Can the Franchisor insist that the Franchisee sign and return Franchise documents within a limited time frame to avoid Franchisees sitting on documents and shopping around for a more attractive option?

Under the Code of Conduct franchisors are required to provide prospective franchisees with a copy of the code, a disclosure document and a copy of the franchise agreement at least 14 days before the prospective franchisee enters into the franchise agreement or makes a non-refundable payment to the franchisor or its associates in connection with the proposed franchise agreement.

The 14 day disclosure period is a minimum requirement. The franchisee may take much longer than 14 days to obtain independent advice and make a decision whether or not they wish to proceed.

In providing the prospective franchisee with a franchise agreement, the franchisor is making the franchisee an offer. The franchisor can therefore make the offer conditional upon the franchisee accepting the offer within a specific timeframe (not less than 14 days) if the franchisor wants to put a timeline on the franchisee to commit. There is a risk that some franchisees may react negatively to such a deadline and therefore decide not to proceed. The franchisor needs to consider whether this risk outweighs the potential benefit of having franchisees commit to the franchise within a much shorter timeframe than may otherwise be the case.