such discrimination is reasonably related to the differences in time;
related to one or more programmes for making franchises available to persons with insufficient capital, training, business experience or education, or lacking other qualifications;
related to efforts by the Government or any of its agencies to promote variation in products or service lines or business formats or designs;
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related to efforts by one or more franchisees to cure deficiencies in the operation of franchised businesses or defaults in franchise agreements; or
based on other reasonable distinctions considering the purposes of this Act and is not arbitrary.