AUSTRALIA Trends and Developments Contributed by: Scott Colvin, Warren Scott and Lachlan Speirs, Archer Scott Lawyers
fication capability and budget into the deal model is now part of disciplined planning. The publication of decisions and reasons on the public register will, over time, give the market a clearer sense of how the regulator approaches particular sectors, but in the first year the prudent course is to treat clearance as a pro - ject to be managed from day one. Foreign investment: open, but security-conscious For inbound investors, foreign investment review sits alongside merger control as the second approval gateway, and the two must be planned together. Aus - tralia continues to welcome foreign capital, and the Treasury’s stated direction is a framework that is faster for low-risk, passive investment and more demand - ing where national security is engaged. A stream - lined pathway for clearly low-risk proposals is being developed, while sensitive areas attract closer scru - tiny, including critical infrastructure, critical minerals, defence-related capability, and data and technology. The practical consequences for deal makers are about sequencing and conditionality. A foreign investment approval is not a substitute for an ACCC approval or waiver, so the two workstreams run in parallel, and the transaction timetable must accommodate both. Acquirers in sensitive sectors should expect condi - tions and should engage early, while those in non- sensitive sectors can increasingly expect a more pre - dictable and faster path. Identifying which category a deal falls into, at the outset, is now a core part of deal planning. The Franchising Code, reset Australia has one of the most developed franchising sectors in the world, spanning food and beverage, retail, health and fitness, and a wide range of service businesses, and it is a common route for international brands to enter the market. That prominence is pre - cisely why the sector attracts close regulatory atten - tion, and why the remade Franchising Code, which took effect in 2025 following an independent review, is significant to inbound investors as much as domestic operators. For franchisors, whether established domestic net - works or international brands expanding into or within Australia, the reset is best understood not as a techni -
cal compliance update but as a shift in the balance of the franchisor and franchisee relationship, and in the consequences of getting it wrong. The most com - mercially significant features are the expanded penalty exposure and the strengthened protections for fran - chisees. A wider range of obligations now carries civil penalties, and the regulator and the small business ombudsman have sharper tools, including the ability to publicise franchisors who decline to participate in dispute resolution. For brand owners, the reputational dimension of that power can be as material as the financial one, particularly for consumer-facing brands. Enhanced protections around a franchisee’s reason - able opportunity to make a return on investment, and around compensation for early termination and exit, change network economics. Franchisors are revisit - ing their unit economics, disclosure practices and termination pathways, because arrangements that once shifted most of the risk onto franchisees are now more closely scrutinised. The Code also sharpens transparency around marketing and other co-oper - ative funds, requiring franchisors to administer and account for them more rigorously, and it reinforces the pre-contract disclosure process on which prospec - tive franchisees rely. The practical message is that a franchise system must be able to demonstrate, not merely assert, that its model is fair and sustainable. The minimum requirements in Australia require a franchisor to provide a comprehensive disclosure document and independent advice certificates in a proscribed format prior to a franchisee making an investment decision to purchase a franchise or mas - ter franchise. For transactions, this reshapes diligence on both the buy side and the sell side. • Buying a franchise network: diligence now extends well beyond the disclosure document to the network’s penalty exposure, dispute history and termination practices, and the robustness of its unit economics, because these drive both value and post-completion risk. • Selling or restructuring a network: vendors should expect closer examination of compliance posture,
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