Is a franchise restrictive when it comes to sourcing stock and developing services?

• Generally a franchisor is able to provide guidelines on the types of products and services to be provided by their franchisees.
• However requiring that franchisees only purchase goods or services from a set provider can be a type of 'exclusive dealing' that is prohibited by the Competition and Consumer Act 2010.
• A franchisor would be advised to notify the Australian Competition and Consumer Commission (ACCC) if they intend to stipulate a set list of suppliers.
• This is different to requiring the franchisee to buy goods from the franchisor itself or a related company particularly in the context of a retail franchise.
• The area of law concerning anti-competitive trade practices and supplier arrangements is complex and it is advisable to obtain legal advice on your particular scenario. Our free Find a Lawyer directory may help put you in touch with the assistance you need.