Franchise management software in Australia: the Franchising Code, funds and royalties

What does a franchise network system have to hold?

A franchise system holds four things: the legal record with each franchisee, the money that flows between you, the operating standards, and the evidence that everyone followed them. Most franchisors start with an intranet and a shared drive, add an audit app, and run royalties and fund accounting in spreadsheets. That works for ten units. By forty, the spreadsheets are the riskiest part of the business, because they are what an ACCC inquiry or a franchisee dispute will ask for.

The Franchising Code is a mandatory industry code under the Competition and Consumer Act 2010, and it applies to everyone involved in franchising in Australia, except agreements covered by another mandatory code such as the Oil Code. The current code took effect on 1 April 2025, with a transition to 1 November 2025 for some obligations.

Which Franchising Code deadlines should software run?

The code creates a recurring calendar of deadlines, and a missed one is a compliance failure with civil penalties attached. The ACCC’s guidance sets out these timings:

Obligation	Deadline
Give a prospective franchisee the disclosure document	At least 14 days before the franchise agreement is signed
Annual update of the disclosure document (agreements on or after 1 April 2025)	Within 4 months of the first day of the franchisor’s financial year, so 31 October for a July year
Updated disclosure document on a franchisee’s written request	Within 2 months; franchisees can ask once every 12 months
Join the Franchise Disclosure Register (new franchisors)	At least 14 days before entering any franchise agreement
Confirm the register profile	Every year
Specific purpose fund financial statement, and audit if required	Within 4 months of the end of the financial year
Give the fund statement to contributing franchisees	Within 30 days of it being prepared

A system that runs this calendar should know each agreement’s start, renewal and transfer dates, because the ACCC notes that agreements transferred, renewed or extended on or after 1 April 2025 must comply with the new code. It should keep every version of the disclosure document, record which version each prospective franchisee received and when, and hold the solvency statement that has to be updated with it.

The code also bans restraint of trade clauses that apply if the agreement expires and the franchisee seeks to extend or renew it. That is a contract drafting question rather than software, but a contract register should flag older templates.

Why does the marketing fund need its own system now?

Because the new code treats every common purpose fund as a specific purpose fund, with its own account, statement, audit and vote. The ACCC lists marketing, technology, refurbishment, training, environmental or sustainability, and group project funds. From 1 November 2025, the fund administrator must:

• keep contributions in a dedicated or separate account
• spend them only on the fund’s stated purpose
• contribute for every corporate unit on the same basis as franchisees
• prepare an annual financial statement and have it independently audited, unless 75% of contributing franchisees in Australia vote against an audit, with that vote held within 3 months of year end
• give franchisees the statement within 30 days of preparing it, and the audit report within 30 days of receiving it

A fund ledger that tags every contribution and every spend to a fund, produces the statement from those tags, and runs the annual audit vote is a small, well defined build. The ACCC lists a pro rata software subscription to manage the fund as an expense likely to be reasonable, alongside external audit fees, while inflated internal overheads or executive salaries are likely to be unreasonable.

How do you calculate royalties from mixed POS and Xero data?

By pulling sales from each franchisee’s systems on a schedule, normalising them to one definition of gross sales, and calculating royalties and fund levies from that. Networks rarely run one POS. Older units stay on a legacy system, newer ones on Square or Lightspeed, and every franchisee has their own Xero or MYOB file.

A royalty hub typically:

1. Connects to each POS and accounting file through its API, with the franchisee’s consent.
2. Maps each system’s sales categories to the franchise agreement’s definition of gross sales.
3. Calculates royalty, marketing and other levies per unit per period.
4. Raises invoices in the franchisor’s accounting system and tracks payment.
5. Shows each franchisee their own figures and the calculation behind them.

The fifth step heads off most royalty disputes. Our Xero and MYOB integration service covers the accounting connections. FranConnect lists royalty processing among its features, so check what it supports for your POS mix first.

What counts as reasonable steps on franchisee wages?

Enabling, supporting and monitoring compliance, in proportion to your influence over the network. The Fair Work Ombudsman says franchisors can be held responsible when their brand or trade mark is a major part of the franchisee’s business and they have a significant degree of influence or control, the franchisee breaches workplace laws, the franchisor knew or could reasonably have known, and it did not take reasonable steps to prevent it. The source provisions are sections 558A and 558B of the Fair Work Act 2009.

In software terms, reasonable steps might mean:

• onboarding modules on the relevant award, completed and recorded per manager
• a requirement, set in the agreement, to use a payroll system that applies the award
• periodic checks comparing rostered hours, timesheets and pay records for each unit
• a confidential channel for staff to raise pay concerns
• a record of what head office did when a flag came up

Agree the data access in the franchise agreement, collect only what you need, and remember that franchisee staff records are personal information.

Field audits and brand standards

Audits need to be repeatable, photographed and tied to follow up actions. SafetyCulture and Operandio both handle checklists well. Custom work earns its place when audit scores need to sit beside royalty data, complaints and staff turnover in one franchisee scorecard, or when an audit failure should open a support task automatically.

Can AI answer franchisee questions from the operations manual?

Yes, and it is one of the better uses of AI in franchising, provided answers cite the manual and stay inside it. A retrieval based assistant, often called RAG, searches your manuals, recipes, brand guidelines and policies and answers with links to the source section. It saves the support team from answering the same question across fifty units. Keep the manual current, because the assistant is only as good as the documents behind it. Our RAG knowledge base service explains the build, and our RAG explainer covers how it works.

Build, buy or extend?

Situation	Sensible choice
Under 20 units, one POS	Platform for intranet and audits; spreadsheet royalties with good controls
20 to 100 units, mixed POS	Platform plus a custom royalty and fund hub
100 units or more, or unusual operations	Custom portal joining royalties, funds, audits and compliance, or a platform heavily extended through its API

Indicative AUD market ranges, ex GST, for planning, not quotes: a royalty and reporting hub across franchisee POS sits around $40,000 to $110,000; a franchise portal with fund ledger, compliance calendar and audits around $60,000 to $160,000; an operations manual assistant around $25,000 to $70,000. These fall within the bands Expeed publishes for Australian mid complexity systems ($40,000 to $150,000) and the low end of enterprise work.

How AWLabs approaches franchise projects

We start with a Development Consult to understand your network, systems and pain points. A paid Discovery Audit then maps your agreements, POS mix and accounting files, and tests what their APIs allow. You get a fixed price Schedule of Work with three options: The Minimum, The Recommended and The Complete. Senior engineers lead every build, with updates every Tuesday and Friday during Sydney business hours.

We haven’t built for a franchise network before, and we’ll say so. Our custom app development service describes how we build. For the retail side, see our retail chain software page. This page is general information, not legal advice; your franchise lawyer decides what your documents must say.