You Can’t “Estimate” Experience in a Franchise Disclosure Document.
Case Review: Husseini v Girchow Enterprises Pty Ltd. [2024] FCAFC 143
Most franchisors approach disclosure as a formality.
Follow the Code.
Include the required sections.
Add disclaimers.
Job done.
This case is a reminder that compliance on paper isn’t enough.
The Problem
The franchisor provided estimated setup costs in its disclosure document, suggesting they reflected what franchisees typically spend.
But there was a problem.
There were no franchisees.
No track record.
No actual data.
The figures weren’t based on experience — they were assumptions presented as if they were grounded in reality.
The Outcome
The Court focused on that gap.
Not what the document said structurally… but what it conveyed in substance.
And that’s where it unravelled.
The Court found the representations to be misleading.
The franchisee was entitled to relief — including having the Franchise Agreement set aside.
The Lesson for Franchisors
If your disclosure creates the impression of real-world knowledge, you need to be able to back it up.
Disclaimers won’t fix it.
Templates won’t save it.
If it reads like experience, it needs to be experience.
Judgment:
https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2024/143.html
If you’re reviewing your franchise documents or unsure whether your disclosure stacks up — it’s worth getting clarity early.
We can walk you through it.